Fla. gambling probe points up nationwide problem

Associated Press

ST. PETERSBURG, Fla.

The charity-run businesses under investigation in a Florida gambling probe started popping up in strip malls about six years ago and rapidly spread as the unregulated stores became a billion-dollar enterprise.

One of the industry’s biggest players was toppled last week when about 50 people were arrested in a handful of states, many of them charged with racketeering and conspiracy, authorities said. They all were linked to Allied Veterans of the World, a veterans charity accused of masking a $300 million illegal gambling ring.

Allied Veterans had about 50 locations, but by some estimates, there are 1,000 such storefronts across Florida. These so-called Internet cafes, which authorities said are actually small casinos with slot machine-style games, have mushroomed in Ohio, South Carolina, North Carolina and elsewhere.

“I’m thoroughly convinced they are illegal in every state in the union,” said David Stewart, a Washington lawyer who works for the casino industry’s main lobbying group, the American Gaming Association.

He compared the parlors to kudzu, a fast-growing, invasive vine. “They grow when people aren’t paying attention.”

The scandal brought down Florida’s lieutenant governor, who was questioned in the probe but not charged. Authorities said charity leaders spent very little on veterans and lavished millions on themselves, buying boats, beachfront condos and Maseratis, Ferraris and Porsches.

Authorities said they also were looking into campaign donations and lobbyists.

An Associated Press review of the key players behind the charity showed they pumped more than $1 million into the campaign accounts of Florida politicians who had the power to regulate or put them out of business.

The businesses in Florida and elsewhere often operate in a gray area. The game makers argue they are legal sweepstakes because there’s a predetermined number of winners, similar to a McDonald’s Monopoly game or Coca-Cola’s cap contest.

The purported ringleader, the charity’s attorney Kelly Mathis, wrote opinion pieces and argued before local governments that the games were legal.

To label these businesses as strip-mall casinos “is an unfair and inaccurate characterization of these businesses,” Mathis wrote to tcpalm.com in 2011.

He said many customers don’t have Internet at home and pay bills, prepare resumes and check email there.

Marc Dunbar, a Tallahassee attorney, law professor and lobbyist for horse tracks has urged state legislators to shut down these businesses.