Tag Archives: internet sweepstakes cafes

Judge denies preliminary injunction in Flint sweepstakes cafe

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A Genesee County judge sided with the Attorney General by denying an Internet sweepstakes cafe’s request to stay in operation without the threat of prosecution.
Attorney General Bill Schuette has sent cease and desist letters to a dozen Internet sweepstakes cafes, which he contends are illegal gambling operations.
The cafes sell Internet access or long-distance phone cards. With each purchase, a customer receives free sweepstakes entries to play casino-style computer games for cash prizes.
Flint Business Center filed a lawsuit against Schuette and requested a preliminary injunction to prevent the state from prosecuting the cafe or seizing its assets
Even though only one cafe was listed on the suit, the outcome can impact enforcement of other operations throughout the state.

Judge Judith Fullerton of Genesee’s 7th Circuit Court on Monday denied the cafe’s request.
“The investigators of the Michigan State Police Gaming Section are committed to the enforcement of the state’s gaming laws, working in conjunction with the Michigan Attorney General’s Office and the Michigan Gaming Control Board,” Michigan State Police Director Col. Kriste Kibbey Etue said in a statement. “Businesses operating outside of the law will be shut down.”

An attorney for the cafe was not available for comment Wednesday afternoon.
The business agreed to close after being warned of potential prosecution.
The cafe argued in its lawsuit that it doesn’t meet the criteria for a gambling operation and likened it to a McDonald’s Monopoly sweepstakes.

http://www.mlive.com/business/index.ssf/2012/06/judge_makes_initial_ruling_in.html

Schuette plans to file a motion to dismiss the lawsuit.

Michigan Attorney General Wants To Restrict Computer Access

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The state has issued cease-and-desist letters to nine Internet sweepstakes cafes, including five in Metro Detroit, alleged to be illegal gambling operations.

Internet sweepstakes cafes sell Internet access and the chance to play computer-based casino-style games in which consumers can win cash prizes. This gaming style violates the Michigan Gaming Control and Revenue Act, said Michigan Attorney General Bill Schuette.

Schuette’s letters warned the businesses of possible legal action should owners and operators refuse to halt gambling operations.

Among the nine cafes implicated Tuesday were Players Club Internet Cafe in Warren, Treasure Internet Lounge in Clinton Township, Treasure One Cyber Cage in Roseville, Players Club Pontiac and Super Cafe Internet Cafe in Taylor.

Others were in Lansing and Flint.

“Citizens should steer clear of Internet sweepstakes cafes that are nothing more than unregistered, illegal casinos,” Schuette said.

Investigations are pending against the owners and operators and may result in additional criminal or civil charges, the state said.

According to the state, Internet sweepstakes cafes have banks of computers with Internet access.

Each purchase entitles a patron to a certain number of sweepstakes entries.

“The customer is then given the opportunity to ‘reveal’ whether the sweepstakes entries are winners by using a computer monitor that activates a spinning wheel similar to that of a casino-style video slot machine,” the state said.

Jake Miklojcik of Lansing-based Michigan Consultants has previously said Michigan isn’t likely to legalize Internet sweepstakes cafes because the casinos and most of the evangelical community oppose them.

Before Tuesday’s action, the Alcohol and Gambling Enforcement in May issued eight cease-and-desist orders; none of the cafes was in Metro Detroit.

Previously, Players Club Internet Cafe in Westland voluntarily closed to avoid legal action by Schuette’s office.

http://www.detroitnews.com/article/20120613/BIZ/206130319/Gaming-sites-Internet-get-state-warning-letter?odyssey=mod%7Cnewswell%7Ctext%7CFRONTPAGE%7Cs

New Michigan Internet sweepstakes cafe opens in Flint

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Flint cafe opens after cease and desist ?

How ? 1-877-WIN-CAFE (946-2233)

http://www.mlive.com/business/mid-michigan/index.ssf/2012/05/burton_planning_commission_app.html

If new laws are needed, how are they illegal now ? Sounds familiar

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Michigan’s attorney general shuts down Internet cafes for illegal gambling.

Forget the rough economy, if you believe reports, Illegal Internet cafes are Michigan’s current scourge. That’s right, according to Michigan officials, many seemingly innocent WiFi-friendly “tech-eries” offer illegal services – and as of May 3, 2012, eight Internet cafes in Grand Rapids, Saginaw, Lansing and Flint were shut down indefinitely after receiving state-issued cease and desist orders.
You Ain’t No Stinking Internet Café, You’re An Illegal Gambling “Pop Up” Casino

According to authorities, the targeted establishments are not ordinary Internet cafes that only offered basic web surfing. Oh no, the naughty establishments allegedly lured customers with a chance to win cash or a free sweepstakes entry. Michigan’s Attorney General, Bill Schuette, says that the cafes are unregulated “pop-up” casinos. The state’s main issue and legal stance is that these businesses are offering customers a chance to win cash rewards, but they don’t have the requisite gambling licenses.

1-877-WIN-CAFE (946-2233)

Tucked in between tanning shops, restaurants and other strip mall staples, these cafes display brightly colored full-length signs that entice customers to surf the web and win cash. One Internet cafe even uses the business name “Monte Carlo.”

Operators Insist Customers Are Only “Buying Internet Time”

Despite state officials’ insistence on the illegal nature of the cafes (which use casino-style gaming software), proponents say customers are only buying Internet time.

Michigan is cracking down on Internet cafes that offer games of chance and gambling.

Investigations revealed that an arguably elusive Michigan-based company known as Innovative Entertainment is responsible for licensing this software. The cafe’s computer systems feature Internet access with added games of chance. Customers can earn points while playing games, which can be redeemed for cash rewards. Other locations give customers free sweepstakes entries when they purchase Internet time.
Illegal Gambling Is Frowned Upon In Michigan But Some Think There Aren’t Actually Any Regulations Against It

Like many states, Michigan has strict illegal gambling laws. In fact, the Michigan Gaming Control Board published an explicit statement regarding Internet sweepstakes cafes. According to the organization, there is no exception in the penal code regulating illegal lotteries and gambling.

Furthermore, criminal misdemeanor punishments for individuals who maintain gaming rooms, casino tables and games of chance or skill include a $1,000 fine or up to two years in prison. While the attorney general found a statewide crackdown to be the most effective way to target these establishments, local officials are less enthusiastic. Davison Police Chief Bill Brandon said that the businesses seemed to conform to commercial zoning regulations, but his organization would assist with any enforcement efforts.

Until recently, even the prosecutor in Genesee County was unaware of the issue or the presence of such establishments. The prosecutor said that these businesses are taking advantage of a legal gray area and engaging in activities that state laws don’t permit but don’t explicitly prohibit.

Currently, business owners have voluntarily ceased operations, and Innovative Entertainment agreed to remotely disable the software. This issue brings up a double legal standard where companies like McDonald’s are permitted to run contests that encourage customers to buy more.

While the Internet cafes are not de facto casinos, state officials may need to enact new laws to combat these increasingly popular businesses.

http://www.aaronkellylaw.com/internet-law/michigan-internet-cafes-shut-down-for-illegal-gambling/