Council seeking ordinance to crack down on “sweepstakes”
By BRITTANY FHOLER
Sgt. Steve O’Neal with the Copperas Cove Police Department spoke about a problem with gaming in town during the Copperas Cove City Council Workshop meeting Tuesday evening.
He wasn’t referring to Dungeons and Dragons or Magic cards, but rather where gambling is occurring, he said.
“What we’re seeing in Texas is a great proliferation that’s starting to really swell up and currently in Copperas Cove there is a multitude of these gaming establishments that we’re looking into,” O’Neal said.
He listed six currently operating in Cove: Gold Rush; KG’s Amusement Center; the Parlor at Five Hills; Cyber Café Charity Sweepstakes, Surf N Sip Internet Café, Veteran Charity Sweepstakes and the newest one Shamrock Sweepstakes. He said he was also told about Lucky’s Cove, which is located on S F.M. 116.
These establishments don’t have gambling in their name, nor do they have a traditional 8-liner machine, typically found in a casino or gambling hall, he said. Instead, they have Sweepstakes in their name or description and they have computers, with some operating as computer cafes where people can buy computer or internet time. In these types of establishments, customers have the option to play games and possibly win off of the games, O’Neal said.
The establishments have gotten smarter, but it is essentially gambling, O’Neal said.
According to Texas law - TPC 47.01-(4) - a “gambling device” refers to any electronic, electromechanical or mechanical contrivance that affords the player an opportunity to obtain anything of value, for a consideration, where the award of the value is determined solely or partially by chance, even though accompanied by some skill, whether or not the prize is automatically paid by the contrivance.
This includes but is not limited to, gambling device versions of bingo, keno, blackjack, lottery, roulette, video poker or similar games that operate by chance or partially so, that award credits or free games as a result of playing and that record the number of free games or credits awarded as well as the cancellation or removal of the free games or credits.
This doesn’t include any devices made solely for amusement purposes that reward players with noncash merchandise prizes, toys or novelties. The item won cannot be worth more than 10 times the amount of a single play or $5, whichever is less.
This part of the law covers claw machine games or ski ball games found in arcades, where players spend money to play and earn tickets for prizes. If someone spends 50 cents on a claw game, the prize they try to retrieve can’t cost more than $5, O’Neal said.
This noncash prize exclusion is where these businesses are trying to skirt the law, by handing out gift cards to stores such as Lowe’s or Wal-Mart, O’Neal said. An Appeals Court in Texas affirmed convictions relating to sweepstakes parlor establishments and ruled that a gift card is considered a gift of remuneration, a gift of money, with a cash value and therefore counts as gambling, O’Neal said.
O’Neal showed a list of several locations across the state that had been raided in 2016, in Houston, South Texas and in the Midland area, with millions of dollars seized, dozens arrested and in one location, law enforcement found guns, ammo and body armor on the location.
O’Neal explained the types of problems that these type of establishments can bring with them, such as crime or attracting gambling addicts. O’Neal cited a 2006 California Prevalance Survey that stated that people who go to these places are three to three and a half times more likely to be arrested and two to seven times more likely to smoke, binge drink or take illegal drugs. Each problem gambler affects the lives of seven to eight other people, according to O’Neal’s slideshow.
The impact the establishments have on crime is an increase in aggravated robberies, thefts, burglaries, property damage, narcotics as well as other things not reported, O’Neal said.
Gold Rush sweepstakes, on S. 2nd St, had two incidents with burglary and theft in March, with over $7,000 stolen.
During a time of discussion and questions from council members, George Duncan shared his own experience with crime related to an internet café/sweepstakes parlor.
Duncan, who owns the retail space that the Leader-Press’ office is located in on E. Business 190, shared that in 2016 he rented space to an internet café, called The Jackpot, and that is now closed down.
Within four months, his retail space went from “a quiet, docile, wonderful little environment” to one where there were three burglaries, a “strong arm” robbery and at least seven 911 calls, many of which were for narcotics incidents, Duncan said. He eventually went through an eviction process, he said.
Since the closing of The Jackpot, two neighboring retail spaces have a sweepstakes parlor/Internet café, with the Cyber Café and the Shamrock Sweepstakes Gameroom.
Copperas Cove does not currently have any ordinances pertaining to these types of establishments, according to O’Neal. The ordinances the city does have define establishments such as pool rooms, game rooms or domino halls as well as fees and exemptions and the licensing connected. For a game room with eight-liners, the fee is $2,000. O’Neal shared that he was informed by someone from the city that a fee of that amount had not been collected “in forever”- something he later discovered was due to the Texas Occupation Code, under 2153 451, that says the city is allowed to collect a fee not more than 25% of state tax rate; the state tax rate is $60, which would put that maximum fee at $15, O’Neal said.
O’Neal shared examples of what other cities, like Austin, have done with their ordinances, such as requiring the windows to be transparent and uncovered and allowing law enforcement to be able to enter the business and inspect it.
Some locations in Copperas Cove such as the Parlor at Five Hills have mirrored windows or blacked out windows or windows with coverings, making it difficult to see inside from the outside. Other locations are rumored to keep their entry doors locked, with only certain people allowed entry, O’Neal said.
O’Neal explained that the ordinances that the city does have seem to be geared towards arcades or pool halls and game rooms of that nature. Developing ordinances for these establishments could “allow for more clarity making enforcement less challenging and create the same standard for all gaming businesses,” according to O’Neal’s slideshow. It would also allow for more consistency with permits and licensing requirements. Revamping the game room/pool hall ordinances to cover sweepstakes establishments would be greatly beneficial, O’Neal said. Starting as small as requiring transparent windows and a sign identifying the establishment as a game room, both requirements in Austin, would help, he said.
“I think things of that nature just to kind of get us started in the right direction as far as letting these types of businesses know that if they are not operating above board, we’re not going to allow it and this is how we’re going to do it,” O’Neal said. “You’re going to do these things a certain way and that’s it.”
Some cities, such as Lacy Lakeview, have shut down the parlors, O’Neal said, when asked by council member Dan Yancey about other city’s ordinances.
“I don’t believe they established any kind of an ordinance to allow them to operate because I think the way they’re looking at it particularly there is a business such as that where they’re coming in and playing gaming online in that manner, they’re not there for legitimate reasons, and so they just kind of shut them down.”
Duncan asked about the option of evicting such establishments, which he said can cause neighboring businesses and residents to suffer. He mentioned the numerous questions and complaints he’s gotten about the establishments and the lack of a way to really respond.
If it’s illegal, what can be done about the establishments, Duncan asked.
O’Neal shared the main problem with convicting the people who open and run the illegitimate gambling rooms was county prosecutors not wanting to take on the cases due to loopholes that would make it difficult to prosecute offenders.
Keeping an illegal gambling place is a misdemeanor offense and would fall under county jurisdiction. However, if there is organized criminal activity or something else that would classify as a felony, the District Attorney, Dusty Boyd, would be the prosecutor, O’Neal said.
Duncan asked city manager Andrea Gardner if the council could do anything to make the establishments leave town. Gardner suggested that O’Neal’s suggestion of making minor changes to ordinances could have major impact. She asked for Mayor Frank Seffrood and council members to allow the police department to come up with an ordinance that would allow law enforcement “to do what they need to do in terms of making it unattractive for these businesses to be in our community.”