Casino Circumvention?

March 23, 2011
By

By Seth Daniel

seth@reverejournal.com

Inside the 'Lucy Day Sweepstakes Cafe', a clean, quiet layout is in contrast to the controversy that has arisen over what some police call an illegal gambling operation that exploits a loophole in the state law.

It’s the Internet Café that pays off in more than computer chips, or at least local police and state officials say.

A storefront café now called “Lucky Day Sweepstakes Café” in the new Bell Circle mall has turned quite a few heads lately – including those of Revere Police, the Boston television media and many in the general public. However, operator and lifelong Revere resident Bobby Kelley said it’s nothing to be that worked up about.

It was believed that for some time now illegal gambling has been going on in the establishment, but according to Capt. Michael Murphy of the Revere Police, the activity isn’t illegal, but is another loophole casino.

While they do give payouts in cash for accumulating credits while playing casino-style computer games, it is allowed. Such operations have been dubbed “loophole casinos.”

Such terms have been applied to café businesses and phone card machines, both of which use the sweepstakes exemption – an exemption similar to what McDonald’s or Burger King uses for their chance games – to operate what appears to be a mini casino. Due to that sweepstakes exemption in the law, cafes like Lucky Day and the abundance of phone card poker machines in the city, are legal and allowed to operate as long as they state that no purchase is necessary to play the game.

Besides Revere, there are other facilities throughout the state, including one in Lynnfield and others on the South Coast.

“It’s disturbing and frankly it’s infuriating and I’ll be waiting with baited breath to shut them down when it becomes apparent we’re legally able to do so,” said Murphy. “It’s wrong at every level and it’s also unregulated.”

Murphy said that the business operated as an Internet Café for quite some time and had little to no business. They are licensed only as a common victualler in order to serve coffee and snacks. Upon his first inspection last fall, Murphy said he was satisfied. However, in the last few months – after changing their name – Murphy said things there have changed.

Kelley provided a tour and explanation of his business this week to the Journal.

“It’s a legitimate business and people are going to take their shots at us,” he said. “That’s to be expected.”

He said that in no way is he operating an illegal casino. In fact, such businesses are growing rapidly even in a down economy.

“No, it is not illegal gambling, it’s a sweepstakes,” said Kelley. “The difference is you can come in any day at any time and play for free. That’s one of the biggest differences between us and a gambling operation…If they [play for free] and win $1, $100, or $50, we pay them like anyone else. They don’t have to do anything to play.”

To comply with the loophole, the café allows people to play for free, and those players are given one chance and 100 points to use in the sweepstakes games.

Kelley explained that the primary business, though, is selling Internet time on regular personal computers. The layout of the place is rather inviting, very clean and quiet. Computers line work tables and small lights provide a nice atmosphere at every terminal, while high-backed leather chairs provide a comfortable place to park oneself for a time.

The café sells 20 minutes of Internet time for $5, and in exchange the café gives customers 500 free points to use in 27 different sweepstakes games – all of which are played on the computer terminals.

In playing those Casino-style computer games, customers can win more points and – when they’re finished – exchange those points for cash payments from the café.

“Some choose to play and some don’t,” he said. “You don’t have to. Those that do choose to play the sweepstakes, the games are casino-like games [on the computer]…There’s no limit to what you can win. If someone wins  more than $599, they have to file a form. We give them a check and they have to pay taxes on it just like everyone else.”

Kelley added that a good deal of his business is people coming from the nearby Registry of Motor Vehicles – people who are looking to use the computers to do work or to make quick printouts. He said there are also a lot of people who want to use the computer to check their e-mail or search the Internet.

“The atmosphere here is very friendly and inviting and people have gotten to know each other,” he said. “It’s become an enjoyable afternoon for people whether they’re working on the computer or playing the sweepstakes. It’s become a great place to spend an afternoon.”

The police, though, don’t see it that way at all. They see it as a place that is preying upon a vulnerable population.

“I went down last week with [License Commission Chair Tom] Henneberry and it was quite busy and quite apparent what was going on,” said Murphy.

However, at the moment, it cannot legally be acted upon.

The Attorney General’s office told the Journal that the business may or may not be legal, and the State Lottery Commission also told the Journal they are looking into the matter with the AG’s Office.

“We are aware of this issue and are looking into it,” said Harry Pierre, a spokesperson for AG Martha Coakley. “These must be dealt with on a case-by-case basis, but people should be aware that if there is an exchange of money, it may be a violation of the law. If people have questions or concerns, they can contact our office’s consumer hotline.”

Two or three years ago when the video poker phone card machines began to pop up in every convenience store around Revere, the state seemed to take the same tack. They agreed to look into it and to figure out if it was illegal or not.

Meanwhile, police said that several decisions on those machines were not supportive of law enforcement’s desire to shut them down. Now, law enforcement feels that the cafés may continue just as the phone cards have continued.

“These businesses and businesses similar to it seem to be taking advantage of a lapse in the law,” said Murphy. “In the meantime, we’re hoping maybe the License Commission or the AG’s Office or the State Gaming Commission will come down and begin to close this window.”

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