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Tuesday, April 20, 2010

Undercover cops were winners at Roanoke County Internet cafes, warrants say

Search warrants filed Monday revealed a little more about the businesses that sprang up around the area.

The investigators who last week raided four Roanoke County Internet cafes alleged to harbor illegal gambling hauled away cash and computers -- and a pot of winnings from undercover gaming that officers used to build their case, said search warrants filed Monday.

The warrants also shed a bit more light on the goings-on at businesses that apparently described themselves as offering customers a chance to get online or to get rich quick through an array of casinolike computer games that simulated slot machines, poker and more.

Some variation of gambling or gamblinglike activity was going on at Bennett's Internet in the 3300 block of Brambleton Avenue, Connected Inc. in the 5900 block of Williamson Road and SLG Internet Cafe in the 5500 block of Williamson Road, warrants said. Similar activities occurred at a business that a warrant said was known by its address, 3112 Peters Creek Road -- although county business records give an address in the next block of Peters Creek for apparently the same establishment. Officers took away a total of $22,580 in cash, 126 computers and more.

Lt. Chuck Mason of the Roanoke County Police Department said Monday that the investigation is continuing and that many of the seized computers are being sent to the Federal Bureau of Investigation's facility at Quantico, for study. Charges are unlikely anytime soon, Mason said.

If the cases do get to court, what's likely to be in dispute is whether the computer gaming violated Virginia's anti-gambling laws, as several Virginia prosecutors have concluded, or if it was just an innocent, enjoyable ploy to attract customers.

It's not a new argument to Ronnie Bennett, the Pilot Mountain, N.C., resident whose Brambleton Avenue business lost 42 computers, $11,481 in cash and assorted equipment and records in Thursday's police visit. Bennett said he also had legal trouble several years ago when he began opening similar businesses in North Carolina, but that eventually a judge there told him, "there's nothing illegal, it's just one of the cleverest marketing ideas he's ever seen."

At Bennett's Internet, customers paid $6 per hour of online access, and got a card that enabled them to play 18 casino-style games until the points on the card ran out, or until the customer bought more Internet time and got more points. A variety of cash prizes, up to $3,000, could be won. Bennett explained that winners and losers were determined in advance and that no matter how a computer game was played, the outcome would match whatever was on the card the customer had been given. So in a game of online poker, for example, a customer could throw away a full house and still win if they had a winning card, Bennett said.

Bennett said his games were actually sweepstakes and likened the arrangement to promotions offered by national companies such as McDonald's or Coca-Cola.

Roanoke Commonwealth's Attorney Donald Caldwell said he studied Bennett's business after it opened in the city last year and determined it violates Virginia law. Caldwell said he would have charged Bennett if his business hadn't moved to the county after Roanoke police raided him and held his computers for a time.

Danville Assistant Commonwealth's Attorney Coleman Adams handled the most recent of three cases his office brought against operations similar to those raided in Roanoke County. Adams' case ended with a misdemeanor conviction against the business owner. One of the earlier cases ended in an acquittal, the other in charges being dropped.

Adams said that while the law sets out three elements for illegal gambling -- that a player has to pay to play, that there's an element of chance in the outcome, and that there's a prize for winning -- new methods can make it harder to see what's going on.

"Gambling is very old. Anytime technology is involved, you always have to try to apply the law to it. And that always presents certain challenges. That's just the nature of technological advances," Adams said.

Virginia's General Assembly is expected to approve legislation at its veto session this week that doesn't change anti-gambling statutes, but may add some clarity to their application, the bill's sponsor, Del. Clifford Athey, R-Front Royal, said Friday. But the new bill targets "free spin machines," another variation of the buy-a-product-take-a-chance model, rather than the online access/computer gaming operations in Roanoke County, Athey said.

"We've tried to put it in the broadest way we can put it, but I'm not going to say some creative person isn't going to find a way around it," Athey said.

University of Virginia business professor Rajkumar Venkatesan, who teaches marketing, laughed when told of Bennett's description of his computer games. Offering customers a chance in some sort of game to attract them to your business is a ploy with a long and successful history, he said.

But casino-style games seemed inherently different from offering, say, a chance to win a coupon for free groceries, Venkatesan said.

"The mechanics of it is raffles," he said of Bennett's games. "But what the raffle is for ... that's the question."

According to the search warrants, detectives began visiting the four Roanoke County businesses last fall to play the games offered there. The warrants detailed spending of $180 and winnings of $341.

But one warrant also contained this entry: "entered the establishment and played games on the following dates losing various amounts of money: 01/26/2010, 02/04/2010, 02/16/2010, and 02/22/2010."

The warrant didn't say whether this offset the officers' other wins.

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