TALLAHASSEE, Florida (Reuters) - Florida Governor Rick Scott signed a law on Wednesday aimed at closing hundreds of storefront online gambling operations known as “Internet cafes” across the state.
The online poker and slots operations were at the center of a three-year federal investigation that culminated last month with 57 arrests on money-laundering and racketeering charges.
The investigation prompted the resignation of Lieutenant Governor Jennifer Carroll over her public relations company’s work for a non-profit organization, Allied Veterans of the World.
Allied was accused of reaping about $300 million in revenue from gambling centers operating under the guise of Internet cafes, and sharing only about 2 percent of it with veterans.
Carroll was questioned by the Florida Department of Law Enforcement but not charged in the case.
The new statute allows games of skill, not chance, and limits prizes to 75 cents per win, but supporters of the “adult arcade” businesses, popular with retirees in many towns, have said the law wipes out about 14,000 jobs at some 1,000 businesses.
“I think the House and Senate did the right thing to crack down on illegal gaming, especially in light of the Allied Veterans multi-state conspiracy,” the governor told reporters.
Legislators raced the new online gambling bill through after the arrests and Carroll’s resignation. One House member and four senators, all from populous southeast Florida where the adult arcades are popular, voted against it.
The Internet cafes operated under an ambiguity in Florida law allowing companies to offer sweepstakes as a promotion for selling another product, such as phone cards and Internet time that can be used as patrons see fit.
There is no longer a federal prohibition against all Internet gambling.
The U.S. Justice Department in 2011 cleared the way for U.S. states to legalize Internet poker and certain other online betting after previously holding that all online gambling was illegal under a 1961 telecommunications law.
The department concluded that the law had been aimed at halting wire communications for sports gambling, notably off-track betting on horse races.
Reporting by Bill Cotterell; Editing by David Adams and Tim Dobbyn