The Mouthpiece


By Martin Owens
Contributing Editor


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    Martin Owens

    Welcome to my parlor.... The arbitrary treatment of Internet sweepstakes cafe's

    Government is either organized benevolence or organized madness;
    John Updike


    Philadelphia, PA (Sports Network) - A catalyst, as our chemistry teachers taught us long ago, is something that takes a normal reaction and accelerates it, sometimes to an insane degree. And the involvement of the Internet, it seems, acts as a powerful catalyst on state and local law enforcement when they deal with games and contests. Just say the words "Internet gambling" and all of a sudden, anything goes.

    An arrest (or at least a roust) in Cleveland and new legislation in North Carolina highlight the latest problem with Internet gambling: it refuses to stay safely on the Internet. There is a new player in town, albeit a very small one. The beast is called the "Internet sweepstakes Cafe". Just like certain kinds of forest plants grow best after the woods have burned down, Internet sweepstakes cafes flourish in Northeast Ohio neighborhoods, Cleveland suburbs like Brook Park, Parma and Elyria, where steel mills, machine shops and auto factories once stood.

    Opening in vacant store and restaurant space - lots of that around, lately- an Internet sweepstakes cafe offers computer and web time. Customers purchase this with prepaid phone cards, available at the desk. There are also office services available. But the big draw is of course, the Internet sweepstakes. When you bring them up on the computer monitor, they look just like video poker, keno or slots. But- and this is very important- they do not fit under the definition of gambling. Why?

    Well, says a judge in Toledo, Ohio when they asked him, gambling is all about chance.

    And because the results of theses sweepstakes are pre-determined before letting the people play, well, think of it as an online version of the scratchers card.

    Except the player pays nothing for the scratch. Meaning that there is no consideration paid for the chance to play. Without that, you can't call it gambling. Purchasers check for prizes and then go back online. If they want to play at the sweepstakes page, the only thing they can win is more time. Winning of the prize, you see, is carefully separated from payment any consideration.

    THE REACTION

    The interesting thing about all this, however, is that at least a significant segment of the powers that be is refusing to take "yes" for an answer. They insist that gaming must not be allowed if it doesn't follow the rules - then they refuse to admit that anything follows the rules.

    In Cleveland, police raided a sweepstakes cafe and grabbed all the computers. But there are no charges. First they seize the business, then they decide if any law is being broken. They will refer the matter to the grand jury to determine if - gasp!- misdemeanor gambling charges should be filed. A splendid and effective use of public funds; thank goodness it is no burden in these prosperous times.

    In North Carolina, gaming has turned into a cat-and-mouse match, being played for its own sake. It began with video poker, allowed over the strident objections of those who fancied themselves society's guardians. By 2007, it was clear that people were having too much fun altogether, and video poker was banned. So small entrepreneurs tunned to server based slot simulations. Banned in 2009. Next, as in Ohio, judges were consulted on the legality of Internet sweepstakes arrangements. Two judges backed it as legal- or at least refused to pronounce it illegal per se. Never mind, the anti-gambling posse outlawed it last Wednesday.

    A PATH LEADING WHERE?

    If such high-handed and arbitrary behavior were exhibited toward a particular group of individuals, it would unquestionably be called prejudice (and probably referred to the DA's Civil Rights Section). In both cases, the defendants went out of their way to inquire as to the state of the law, and deliberately altered their operations and business proceedings so as not to violate it. What was the response of the authorities? In Cleveland, they simply grabbed the business assets and said, in effect, "you're under arrest for something, we'll figure out what it is later" . In North Carolina, the legislative Chief Inquisitor absolutely complained of "playing whack-a-mole" with the gaming companies. According to his notion of things, it was wrong of gaming companies to even TRY to find a way to comply with the law. He, and the people like him, wanted gaming gone, and they absolutely believe that a gaming business, by seeking to exist at all under any circumstances, is transgressing their private moral code, which of course should be the code of the community at large. "And if the judges say it's legal, we say it ain't, and we'll keep going until we get what we want."

    Oh, the irony! Isn't that one of the main themes of the public controversy today, that the government has grown too powerful, and is now out of control, accountable to no one? So fiercely protested by these very politicians who regularly campaign against gambling? Well, my friends, where do you think that seed was planted? Maybe just maybe, in the doctrine that "there is no right to gamble" (judge-created, by the way) might be the mother of the doctrine that gamblers and gambling businesses have no rights, either.

    And after that, how easy to extend the taint of "immorality" to almost everything or anybody, under one pretext or another! And of course, sinners have no rights that anybody is bound to respect, Constitution or no Constitution. But our rights and liberties all spring from the same root. You cannot choke off someone else's freedom without endangering your own. Everybody has some opinion, some pastime or weakness that someone else will consider "wrong" or "immoral" or "anti-social".

    But it has now become all to easy for the powers-that-be to crush those who differ or dissent, to pick a scapegoat as a diversion from real and pressing problems.. The tools to do so were already plentiful- placed there, in large part by the anything-goes attitude that underlay the enforcement of gambling law. Weapons, once made, have a way of being used.

    The contest to identify more and more sinners, against whom anything goes, has spilled out and touched everyone's life. Foods ranging from Cheetos to foie gras have now become taboo and infidel poisons, never mind cigarettes. How many of us are working at the "wrong" jobs, pricing the "wrong" kind of cars. Holding the "wrong" beliefs? Think you can't be punished for them? The Inquisition is already warming up on "sinners" like the Internet sweepstakes cafe's.

    First they came for the gamblers...

    Mr. Owens is a California attorney specializing in the law of Internet and interactive gaming since 1998. Co-author of INTERNET GAMING LAW with Professor Nelson Rose,( Mary Ann Liebert Publishers , 2nd ed 2009) ; Associate Editor , Gaming Law Review & Economics; Contributing Editor, TSN. Com Comments and inquiries welcome at to mowens@trade-attorney.com.

    Copyright 2010


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