Strip-Mall Casino Scandal

Tim Suereth

Internet Cafe Casinos Raided by FBI – Lt. Gov. Resigns in Disgrace

A recent FBI investigation, code-named Reveal The Deal, has revealed the seedy side of strip-mall casinos, and highlights the perils of unregulated gaming in Florida.

The stunning announcement on March 12th that Florida’s Lieutenant Governor, Jennifer Carroll, had resigned due to her close ties with an alleged organized crime ring that have been operating illegal strip-mall casinos under the guise of charitable sweepstakes, has persuaded the Florida Legislature to move fast to stop illegal gambling in the state and to formalize a regulatory framework for legalized Florida gaming.

Although Lt. Governor Carroll has not been officially charged, she resigned almost immediately after being questioned by the FBI her about her previous working relationship with Allied Veterans of the World, dating back to 2009 when she was a Florida Legislator and “paid consultant” for the company.

Tim Suereth

I never look at other people’s work. I can’t get sucked into that celebrity thing, because I think it’s just crass. Give me time and I’ll give you a revolution. I can’t get sucked into that celebrity thing, because I think it’s just crass.

I can design a collection in a day and I always do, cause I’ve always got a load of Italians on my back, moaning that it’s late. Sometimes the simplest things are the most profound.

Tim Suereth

Allied Veterans of the World has collected approximated $300 million over the past five years through their sweepstakes venture, but has donated only $6 million (2%) to charities. Seminole Sheriff Donald Eslinger affirmed that the the rest of the money “lined the pockets” of the Allied Veterans of the World executives, affiliates and creators of the gaming software program.

Miami Beach resident Joe Ferver stated, “I’m shocked at the enormous amount of money they’ve been raking in through these mini casinos. That money should have gone to our Veterans, or at least to some other charitable cause. To learn that these individuals took $294 million for themselves of money that was earmarked for charity makes my blood boil.”

Allied Veterans of the World has given over $1.4 million to Florida elected officials and political parties over the past 4 years, distributed among 175 political organizations and politicians.

The FBI raided 49 establishments in Florida across 23 counties that all had ties to Allied Veterans of the World. 57 people associated with the company were arrested and criminally charged with racketeering, money laundering, keeping a house of gambling, and possessing illegal slot machines.

Federal, state and local law enforcement agents have confiscated over $100 million from bank accounts connected to the group, in addition to over $580,000 in U.S. and Iraqi currency, 400 computers, 60 vehicles and boats, numerous luxury properties and more than 1,100 boxes of documents. The Jacksonville police department union president was also under investigation for assisting in the scheme. More than $50,000 in cash was confiscated from his premises, in addition to documents that law enforcement officers believe will help in the prosecution of the case.

Tim Suereth

Strip-mall casinos operate their games through computer terminals that look and operate like slot machines but actually connect players to the operators proprietary online gaming system that is controlled at a central location. A patron can purchase a time card that allows them a certain pre-determined amount of time to use the facilities computer terminal and access the internet and to play a computerized slot machine that has been developed to payout through a formula that only a few individuals are aware of, and kept highly confidential. The players card is pre-programmed to know what you’re going to win, or lose. The internet gaming companies can set the win-loss ratio however they desire, with no oversight.

“It’s a rip-off” says Miami resident Stanley Dolan. “Because we couldn’t get legitimate casinos in Florida we’re now stuck with these scammers who run their ‘for-profit’ business at the expense of real charities. They’re giving other reputable gaming companies and non-profit organizations a bad reputation. It’s the wild west of gaming right here in Florida. I can’t believe it has been allowed to go on for so long. The machines that are being used in the strip mall casinos are not regulated by anyone. It’s outrageous.”

If a customer wins a jackpot, he or she can redeem the card in exchange for cash, computer time, gift cards or other inducements. The payouts are usually kept to under $5,000 since payouts of $5,000 or more come under the regulation of the Florida Department of Agriculture and Consumer Services. There in currently no regulatory agency within Florida that has the ability to test the sweepstakes machines or software for malicious coding or manipulations that might have been designed to cheat the customer.

“These strip-mall casinos are a major threat to Florida’s quality of life, and the Florida House rightfully stood up to prohibit them,” said David Hart, a lobbyist for the Florida Chamber of Commerce.

State of Florida officials have estimated that $1 billion in revenues have been collected by the strip-mall casino operators over the past 4 years, with no tax revenues being collected by the state. $350 million would have gone towards child education if that same $1 billion would have been spent on the Florida lottery.

In a rush to stamp-out the strip-mall casino corruption, the Florida Legislature is fast-tracking their approval of HB 155 and SB 1030 – the Prohibition of Electronic Gaming Devices Bills, in an effort to shut down the strip-mall casinos permanently.

The banks have also entered the Strip-mall casino battle by canceling the bank accounts of businesses who operate storefront mini casino’s. Across America, banks are sending out “breakup letters” to explain to the strip-mall casinos that their banking accounts are being closed, and for the companies to remove their money from the bank, usually within 30 days.

If the Bills pass both the House of Representative and the Senate, they will put an end to strip-mall casinos in Florida by eliminating the loophole in the State Constitution that allows the electronic sweepstakes to operate. The new regulations would ban electronic gaming devices for all organizations, including charities. The House has already passed their version of the Bill and the Senate is expected to approve their version before the 2013 session is over. Illegal one arm bandits won’t be picking the pockets of our elderly, anymore.

The Florida Legislature missed their opportunity to regulate gaming last year when politicians and power-brokers put-up roadblocks to the Destination Resort proposal. They are now suffering the consequences of their inaction – in the form of more political corruption tied to organized crime, more crime connected to gaming, less money for charities and child education and less tax revenues for Floridians. There was a better plan that would have regulated gaming operators and electronic slot machines, provided jobs, produced revenues and strengthened Florida’s gaming laws and economy – It was the Destination Resorts Bill, but it is now just a lost opportunity. Viva Las Vegas.