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While the Planning and Zoning Board awaits legal advice on whether to allow a cyber café to open in the town, a case pending in the Alabama Supreme Court will eventually decide the operation’s legality – but not before the issue returns to the board.
The board tabled a request by Don Varnum of Riverside for a business license for 30 days for a cyber café, similar to another business he owns in Oxford in conjunction with his restaurant, Zack’s Mesquite Grill, so they could consult with the town’s attorney.
The business gives free sweepstakes cards to customers as they walk in the door.
Varnum said customers can scan the card once a day to see if they’ve won cash. He said payouts vary from the usual few dollars to as much as $1,063, the highest payout he’s known at the business.
After patrons scan their cards, they can buy time on the Internet for about 5 cents a minute, which they can use for any Internet task – paying bills, checking the stock market or their e-mail, or playing on online gaming sites. Varnum said most of his customers play the gaming sites.
Varnum said he has no doubt the business is legal, albeit controversial.
“I’ve never been one to be scared of controversy,” he said. “Now illegal – yeah, I’m scared of that. I like to pride myself on my reputation of being straight-up. I wouldn’t jeopardize my business for something if it was illegal.”
Varnum said he thinks all the hubbub is because of confusion over his operation and other operations prosecuted in the past that used slot machines. He said he’s seen operations with altered slot machines whose operations were different from his and undoubtedly illegal.
St. Clair County District Attorney Richard Minor said he can’t comment on Varnum’s business, because he hasn’t seen it and doesn’t give legal advice to businesses wanting to locate in his district. But Minor said if it resembles Birmingham Race Course’s operations, he could run into legal trouble in St. Clair County.
The Circuit Court of Jefferson County ruled in favor of the race course after authorities began seizing machines they felt were in violation of Alabama’s anti-lottery and –gambling statutes. The court ordered the machines to be replaced, saying the operation was legal under state sweepstakes laws.
Jefferson County District Attorney David Barber appealed the case, which is currently in the process to be reviewed by the Alabama Supreme Court. The appellant – Barber – has already submitted his brief, and the race course is due to submit its response by the end of the week.
The circuit court ruling is the only current precedent on the case, and it is only valid in the Jefferson County circuit, meaning until the Supreme Court rules on the case, St. Clair County authorities must treat the issue as they interpret state law.
Varnum said he has visited the operations in question at the Birmingham Race Course, and with the exception of cabinets for computer access, he operates his business the same way.
Minor said, in his opinion, the race course operation is illegal. He said it meets the definition of a lottery under state statute because it awards prizes based upon chance for consideration.
Minor said the Birmingham operation was “for consideration” because people were paying for the chance to gamble – not for Internet access. The circuit court ruled the case was not for consideration and did not violate state laws against lotteries.
Minor agrees with Barber’s appeal that the operation in Birmingham promotes gambling and uses gambling equipment.
Minor said the payoffs of the sweepstakes are about 92 percent – far greater than chances of sweepstakes and exactly the same required of slot machines in legal gambling states.
Minor said sweepstakes are for a limited time, while the operations are ongoing. He said few people go into the businesses to access the internet.
Varnum contests his sweepstakes are no different than any promotion done at fast food restaurants such as Sonic, which is currently holding a promotion in which customers can win free food if they unwrap a straw with yellow or blue stripes. Customers unwrapping a straw with a pink stripe win a trip to Las Vegas and are entered in a drawing for more than $168,000.
Minor contends the difference between fast-food sweepstakes and Birmingham’s operations is that people at Sonic are getting a good – the food – and aren’t paying just for the chance at the money.
Minor said he can’t pick and choose which laws to enforce and any changes to how he prosecutes illegal gambling operations would have to come from Montgomery.
“That’s a legislative issue,” he said. “But now it’s left up to the courts.”
Even if the Supreme Court rules against the race track, Minor said he has no doubt people would still find a way around the law.
“If the court rules it’s a lottery and some attorney reads it, he’ll come up with a plan B and we’ll be right back where we started,” Minor said.
Minor said it’s been about two years since the county prosecuted an illegal gambling operation. All the operations he’s prosecuted in the past used slot machines – not personal computers.
Varnum said he doesn’t understand all the hubbub over a sweepstakes and an Internet café.
“How can something be legal here in Oxford and 22 miles down the road in Riverside – in the same state – they’re questioning the legality of it?” he said. “Do they think we’re stupid enough to apply for a business license for an illegal business?”
Varnum said he’s never had law enforcement officials inspect his business in Oxford and is confident they would find nothing afoul of the law.
“I don’t believe I’ve ever had any police in here before,” he said. “And they could come anytime; I’d be glad for them to do so.”
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