Kern County judge pulling plug on gambling at Internet cafes

Kern County judge pulling plug on gambling at Internet cafes »Play Video
A Fun Zone Internet Sweepstakes Cafe is seen in Bakersfield in an October 2011 file photo.

BAKERSFIELD, Calif. (KBAK/KBFX) — The Kern County District Attorney's Office is going after local Internet cafes, saying their sweepstakes services are really illegal gambling operations.

Ahead of a civil trial, a judge has ordered nine to stop their sweepstakes activities. The businesses said the sweepstakes are only a marketing promotion and not illegal.

Deputy D.A. Greg Pulskamp told Eyewitness News investigations started several months ago into what happens at the Internet cafes.

"What they're offering in exchange for the money is actually the opportunity to win more money," Pulskamp said. "The true product is the gambling device."

The cafes say they're selling Internet minutes, prepaid phone cards or other products and services.

Phillip Walker runs the Oz Internet Sweepstakes Cafe on F Street. He said they offer a range of services, such as copying, setting up email accounts and selling minutes of Internet use. Walker said a customer can pay $5 for an hour of Internet use, for example, and they'll be given sweepstakes points which can be played on a computer in the cafe.

"After a period of time when you're playing, it will accumulate what you would have won," Walker explained. "On the other hand, you would not even have to go to the computer. Once the sweepstakes are presented to you, you can ask for instant reveal, and we can tell you instantly whether or not you've won anything."

Pulskamp is convinced customers are gambling.

"It's pretty clear they're really paying for the gambling," Pulskamp said."That's why they gave up the money."

The D.A.'s office filed requests for preliminary injunctions against the cafes, and, on Monday, a judge ordered four must stop the sweepstakes part of their businesses. The orders will take effect when the judge signs the formal orders.

Those four cafes are:

  • l-Zone Internet Cafe, 3815 Auburn St.
  • A2Z Internet Cafe, 3015 F St.
  • Oz Internet Sweepstakes Cafe, 3201 F St.
  • Landing Strip Internet Cafe, 1400 Airport Drive

Tuesday, a woman inside A2Z said no one was available to comment. The businesses appeared to have a couple dozen computers inside, and that's all.

At the Landing Strip, an owner referred Eyewitness News to their attorney. Reached at his Los Angeles office, Jerome Mooney said the sweepstakes they offer are not gambling.

"It's just like a promotion at Albertsons," Mooney said. "We're just promoting our product, selling computer time. It's a common thing to  utilize giveaways for promotions."

He said it's similar to getting a scratch-off ticket, but to verify the sweepstakes at an Internet cafe, the customer has the more "entertaining" experience of playing a computer game to see what they've won.

"Our company provides a meaningful product needed in the community," Mooney said. "We hope to demonstrate this (the sweepstakes) is legal and acceptable."

The cafe was open on Tuesday, and an owner told Eyewitness News if they choose to that they can stay open, even with the judge's order to not provide the sweepstakes.

At the I-Zone Cafe on Auburn, the facility appeared to be closed. A man who drove up, said he came there often. He didn't want to give his name, and told a reporter he had played the sweepstakes, and he had lots of internet minutes accumulated, and he had "lost money" at the business.

He described the cafe as a "really nice place."

A man who identified himself as the shopping center landlord also said the cafe was a good business, run by "model tenants." The landlord said most cafe customers were in their 40s and 50s. And there was never any trouble at the facility.

But, Pulskamp said some locations had drawn a lot of complaints. "There was a dramatic increase in the number of vandalism incidents, drug use, even allegations of prostitution," he said.

Five other cafes also face legal action, and were previously ordered to temporarily stop any sweepstakes component of their business. They are:

  • Happy Land, 1129 Olive Drive
  • Fun Zone Internet Sweepstakes Cafe, 3428 Stine Road
  • Fun Zone Internet Sweepstakes Cafe, 624 Morning Drive
  • Fun Zone Internet Sweepstakes Cafe, 10602 Main St., Lamont
  • Fun Zone Internet Sweepstakes Cafe, 800 11th Ave., Delano

Eyewitness News checked into the southwest Bakersfield Fun Zone location last fall, after getting complaints from a viewer. That woman was concerned the sweepstakes games really were gambling.

Pulskamp said their investigation shows customers have lost a lot of money in the sweepstakes.

"Theoretically, you an lose hundreds or thousands," he told Eyewitness News. "We know for sure through people we've talked to, there's actually patrons that have won or lost hundreds. The businesses themselves, of course, are making thousands."

Pulskamp said internet cafe gambling is an issue across the county, and other states are grappling with it. But, Kern has seen more than a dozen open up in the last few months.

"For whatever reason, Bakersfield and Kern County seem to be a real hot spot for the national corporations," Pulskamp said. He says those are the big companies that create and distribute the software for the computer games.

At Oz Cafe, Walker says they offer products and services, the sweepstakes games are only a promotion. Customers spend money for real products, like use of Internet time, or making copies.

"You can walk out of here with the copies, same way any other place that offers a sweepstakes," he said. Walker adds, he hopes the courts will rule on this question, so businesses like his aren't left in limbo.

Pulskamp believes the sweepstakes are gambling, and hopes the U.S. Attorney or California Attorney General's office will go after the big companies marketing the game software. He promises to actively go after local cafe operators.

Under the case they've filed, operators face penalties of $2,500 for every act done in violation of California gambling laws.

"We intend to fully, fully pursue these," Pulskamp said. "And the reality is, somebody could end up facing a judgement and having to pay many thousands of dollars in penalties."

On Aug. 10, the judge is set to consider preliminary injunctions against the five cafes that are now under temporary restraining orders. Pulskamp said an eventual civil trial against the nine operations could be months or years away.