The Rise of Online Gambling in California

Posted By: Date: 10/28/2013 at 12:00 am Leave a comment

The past couple of years have seen a rise in the emergence of illegal casinos all over the United States. These illegal gambling operations have taken to operating under the guise of other businesses. Illegal internet sweepstakes cafes can pose as ordinary copy shops offering internet access, copy, and fax and printing services to customers. In reality, however, the owners are running casino games on computers where customers can bet and collect their winnings inside the shop. On July 10, three such places were raided in Carson, where hundreds of pieces of evidence were collected. The Daily Breeze reported on the recent crackdown on these internet gambling operations, included the arrest of one person under the suspicion of illegal slot machine possession.

What goes on Inside Internet Sweepstakes Cafes?

Customers of these sweepstakes cafes take part in gambling via computers by first buying cards typically used for internet access or phone calls. The casino games running on the computers require credits to be used as entries for the sweepstakes. After purchasing credits for entries, customers can earn sweepstakes credits by playing casino games such as computerized slot machines with animated images of characters spinning on wheels, narrowly resembling real-life ones. Winners can then exchange their “winnings” for real cash inside the premises.

The defense of the proponents of these online gambling shops involve the technicality of whether or not gambling is actually taking place inside their establishments. Winners in these internet sweepstakes are pre-determined by the computer once the customer buys a card and even before playing games. Since winners are pre-determined and chance is not involved, internet casino proponents argue that gambling does not in fact occur. Instead, they believe that games are of a similar vein with the legal promotional sweepstakes regularly employed by other businesses. Nonetheless, local state law enforcers still consider that the games played inside these establishments constitute gambling and are thus illegal.

Running computer casino games without a state license in California is illegal. Without a license, internet casino cafes generate income without having to pay taxes or licensing fees, and thus deter profits from the licensed casinos in the state. The standard regulations followed closely by the licensed casinos such as rules against underage gambling can be easily disregarded in these criminal internet casinos. In addition, the lack of background checks on owners also adds to the unsafe atmosphere inside these internet sweepstakes cafes.

Reports indicate that these illegal businesses generate an income of roughly $10 B, tax-free. This number, however, cannot be verified as the illegal gambling operators do not officially file revenue reports. Legal casinos, on the other hand, pay taxes and provide resources for the state budget, including education, health and development funds. Agreements with cities also ensure that casinos give a hefty amount to local services and programs.

Unless these illegal gambling operations can be shut down for good or be legalized so that they are forced to pay the proper taxes and licensing fees, the proliferation of these criminal businesses only lead to more and more loss of potential tax money for the local state.

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