CITY OF ORMOND BEACH

Transcription

1 CITY OF ORMOND BEACH Office of the City Attorney P.O. Box South Beach Street Ormond Beach, FL 3217S-0277 (386) Fax (386) CITY A HORNEY MEMORANDUM To: Honorable Mayor Kelley and City Commissioners From: Randal A Hayes, City Attorney ~ Date: October 18, 2011 Subject: Ordinance amending Chapter 12, Article V of the Code of Ordinances prohibiting commercial gaming devices and establishments (commonly referred to as "internet cafes"). Introduction. This ordinance will prohibit commercial gaming devices and those commercial establishments that use these devices to create a simulated casino experience (commonly referred to as "internet cafes"). Currently, the City has a moratorium in effect precluding electronically simulated gambling activities pending the adoption of the attached ordinance. In addition, the proposed ordinance will add regulations pertaining to automatic amusement devices and centers (game rooms). The game room regulations are already contained in the Land Development Code. The provisions are being added to the Code to mirror the LDC regulations for clarity purposes. Background. Electronically simulated gambling devices have proliferated at internet cafes throughout many local jurisdictions. Although the Florida legislature failed during its recent legislative session to enact any laws regarding these activities, the Florida Attorney General has issued a legal opinion providing such devices constitute illegal gambling devices. According to a 2011 Report by the Florida Council on Compulsive Gambling (FCCG), internet sweepstake centers (using commercial gaming devices) are gambling centers because they require a person to spend money or risk another item of value on an outcome or event uncertain to the person playing. FCCG has found that callers to its Helpline regarding internet/commercial gaming sites report the same negative consequences as other forms of gambling. Callers reported difficulties avoiding internet commercial gaming sites since these establishments are located in strip malls or by other stores they frequent. The FCCG considers internet commercial gaming sites to be "convenience gambling". In the cities where internet cafes are located, there have been reports of crime occurring at the businesses, including violent crime. Staff has already been contacted from persons interested in opening internet cafes in Ormond Beach. If the city does not prohibit internet cafes, it leaves open the potential that these will proliferate in the city, along with the negative secondary impacts. Budget Impact. There will be no budget impact. Recommendation. It is recommended that the City Commission approve the attached ordinance. Extension of internet cafe moratorium-cc memo\ 10/12/11

2 ORDINANCE NO AN ORDINANCE OF THE CITY OF ORMOND BEACH PROHIBITING COMMERCIAL GAMING DEVICES AND REGULATING AUTOMATIC AMUSEMENT CENTERS/GAME ROOMS AND AUTOMATIC AMUSEMENT DEVICES, BY AMENDING CHAPTER 12, ARTICLE V AUTOMATIC AMUSEMENT DEVICES, OF THE CODE OF ORDINANCES OF THE CITY OF ORMOND BEACH BY PROVIDING A REVISED TITLE TO INCLUDE COMMERCIAL GAMING DEVICES; AMENDING SECTION BY ADDING NEW DEFINITIONS; REPEALING SECTION , PURPOSES AND OBJECTIVES AND ADDING A NEW SECTION TITLED LEGISLATIVE FINDINGS AND PURPOSE; AMENDING SECTION TO INCLUDE ADDITIONAL REGULATIONS FOR AUTOMATIC AMUSEMENT DEVICES AND CENTERS; REPEALING SECTION , NUMBER OF MACHINES AND ADDING A NEW SECTION TITLED PROHIBITION OF COMMERCIAL GAMING DEVICES; ADDING A NEW SECTION TO INCLUDE REMEDIES AND PENALTIES; ADDING A NEW SECTION ESTABLISHING EXEMPTIONS; ADDING A NEW SECTION , CONFLICT WITH STATE LAW; PROVIDING FOR THE REPEAL OF ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT HEREWITH; PROVIDING FOR A SEPARABILITY CLAUSE; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the Florida Constitution and Florida Statutes prohibits gambling, except for very narrow exceptions, and WHEREAS, the City of Ormond Beach is experiencing an increasing interest in establishments that utilize computer or video displays of spinning reels or other simulations of games ordinarily played on a slot machine or in a casino or otherwise in connection with gambling and which show the results of raffles, sweepstakes, contests, or other promotions for commercial gain (hereinafter collectively referred to as commercial gaming devices ), and WHEREAS, various companies have developed electronic machines and devices through the pretextual conduct of providing charitable or nonprofit drawings by chance or raffles - 1

3 or game promotions in connection with incidental consumer sales or services of internet or phone time, and WHEREAS, the City Commission recognizes that while the State of Florida has authorized slot machine gaming at licensed facilities in selected areas within the state, under no circumstances does the law authorize or permit slot machine gambling or any activity resembling slot machine gambling in the City of Ormond Beach. Establishments that utilize commercial gaming devices can deceive members of the public into believing that they are engaging in a lawfully permitted gaming activity; and WHEREAS, commercial gaming devices are therefore inherently deceptive; and WHEREAS, on July 19, 2011 the Attorney General for the State of Florida issued a legal opinion (AGO ) to the Honorable Glenn Hess, State Attorney for the 14 th Judicial Circuit of Florida, providing that electronic games that simulate gambling devices in all material respects constitute illegal slot machines or devices; and WHEREAS, it has been well documented that gambling can lead to harmful behavior in some people and be an addictive activity that can lead to uncontrollable wagering and loss of money and valuables; and WHEREAS, according to a 2011 Report by the Florida Council on Compulsive Gambling (FCCG), internet sweepstake centers, which commonly provide commercial gaming devices for use by patrons, are gambling centers because they require a person to spend money or risk another item of value on an outcome or event uncertain to the person playing. FCCG has found that callers to its HelpLine regarding internet/commercial gaming sites report the same negative consequences as other forms of gambling. Callers reported difficulties avoiding - 2

4 internet commercial gaming sites since these establishments are located in strip malls or by other stores they frequent. The FCCG considers internet commercial gaming sites to be convenience gambling ; and WHEREAS, in terms of the negative secondary impacts cited in the reports and herein, there is little or no material difference between the use of slot machines as prohibited by Florida Statutes and the use of commercial gaming devices; and WHEREAS, a correlation often exists between establishments that utilize commercial gaming devices and crime or disturbances of the peace and good order of the community and, although there has not been a proliferation of such establishments in Ormond Beach, the concurrence of those activities would be hazardous to the public health, safety and general welfare of the citizens of Ormond Beach; and WHEREAS, Chapter 849, Florida Statutes provides that the laws of this state prohibiting lotteries and gambling is a lawful exercise of the police power of the state for the protection of the public welfare, health, safety and morals of the people of the state. Further, Section provides that all provisions of the chapter shall be liberally construed for the accomplishment of these purposes; and WHEREAS, in order to preserve the public peace and good order, and to safeguard the health, safety, morals and welfare of the community and citizens thereof, it is necessary and advisable to prohibit within the City of Ormond Beach the possession, use, playing and operation of devices defined herein as commercial gaming devices; and - 3

5 WHEREAS, this ordinance is enacted pursuant to the home rule powers of the City of Ormond Beach as set forth at Article VIII, Section 2, of the Constitution of the State of Florida; Chapter 166, Florida Statutes, and other applicable controlling law, now therefore, BE IT ENACTED BY THE CITY COMMISSION OF THE CITY OF ORMOND BEACH, FLORIDA, THAT: SECTION ONE. The title of Article V, Automatic Amusement Devices, of the Code of Ordinances is hereby amended to read as follows: ARTICLE V. AUTOMATIC AMUSEMENT DEVICES AND COMMERICIAL GAMING DEVICES SECTION TWO. Article V, Section , is hereby amended to read as follows: Sec Definitions. The following words, terms and phrases, when used in this article, shall have the meaning ascribed to them in this section, except where the context clearly indicates a different meaning: Automatic amusement centers/game rooms: Any premises upon which the principal business is the operation of automatic amusement devices. Automatic amusement devices: Any machine device operated as a game of skill which upon the insertion of a coin, slug, token, plate or disc, may be operated by the public generally for use as a game, entertainment, or amusement, whether or not registering a score, including but not limited to such devices as marble machines, pinball machines, skillball, mechanical grabmachines, and all games, operations or transactions similar thereto under whatever name they may be indicated. It shall include video type games or machines, or similar devices that use a display screen for points, lines and dots of light that can be manipulated to simulate games or other types of entertainment, except that it shall not include commercial gaming devices as defined in this section. It shall not include nor shall this article apply to music playing devices or noncompetitive devices. Distributor: Any person who supplies any automatic amusement device to another for use on his premises, whether under lease or any similar arrangement. Operator: Any person on whose premises any automatic amusement device is placed or kept for operation. - 4

6 Commercial Establishment: Any establishment, whether operated for profit or not, that exchanges goods, products, services, or property of any kind for compensation or donation in the ordinary course of trade, business, or fundraising, regardless of the land use designation assigned to the location of the commercial establishment. Commercial Gaming Device: Any electronic, mechanical or electromechanical device that, by the use or insertion of a coin, bill, token, slug, form of payment, passcode, account number, user name, electronic or magnetic card in conjunction with the device or other reader or system connected or networked to the device or with the aid of some physical act by the user or commercial establishment representative, the device will allow an operator to use, play or operate the device such that the device displays simulated or actual games of chance, slot machine games, spinning wheels, line ups or arrangements of objects, symbols, colors, fruit, numbers or letters, or any game known as or similar to keno, roulette, faro, game at cards, poker, blackjack, Fruit Paradise, New Cherry, Fruit Bonus, Triple Jack, Magical Odds, Mystery J&B, Klondike, or Reel of Fortune in such a way as to display, disclose or reveal whether the user is to receive or become entitled to receive a payout, jackpot, or prize, which may include money, credits, tokens, or anything of value, or anything that may be exchanged for money, credits, tokens, or anything of value, regardless of whether such payout, jackpot, or prize (including results from a sweepstakes, drawing, contest or other game promotion) is made automatically from the device or other reader or system connected or networked to the device, or manually and such device is located and used, played or operated in or at a commercial establishment in connection with the promotion, sale or purchase of good(s), products(s) or service(s). The term commercial gaming device further includes, without limitation, a slot machine as defined by Section , Florida Statutes. Commercial gaming device shall not be construed so as to preclude the lawful use or possession of: (i) reverse vending machines authorized pursuant to Section (2), Florida Statutes, (ii) amusement games or machines authorized pursuant to Section , Florida Statutes, (iii) bingo, instant bingo or pull tab machines or dispensers operated in accordance with Section , Florida Statutes, (iv) a State of Florida lottery device authorized by Florida Statutes, or (v) any other device expressly authorized by and complying with the Florida Statutes and the Florida Administrative Code. Commercial gaming device shall not be construed to include devises not otherwise prohibited by general law that are not located in or at a commercial establishment and are used, played or operated for non-commercial purposes (ie., not in connection with the promotion, sale or purchase of good, products or services). Person: An individual, association, partnership, joint venture, corporation, or any other type of organization, whether conducted for profit or not for profit, or a director, executive, officer or manager of an association, partnership, joint venture, corporation or other organization. - 5

7 SECTION THREE. Article V, Section , Purpose and Objectives is hereby repealed and a new section to be titled Legislative intent and purpose is hereby added and shall read as follows: Sec Purposes and objectives. (a) (b) The purpose of this article is to receipt, regulate and control those automatic amusement devices which are operated for the purpose of making a profit. The objective of this article is to regulate the business of automatic amusement devices so as to prevent nuisances to patrons in the public, fire hazards from overcrowding, poor ingress and egress of premises where automatic amusement devices are located, the promotion of gambling, loitering, or the creation of an unhealthy atmosphere for the youth of the community, or other foreseeable undesirable effects of such devices. Sec Legislative findings and purpose. (a) (b) (c) (d) Gambling is prohibited within the State of Florida, except with very narrow exceptions as provided in Chapter 849, Florida Statutes and the Florida Constitution. Section , Florida Statutes provides that the laws of this state prohibiting lotteries and gambling is a lawful exercise of the police power for the protection of the public welfare, health, safety and morals of the people of the state, and that the provisions of Chapter 849 shall be liberally construed for the accomplishment of these purposes. There has been a proliferation throughout the state of, and the City of Ormond Beach is experiencing an increasing interest in, establishments that utilize computer or video displays of spinning reels or other simulations of games ordinarily played on a slot machine or in a casino or otherwise in connection with gambling and which show the results of raffles, sweepstakes, contests, or other promotions for commercial gain ( commercial gaming devices ). Commercial gaming devices are not expressly allowed by the statute or the Florida Constitution. Commercial gaming devices are inherently deceptive because they deceive members of the public into believing that they are engaging in a lawfully permitted gaming activity. Commercial gaming devices are a medium by which gambling activities are conducted. The intent of this Article is to broadly prohibit commercial gaming devices within the corporate boundaries of the City of Ormond Beach. Further, the prohibition of commercial gaming devices should in no way be interpreted that the city intends to approve the use of actual slot machines, or other forms of casino gambling or other types of gambling devices. - 6

8 This prohibition is directed at devices that simulate gambling activity, regardless of whether the devices or the simulations can be said to constitute gambling. (e) (f) The authority for enacting this Article is derived from the city s home rule powers as provided in Article VIII, Section 2 of the Florida Constitution and Chapter 166, Florida Statutes, to give effect to the legislative intent provided in Section , Florida Statutes prohibiting lotteries and gambling in order to protect the public welfare, health, safety and morals of the citizens of Ormond Beach and the general public. In addition, the city commission intends to strictly regulate the business of automatic amusement centers/game rooms and automatic amusement devices so as to prevent nuisances to patrons in the public, fire hazards from overcrowding, poor ingress and egress of premises where automatic amusement devices are located, the promotion of gambling, loitering, or the creation of an unhealthy atmosphere for the youth of the community, or other foreseeable undesirable effects of such devices. SECTION FOUR. Article V, Section , is hereby amended as follows: Sec Location. Regulations pertaining to automatic amusement devices and centers. (a) When the sole business operated on the premises is the operation of any automatic amusement devices, said premise must be located more than one thousand (1,000) feet from any school, house of worship, public park, or youth activity building. No two (2) amusement centers shall be located closer than 1,000 feet from one another. The distance shall be measured by following the shortest route of ordinary pedestrian travel along the public thoroughfare from the main entrance of the premises wherein the automatic amusement devices are located to the main entrance of the said school, house of worship, public park, or youth activity building. (b) Each automatic amusement device shall be located at least ten (10) feet from the entranceway to the premises in which located and placed so that it does not obstruct or interfere with the free and unfettered passage of patrons or users of the premises. (c) The maximum number of automatic amusement devices shall be limited to one (1) amusement device per fifty (50) square feet of premises used for the operation of such devices. The computation shall exclude any portion of the premises used for the storage or sales of automatic amusement devices or the conduct of any business other than the operation of automatic amusement devices. (d) Specific hours of operation may be required in accordance with applicable regulations of the Land Development Code if the use may impact adjacent or nearby residential uses. The premises shall be screened to minimize noise and glare impacts to neighboring residential uses. - 7

9 (e) No person shall in any automatic amusement center permit gambling in connection with the playing of any automatic amusement device. (f) Automatic amusement centers shall at all times maintain a current inventory of all games kept on the premises, including the name of the game which appears on the screen when the automatic amusement devices is in attract mode, the manufacturer, serial number, the actual owner of the machine with the owner s address and phone number, and attachment of license to each machine. (g) The inventory required in section (f) above shall be provided to the city s Planning Department as a condition to the issuance of an approved development order. Any change whatsoever in the games or machines at the premises must be so indicated on an updated inventory which shall be provided to the Planning Department within 10 business days of such changes. (h) The general public shall be allowed in all automatic amusement centers. No automatic amusement center shall restrict access to the site by the use of age restrictions or membership to the center. (i) No automatic amusement center shall offer prizes, tickets, or other merchandise over $5.00 in value. Automatic Amusement Centers shall not allow customers to maintain a running tally of points for prizes or other goods. (j) Automatic amusement centers shall be prohibited from offering gift certificates, gift cards, or other cash substitutes. (k) There shall be no alcoholic beverages possessed, dispensed, sold, or otherwise consumed on the premises. (l) Automatic amusement devices are prohibited from having switchable, programmable, or random generator devices to allow a rate of return to business operators or machine owners. (m) All applicable state permits shall be submitted to the city prior to the final release of a certificate of occupancy. (n) Prior to the issuance of a certificate of occupancy, city neighborhood improvement officials and law enforcement officials shall inspect the automatic amusement devices for compliance with Chapter 849, Florida Statutes. (o) Once a certificate of occupancy has been issued, city officials shall be allowed to conduct random inspections of the automatic amusement devices, games, and the failure to cooperate with the inspections shall be grounds to revoke the certificate of occupancy and/or business tax receipt. - 8

10 (p) Automatic Amusement Centers/Game Rooms contained within the principal building shall be permitted as an accessory use to transient lodging facilities, bowling centers, skating centers, and in Type E restaurants, and shall not be subject to the above requirements, provided that the accessory use does not provide any type of prizes, tickets, or other merchandise. If the use awards prizes, tickets, or other merchandise, then they shall be subject to the provisions above. SECTION FIVE. Article V, Section , is hereby amended as follows: Sec Number of machines. (a) Where the sole business operated on the premises is the operation of the automatic amusement devices, or where the business qualified for the exception, provided by the subsection (b) of this section, the maximum number or automatic amusement devices is two (2) automatic amusement devices per one hundred (100) square feet of premises used for the operation of such automatic amusement devices, computation of which area shall exclude any portion of the premises used for the storage or sales of automatic amusement devices or the conduct of any business other than the operation of automatic amusement devices. (b) Where some business other than the operation of automatic amusement devices is conducted on the premises, the maximum number of automatic amusement devices is tow (2) except that more than two (2) automatic amusement devices may be allowed provided that: (1) The automatic amusement devices are placed in an enclosed room separate and apart from the primary business conducted in the premise; and (2) Access to the said room is only through the entrance to the premises itself; and (3) The operator or any employee of the operator shall observe at all times the point of access to the said room to verify that the use of the automatic amusement devices therein are in compliance with the terms of this article. Sec Prohibition of commercial gaming devices. It is unlawful within the city boundaries of Ormond Beach to possess, use, play, or operate a commercial gaming device. Each individual use, play, operation or possession of a commercial gaming device shall be a separate violation punishable as provided by this Section. A violation of this Section shall constitute a public nuisance, which may be punishable as provided in section (a), (c) or (d) of this Article. Alternatively, a violation shall constitute a misdemeanor of the second degree punishable as provided in section and , Florida Statutes. SECTION SIX. Article V is hereby amended by adding Section to read as follows: Sec Remedies and penalties. - 9

11 In the event that a violation of this Article occurs, the city shall have the right to one or more of the following remedies or action: (a) Pursuant to Section of this Code, institute code enforcement proceeding and prosecute code violations against the violator and the property owner of the real property where the violation occurs. Each and any possession or use of any commercial gaming device or amusement device in violation of this Article, constitutes an individual offense subject to fine and punishable under Section of this Code. (b) Prosecute the violator for a criminal misdemeanor of the second degree, which shall be punishable for a term of imprisonment not exceeding sixty (60) days and a fine not exceeding $ as provided in sections or , Florida Statutes; (c) Institute any action or proceeding, either at law or in equity, including one for injunctive relief. In such case, the person committing the violation shall be liable to the city for reimbursement of the city s attorneys fees and costs, through and including all appeals. follows: SECTION SEVEN. Article V is hereby amended by adding Section to read as Sect Exemptions. (a) This article does not prohibit an individual s personal, recreational, and non-commercial ownership, possession, play, operation or use of a device which could be construed to be a simulated gambling device. (b) This article does not prohibit the ownership, possession, play, operation or use of any device expressly permitted by the Florida Statutes and not otherwise prohibited by the Florida Constitution, except that devices permitted by Article X, Section 23 of the Florida Constitution and Chapter 551, Florida Statutes, in Broward and Miami-Dade County only are not permitted by this ordinance. (c) This ordinance does not prohibit a religious or charitable organization from conducting a fund raising activity involving gaming, provided the religious or charitable organization does not conduct the activity more than twice in one (1) calendar year, the organization files in advance with the city an application and obtains a permit for a special event as provided for in the Land Development Code. (d) If the provision of this Article prohibiting commercial gaming devices is declared to be invalid through legislative action taken by the Florida legislature or by a court of competent jurisdiction, and the time expires to file an appeal without one being filed, or an appeal is timely filed but the appeal is ultimately unsuccessful, commercial gaming establishments shall constitute a permitted use subject to all regulations of Sections and of - 10

12 this Article and all applicable regulations of the Land Development Code pertaining to automatic amusement centers and devices. follows: SECTION EIGHT. Sec Conflict with State Law. Article V, is hereby amended by adding Section to read as Nothing in this ordinance is intended to conflict with the provisions of the Florida Constitution or Chapter 849, Florida Statutes, concerning gambling. In the event of a direct and express conflict between this ordinance and either the Florida Constitution or Chapter 849, Florida Statutes, then the provisions of the Florida Constitution or Chapter 849, Florida Statutes, as applicable, shall control. SECTION NINE. All Ordinances or parts of Ordinances in conflict herewith are hereby repealed to the extent of such conflict. SECTION TEN. In the event any work, phrase, clause, sentence, paragraph, term or provision of this Ordinance shall be held to be invalid by a court of competent jurisdiction, such judicial determination shall not affect any other work, clause, phrase, sentence, paragraph, term or provision, of this Ordinance, and the remainder of this Ordinance shall remain in full force and effect. SECTION ELEVEN. The moratorium first imposed by Ordinance No , approved on March 21, 2011, and extended by Ordinance No , approved on September 14, 2011, shall cease to exist and shall have no further legal effect upon the effective date of this ordinance SECTION TWELVE. This Ordinance shall take effect immediately upon its adoption. PASSED UPON at the first reading of the City Commission, this 18 th day of October, - 11

13 PASSED UPON at the second and final reading of the City Commission, this 1 st day of November, ATTEST: ED KELLEY Mayor JOSHUA FRUECHT City Clerk - 12

14 Problem Gambling News Sp~cial Edition VOLUME 29 Florida Council on Compulsive Gambling 24-HOUR HELPLINE: 888-ADMIT-IT ( ) MAY, 2011 Setting the Record Straight: Opinion vs. Fact Just the Facts: Asof2011,thereareinexcessof 600 Internet Cafit in Flon"da. During ,2.6% {68) of au caus lfj the Jtatewide 24- hour Problem Gambling HelpLine were received from pmons seeking help due to problems with Internet Centers. Within the first 10 months offy , callr roje to 4% (96) qf au contacts. Pninary calls were from resicknts in Duval, Vo!usia, Brevard, and Orange counties; areas without mtgor gamblingfacilitiet. Near!J 80% of these gamblers were female, the vast majority of whom were Caucasian or African American. The largest percentage of gamblers were ages 40 and oltkr, with primary calls from persons 4049 years,fouowed l{y seniors 55 and older, and those agu There was a tdjo!d increase in calfs from gamblers ages between FY to Ju!J Apn/2011. More than 25% ofthmgamb!ers were unempl((jed or di!ab!ed, and 15% were retired. Almost 80% reported difficulties paying bi!!s, more than 40% were pawning or selling assets, upwards of one-third were using savings, equity or retirement funds, and an equal number were engaging in i!!egal acts, to pay off debts or to continue gambling. Recently, the Florida Council on Compulsive Gambling (FCCG) was asked to distinguish between opinions and facts on the issue of Internet Sweepstakes Centers, also known as Internet Cafes and Internet Centers, per the Agency's April2011 online newsletter. FCCG's Opinion: It is the FCCG's professional opinion that Internet Sweepstakes Centers meet the definition of gambling, which requires a person spend money or risk another item of value on an uncertain outcome or event. This determination is based upon more than 20 years of expertise in the field, coupled with serving as the State's designated advocate on problem gambling and as operator of Florida's 24-Hour crisis HelpLine. Fact - Internet Centers Cause Gambling Problems The FCCG's concern about Internet cafes is in response to calls to our 24- Hour HelpLine. Florida residents are reporting problems similar to other forms of gambling. Increased calls this fiscal year document this point. (Read entire newsletter.) Legal Status While many Internet Cafes are licensed within counties, they are not subject to the same requirements that gambling facilities are in the state. In fact, some local law enforcement authorities have deemed these businesses illegal and have closed down operations. \X-HE:--.:: I,AMH!!NG Bl <- U\11 SA I'R(}Hl E:'\1 888-ADMIT-IT ~ t'>orl.d.> (<Rn>< l 0,. <:~mpod;lw G mm/,.g...,...,.,.,.,a.u..,~""'""!l 24-Hour Problem Gambling Helpline Facts More than 80% of all HelpLine callers experiencing difficulties with Internet Centers reported feelings of depression, anxiety (over 75%), family conflict (nearly 70%) or neglect (more than 50%). Over 15% of these contacts admitted to having suicidal thoughts or attempting suicide. The average gambling debt was more than 50% of the gamblers' average earnings. Callers reported difficulties avoiding Internet CafCs, since these establishments arc located in strip malls by other stores they frequent. Gambling P1 oblem? Call 888-ADMIT-IT Florida Council on Compulsive Gambling, Inc. 901 Douglas Avenue, Suite 200, Altamonte Springs, Flo ida fccg@gamblinghelp.org

15 Florida Council on Compulsive Gambling, Inc. Confidentia/24 Hour HelpLine 888-ADMIT-/T Internet Sweepstakes Centers This data is based on 122 contacts received from July 1, 2010 to June 30th 2011 from people experiencing problems due to Internet Centers ~ Over the past fiscal year, the FCCG has received 122 contacts from gamblers and loved ones who are experiencing gambling problems due to the Internet Sweepstakes Centers ~ 85% of these contacts were made by the gambler ~ 75% of the gamblers were female {40% of total sample during this time period were female) ~ 48% were Caucasian and 44% were Black/African American ~ 8% were retired and 29% were either unemployed or disabled individuals ~ 81% stated having problems paying household bills, 38% had used savings, equity or retirement monies to gamble, and 41% had resorted to selling or pawning assets in order to obtain money to gamble {8% had even claimed bankruptcy due to their gambling problem) ~ 31% had committed illegal acts to finance their gambling problem and 11% were subjected to legal action due to their gambling ~ 77% were suffering from depression, 74% from anxiety and 16% had serious suicidal ideations due to their gambling problem ~ 25% were older adults 55 years of age or older ~ Average household income was approximately $35,052 ~ Average debt owed due to gambling was approximately $17,518 and the average amount lost due to gambling was $49,038 ~ 34% of the gamblers stated that the difficulty they were having in paying household bills prompted them to call for assistance and 26% cited relationship problems due to gambling as the reason for reaching out ~ 66% stated having family conflict and 58% cited family neglect due to the gambling problem ~ More than one quarter (27%) of the gamblers were divorced or separated ~ Individuals from 24 different counties were represented by these 122 contacts with 34% originating from Duval

16 Advisory Legal Opinion - Gambling, veterans' organizations Page 1 of 6 Florida Attorney General Advisory Legal Opinion Number: AGO Date: July 19,2011 Subject: Gambling, veterans' organizations The Honorable Glenn Hess State Attorney 14th Judicial Circuit of Florida Post Office Box 1040 Panama City, Florida RE: GAMBLING-SLOT MACHINES-VETERANS' ORGANIZATIONS-applicability of prohibition of slot machines to machines operated by veterans' organization. ss , , and , Fla. Stat. Dear Mr. Hess: You ask substantially the following question: Does the electronic game operated by a veterans' organization as described in your letter constitute an illegal slot machine or device? In sum: Based upon the information you have provided regarding the electronic machine in question, such a machine would appear to constitute an illegal slot machine or device. You state that a local veterans' organization has acquired electronic games which appear to be slot-type machines. This office has been advised that the veterans' organization considers these games to involve an element of skill and thus be permitted under section , Florida Statutes, which provides an exception to the state's gambling laws for arcade amusement centers and truck stops. The Parker Chief of Police has directed the organization to turn the games off and your office has met with the organization and the games' distributor regarding the use of such games. According to your letter, the games operate as follows: 1. A player inserts a card containing purchased credits into the machine and is assigned points. 7/21/2011

17 ,Advisory Legal Opinion - Gambling, veterans' organizations Page 2 of 6 2. The player then wagers a number of points against the game. 3. When a button is pushed, images on the screen mimic the rotation of drums on a mechanical slot machine. 4. When the images come to rest, the order of their appearance on the machine shows whether the player has won (gained points) or lost. 5. At the conclusion of play, accumulated (or remaining) points are converted to a monetary amount and placed on a Visa card; the card cannot be cashed out by the machine or at the VFW (Veterans of Foreign Wars) Post establishment. However, players can use the card to purchase merchandise at retail stores, much like a gift card. From the information you have provided, it appears that the machines in question are operated by the insertion of an object into the machine, i.e., a card containing purchased credits, which permits the player to place a wager and play a game on the machine involving an element of chance. Points are gained or lost based upon the outcome of the game. At the conclusion of play, the points are converted into a monetary amount and placed on a card which may be used to purchase merchandise at retail stores. Based upon such a description, the machines in question would appear to constitute slot machines as defined in section (1), Florida Statutes. Pursuant to section , Florida Statutes, it is unlawful to possess or permit the operation of any machine or device that satisfies the description provided in section , Florida Statutes. Section describes the prohibited machines or devices in the following terms: "(1) Any machine or device is a slot machine or device within the provisions of this chapter if it is one that is adapted for use in such a way that, as a result of the insertion of any piece of money, coin, or other object, such machine or device is caused to operate or may be operated and if the user, by reason of any element of chance or of any other outcome of such operation unpredictable by him or her, may: (a) Receive or become entitled to receive any piece of money, credit, allowance, or thing of value, or any check, slug, token, or memorandum, whether of value or otherwise, which may be exchanged for any money, credit, allowance, or thing of value or which may be given in trade; or (b) Secure additional chances or rights to use such machine, apparatus, or device, even though it may, in addition to any element of chance or unpredictable outcome of such operation, also sell, deliver, or present some merchandise, indication of weight, entertainment, or other thing of value."[l] (e.s.) Thus, if the receipt of a prize is dependent on any element of chance, the machine would fall within the above definition of a slot machine proscribed by section , Florida Statutes. [2] As stated / 7BA63010A430E D3005E77 Al 7/21/2011

18 Advisory Legal Opinion - Gambling, veterans' organizations Page 3 of 6 by the Supreme Court of Florida in Deeb v. Stoutamire[3] in considering the statutory definition of a slot machine: "The law denouncing slot machines defines them as devices so adapted that "as a result of the insertion" of a coin they are "caused to operate or may be operated, and by reason of any element of chance or of other outcome of such operation unpredictable by him, the user may receive or become entitled to receive any * * * thing of value" or anything which may be exchanged for something of value, such as money or merchandise, "or the user may secure additional * * * rights" to play, "even though [the machine] may, in addition to any element of chance or unpredictable outcome" deliver merchandise or entertainment. (emphasis supplied by Court) The Court defined slot machines by referring to the chance or unpredictability of the mechanism, not of the player. While the statutory definition of slot machines has been subsequently amended, such amendments do not appear to have affected the operative language of the Court's holding in Deeb relating to chance. More recently, the district court in State, Department of Business and Professional Regulation, Division of Alcoholic Beverages v. Broward Vending, Ina., [4] relied on Deeb in reversing the lower court's ruling that a game machine in which skill was a significant factor in operating and winning did not violate the statute. Instead, the district court held that where chance is an element of the game, section , Florida Statutes, is violated. An exception to the proscription against slot machines is contained in section , Florida Statutes, for arcade amusement centers which have certain coin-operated amusement games or machines in which skill is present. The statute provides: "Nothing contained in this chapter shall be taken or construed as applicable to an arcade amusement center having amusement games or machines which operate by means of the insertion of a coin and which by application of skill may entitle the person playing or operating the game or machine to receive points or coupons which may be exchanged for merchandise only, excluding cash and alcoholic beverages, provided the cost value of the merchandise or prize awarded in exchange for such points or coupons does not exceed 75 cents on any game played. * * * Nothing in this subsection shall be taken or construed as applicable to a coin-operated game or device designed and manufactured only for bona fide amusement purposes which game or device may by application of skill entitle the player to replay the game or device at no additional cost, if the game or device: can accumulate and react to ; 7BA63010A430E D3005E77 Al 7/21/2011

19 Advisory Legal Opinion - Gambling, veterans' organizations Page 4 of 6 no more than 15 free replays; can be discharged of accumulated free replays only by reactivating the game or device for one additional play for such accumulated free replay; can make no permanent record, directly or indirectly, of free replays; and is not classified by the United States as a gambling device in 24 U.S.C. s. 1171, which requires identification of each device by permanently affixing seriatim numbering and name, trade name, and date of manufacture under s. 1173, and registration with the United States Attorney General, unless excluded from applicability of the chapter under s This subsection shall not be construed to authorize video poker games, or any other game or machine that may be construed as a gambling device under Florida law."[5] The term "arcade amusement center" as used in section means "a place of business having at least 50 coin-operated amusement games or machines on premises which are operated for the entertainment of the general public and tourists as a bona fide amusement facility."[6] Subsection (1) (a)2. of the statute creates a similar exemption for amusement games or machines located in a truck stop as defined therein. [7] Thus, section , Florida Statutes, provides an exemption for machines that would otherwise be prohibited by Chapter 849, Florida Statutes, if those machines are located in an arcade amusement center or truck stop, as those terms of defined by statute, and if, by the application of skill, the player receives a prize as prescribed therein. [8] This office, however, has no information that would indicate that the veterans' organization qualifies for either exception. In fact, you have advised this office in a subsequent letter that the veterans' organization does not have 50 machines on its premises and that it is open only to its members and their guests. Accordingly, it would not fall within the exception afforded arcade amusement center as that term is defined by statute. Nor do the machines in question constitute games that charitable or nonprofit organizations would be authorized to conduct as exemption to the general prohibition against gambling under Chapter 849, Florida Statutes. Such machines do not fall within the terms of section , Florida Statutes, which authorizes certain nonprofit organizations to conduct bingo games or instant bingo, [9] or section , Florida Statutes, which authorizes specified nonprofit organizations to conduct drawings by chance. [10] Accordingly, I am of the opinion that the electronic games operated by a veterans' organization as described in your letter constitute illegal slot machines or devices. Sincerely, Pam Bondi 7BA63010A430E D3005E77 Al 7/21/2011

20 Advisory Legal Opinion - Gambling, veterans' organizations Page 5 of 6 Attorney General PB/tjw (1] Cf. s (8), Fla. Stat., defining "Slot machine" for purposes of Ch. 551, Fla. Stat., which authorizes slot machine gaming under certain conditions in Miami-Dade County or Broward County. [2] And see Op. Att'y Gen. Fla (1989), in which this office determined that a coin operated "crane game" having an unpredictable outcome or chance which is inherent in the machine qualifies as a slot machine or device within the meaning of Ch. 849, Fla. Stat. [3] 53 So. 2d 873, 874 (Fla. 1951). [4] 696 So. 2d 851 (Fla. 4th DCA 1997). [5] Section (1) (a)l. and (b), Fla. Stat. It should be noted that in order to qualify for the exemption afforded by s (1) (a), Fla. Stat., the machine must be able to accept coins, not merely currency. See Rowe v. County of Duval, 975 So. 2d 526 (Fla. 1st DCA 2008). [6] Section (2), Fla. Stat. (7] The statute refers to a truck stop, as defined in Ch. 336, Fla. Stat., and which operates a minimum of 6 functional diesel fuel pumps. [8] Cf. Op. Att'y Gen. Fla (1995) (mere pushing of a button marked "skill" does not appear to constitute the application of skill for purposes of the exemption ins , Fla. Stat.; rather, skill must be a factor with the player's superior knowledge and attention or superior strength, agility and practice as an element in the player's ability to win); Inf. Op. to Sen. James King, Jr., dated April 1, 2003 (whiles , Fla. Stat., requires that skill be a factor in determining whether the player is entitled to receive a prize, the outcome of the game be dependent solely on skill). Ultimately, however, the determination as to whether an amusement game involves the application of skill is a question of fact that cannot be resolved by this office. See, e.g., Op. Att'y Gen. Fla (1995); Inf. Op. to Gregory L. Coler, dated June 12, 2003, and Inf. Op. to Rep. Sandra L. Murman, dated October 6, [9] Sees , Fla. Stat., authorizing a charitable, nonprofit, or veterans' organization, as defined therein, to conduct 7/21/2011

21 Advisory Legal Opinion - Gambling, veterans' organizations Page 6 of 6 bingo games in which participants pay a sum of money for the use of one or more bingo cards and the numbers are drawn and announced, or instant bingo using tickets by which a player wins a prize by opening and removing a cover from the ticket to reveal a set of numbers, letters, objects, or patterns, some of which have been designated in advance as prize winners. But see Op. Att'y Gen. Fla (2008), stating that a machine or device comes within the scope of s , Fla. Stat., if that machine dispenses an instant bingo game ticket that may, dependent on the element of chance, entitle the recipient to a prize. [10] See s (1) (a), Fla. Stat., defining a drawing by chance as "an enterprise in which, from the entries submitted by the public to the organization conducting the drawing, one or more entries are selected by chance to win a prize." 7/21/2011

22 Internet Cafes -Strip Mall Casinos - Legal Issues Electronic Game Promotion - business sweepstakes F.S Has no "Safe Harbor" from other statutes Misdemeanor crime for: Requiring purchase, canceling a drawing, failing to award prizes, false or deceptive advertising Per DACS; File and use, no approval or permits issued. Electronic Raffle- non-profit 501 (c) organizations- for fund-raising F.S has a "Safe harbor'' from the Lottery Law- F.S , only. Skill-stop machines- skill arcades with 50 machines, or at truck-stops F.S Instant bingo- allowed only in authorized non-profit bingo operations. F.S (13). Exceeding strict limitations. Misdemeanor crime. F.S Gambling -Playing cards for money F.S Operation of a Lottery- F.S Possession of a Slot Machine F.S Operation of a place used for Gaming or Gambling Misdemeanor crime Felony crime. Misdemeanor crime. Felony crime. F.S Defines "Slot Machine" as" 1. Machine or Device, that 2. Is caused to operate by the insertion of 3. A piece of money, coin, or other object 4. Through chance or an outcome unpredictable to the player 5. The player is entitled to money or anything of value. "Even though it may"... "also deliver or present some merchandise, indication of weight, entertainment, or other thing of value." F.S (k)- "Nothing in this section the lottery law) shall prohibit participation in any nationally advertised contest, drawing, game, or puzzle of skill or chance for a prize... " F.S Whoever sets up, promotes or plays at any game of chance or lot, or with dice, cards, numbers, hazards or any other gambling device whatever for, or for the disposal of money or other things of value, or under the pretext of a sale, gift, delivery thereof... is guilty of Misdemeanor of the second degree. Attorney general: AGO and Phone card machine was illegal slot machine. AGO If no Skill used, or less than 50 machines, then not legal. AGO Crane Game was a slot machine. Eccles v. Stone, 183 So. 628 (1938) FSC approved the 1937 law making possession of a slot Machines not legal -even where there is no evidence of actual gambling. Barber v. Jefferson County Racing Association, 960 so.2d 599 (Ala 2006). Separation by wires of the component parts of a slot machine, does not make it legal. Allied Veterans of the World v. Seminole County, 2011 WL & (M.D. Fla. 2011) Denied Injunction for First amendment challenge to County regulatory ordinance