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Loophole? What Loophole?

Play for pay. Legally?
Colby Katz

"Financially," Ann insists, "I'm about even. I'm not a greedy person. I'm smart. If I get a hit that gets me 15 or 20 dollars, I take it."

"Sure," Nancy agrees.

"Not like this woman I saw the other day with $72 in the machine. So I said, 'Aren't you going to take that?' And she says, 'No.' I said, 'No?!' Then I see she's playing $2 a shot. She went right through that $72 and kept feeding the machine."

Nancy tops that: "You know the woman who's always there with the big, blond, thick hair?" she says. "She's there all the time, you know? Well, she says she spends $500 a day there. She says she's about $100 a day ahead."

Ethel shakes her head.

"What are you talking about?" a lady's yelling. "Are you talking about the Indians?"

No, the ladies are not. They're not talking about the Seminole Casinos or even the cruises to nowhere: the two last bastions of legal gambling in Florida. For the next 20 minutes, as canasta players slowly fill up the Cypress Bend Retirement Community Game Room, Ann, Nancy, and Ethel, the oldest at 87, describe the latest fashion among Broward retirees: adult amusement centers. With a permanent-twilight lighting scheme and the cacophony of buzzers and bells, these establishments offer their patrons Vegas-style nights during lethargic Florida days -- precisely the experience that Floridians have continued to vote against legalizing. These casinos, euphemistically called "adult arcades," are big business in Broward County. Instead of cold hard cash, their slots pay off in coupons for use at Wal-Mart and Publix. These elderly women have already taken note, carpooling there three, four days a week. County authorities, however, have not.

"Oh, and they're opening a third one," Nancy announces as the canasta game gets under way. "That makes three in just a quarter mile."

"That's great," Ann replies, collecting her dominoes. "You see, for us seniors that have to sit around and watch stupid television all day, this is perfect. We're widows. We don't have a man to play with or talk to, so we go to there. We go there for fun."

Fun? Possibly. But nearing 2 a.m. at Pompano's Treasure Island, it doesn't look like the guy at the "Queen Bee" slot machine is having any. There are four rows of slots in the room, about 60 in all, and at the moment, he's one of four people still trying his luck. He's not blinking much, and the only sign of life is his right hand, feeding the machine $5 bills. Occasionally, he sips a Diet Coke. His screen shows he's played 2,322 games. At 10 cents a spin, he's lost more than $200. Luckily, Treasure Island doesn't close until 5 am, so there's time to make a comeback.

Adult arcade owners, like Treasure Island's Jean Fradette, will tell you that this form of entertainment -- which can bring in $30,000 a week -- is definitely legal. They don't call their establishments "casinos," despite the familiar d├ęcor. They don't call their machines "slots" either. They're "adult amusement machines" or "redemption machines," a term that gives the enterprise an appropriate religious undertone. In fact, Fradette sees himself as a do-gooder who happens to make a little money with his acts of kindness. "People come in and tell me, 'You saved my life,'" he says. "They were spending an obscene amount of money at the casinos, and they can come here and play all day and not spend very much money at all. For $100, you could play all day, if you want."

Although Fradette himself refers to his business as a "little form of gambling," he insists that technically it's not. "It's entertainment," he says emphatically. He points to a large red sign that hangs on his wall, with the title "Florida Amusement Machine Center (Florida Statute)."

It reads: "Amusement machines operate by means of the insertion of coins/dollars which by the application of skill may entitle the person playing the machine to receive points or coupons/tickets which may be exchanged for merchandise only, excluding cash or alcoholic beverages, provided the value of the merchandise in exchange for such points or coupons does not exceed 75 cents."

In certain circles, Statute 849.161, a 1996 amendment to the state gambling law, is called the "Chuck E. Cheese exception." It passed primarily so places with the Whack-a-Mole-like games that kids play for teddy bear prizes could stay open. Of course, it didn't take long for an adult to learn how to manipulate the law. The typical casino slot, the "8 Liner," has 8 rows of spinning images -- like fruits, animals, and numbers -- that stop automatically. The player has no control, and there is no suggestion that it's a game of chance. "We have none of those," Fradette repeats. But he does have equivalent machines, with an added "skill-stop" feature. Now the player can push a button and stop, one by one, each row, which rolls down to a number or figure. Proprietors of these machines argue this puts the player in control, making these games of "skill," which are perfectly legal.

That was the birth of the loophole: the casino turned "adult amusement center." The loophole had been discovered before, of course. According to Phil McBride, president of the Florida Amusement Machine Association, a trade association representing slot machine operators, South Carolina experienced a boom in adult arcades in the late '90s as a result of a similar statute. Eventually, however, the state started shutting them down. In turn, the machines found their way into Georgia, which also found ways to confiscate them. "They were legal in Georgia," McBride explains, "until these assholes started stealing the money by putting in a hundred machines in one place. Those places looked like casinos." There were more than 30,000 such machines in Georgia, he asserts, and they had to go somewhere.

Over the past decade, McBride says, the machines migrated south, chasing loophole legislation from Georgia to Alabama to Texas (where it's called "the fuzzy animal law"). "You got these whores who don't care how long they're there," McBride says of the greediest adult amusement center owners. "They put these places up, take the money, and leave." About two and half years ago, Texas game operators did just that, leaving Texas for North Florida.

Only recently have Tampa and Sarasota started shutting down these arcades and arresting owners for operating illegal gambling houses. This may very well explain their rise in South Florida over the past six months.

But what about that loophole? Under the Chuck E. Cheese exception, what looks like gambling, sounds like gambling, even feels like gambling -- much to the dismay of Pat Fowler, executive director of the Florida Council on Compulsive Gambling, who says her helpline fields calls from adult arcade addicts -- is, legally speaking, not gambling.

"There's a very fine line between adult gaming and gambling," contends Carol, who manages Treasure Island during the lunch shift. "A very, very fine line."

So fine, in fact, that it doesn't exist.

Cpl. Brian Beery of the Pinellas County Sheriff's Office, an expert for the state on video slot machines, clarifies the ambiguity of the law. "It's law enforcement's opinion that these machines are illegal," he states unequivocally. "They're not games of skill. These machines are programmed to win or lose a certain amount of times. That makes them games of chance, and that is illegal." There are other ways the machines violate the law, Beery adds. For example, they record the number of plays, and they accept dollar bills when they technically must be coin-operated.

"Of course these machines are games of chance," argues Bob Jarvis, professor of Gaming Law at Nova Southeastern University and author of the aptly titled casebook Gambling Law. "Of course it's gambling. That's obvious."

Then how does Treasure Island not only stay open for business but expand to the shop next door? How could Rio, directly across the street from Treasure Island, open recently? "It's not up to me," Beery explains. "It's up to each jurisdiction to make arrests. If they want to, they can." Beery recalls seven or eight arrests that have been made this year up north, a surprisingly insignificant number. Still, if Tampa's done something about it, why hasn't Broward? Hugh Graf, spokesman for the Broward Sheriff's Office, has one possible answer: "Well," he says, "I'm not familiar at all with these things you're talking about."

Although Broward's own town of Davie passed a moratorium in February on licenses for adult arcades, Graf isn't the only one in the dark. No one, not even the major corporations that are indirectly sponsoring these gambling houses, is aware of what's going on. One would think that Publix, Home Depot, and especially that juggernaut of self-righteousness, Wal-Mart, would have something to say about their brands' becoming the new currency of the noncasino. But they haven't. No one, apparently, knows anything.

"It's not our policy to sell coupons to gaming houses," says Publix's Miami spokeswoman, Maria Rodamis. Policy or not, of all these corporations, Publix's involvement with this fad is especially problematic. According to Rodamis, unlike the other stores, which have moved to fully automated, credit card-like gift certificates, redeemable with merchandise or store credit, Publix offers cash back for their coupons. That way, a $20 gift certificate is easily converted into a pack of gum and $19.50 in real-life cash. Until Publix changes this policy (it has no plans to do so, Rodamis says), those coupons are as good as the money Ann and Nancy gamble with.

Truth be told, even if BSO lets the iron fist fall, it may not make much of a difference. Phil McBride, recognizing this, says he has even toyed with the idea of opening his own adult arcade. "I'm just leery about them changing the law," he says, "although even if they shut me down, I guess I could make up the money in six months." Cpl. Beery would tell McBride that, to put him out of business, the state wouldn't need to pass new legislation. But Beery would agree that, because of their portability, these businesses are almost foolproof. "They'll keep popping up here and there," Beery contends. "You can make money so quickly that it doesn't matter to these people if they're shut down." Gambling operations like Treasure Island can pull in $30,000 a week, he adds.

So Beery says he's seen people spend an entire month's paycheck in one day. But you don't need a policeman to tell you that.

Treasure Island, 3 a.m.: Muriel, the night-shift lady, is there with the guy who walks players to their cars after dark. He's a big guy, and he says he's worked at other adult arcades. Treasure Island is definitely the classiest, he says. Then he excuses himself to escort a woman out. Then you spot the guy who was here last week, one of two people left. His eyes are still unblinking. Occasionally, he sips his Diet Coke. His screen shows that he's played 2,702 games. This time around, though, he's betting a quarter a shot.


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