Mich. AG issues cease and desist letters to Internet sweepstakes cafes

Bryan Cohen Jun. 14, 2012, 7:43am


LANSING, Mich. (Legal Newsline) - Michigan Attorney General Bill Schuette announced Tuesday that his Alcohol & Gambling Enforcement Division issued cease and desist letters to nine Internet sweepstakes cafes that allegedly engaged in illegal gambling.

The letters resulted from a campaign by Schuette's office, the Michigan Gaming Control Board and the Michigan State Police to find illegal gambling operations. In May, Schuette's office announced that it closed down eight sweepstakes cafes after reaching an agreement with a gaming software supplier.

"We will continue to work with the Michigan State Police and the Michigan Gaming Control Board to shut down any illegal gambling operations we find," Schuette said. "Citizens should steer clear of Internet sweepstakes cafes that are nothing more than unregistered, illegal casinos."

The letters were sent to Treasure Island and Spin City Internet Cafe in Lansing, East Point Business Center & Internet Cafe and West Point Business Center & Internet Cafe in Flint, Players Club Internet Cafe in Warren, Super Cafe Internet Cafe in Taylor, Players Club Pontiac Internet Cafe in Pontiac, Treasure Internet Lounge in Clinton Township and Treasure One Cyber Cafe in Roseville. The letters warn the owners of possible legal action if they refuse to halt ongoing gambling operations that are in violation of state gaming laws.

If any of the locations fail to halt operations, Schuette will take further action to shut them down immediately through the civil or criminal court system. Owners and operators of the businesses may still face additional criminal or civil charges.

After a series of similar cease and desist orders were issued by Schuette's office in May, an agreement was reached with Innovative Entertainment to voluntarily close eight Michigan locations. Innovative Entertainment supplied and licensed the casino-style gaming software and agreed to shut multiple locations down remotely. The locations shut down included Starz Cafe and Lucky's Internet Cafe in Grand Rapids, Knights Cafe in Jackson, The Luck Spot in Portage, Cyber Cafe in Holt, Cyber Cafe 2 in Saginaw, Lansing Business Center in Lansing and Flint Business Center in Flint. An additional location, Players Club Internet Cafe in Westland, also voluntarily closed since the action taken by Schuette's office.

Internet sweepstakes cafes are businesses that sell both internet access and a chance to play computer-based casino-style games that can result in cash prizes. The cafes contain rows of computers with internet access and some serve light fare to patrons. With each purchase, customers are given an opportunity to reveal of the sweepstakes entries are winners using a computer monitor with a spinning wheel similar to video slot machines. Schuette alleges that such gaming violates the Michigan Gaming Control and Revenue Act.

The Michigan Gaming Control and Revenue Act and Michigan's Penal Code strictly prohibit unregulated gambling. The gambling authorized under state law include certain charity events and casino gambling, the state-sponsored lottery, bingo and pari-mutuel horse racing licensed under the Michigan Gaming Control and Revenue Act.

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