A three year long probe of internet gambling cafes has led Florida's Lt. Governor, Jennifer Carroll to resign. The probe also led to 57 arrest warrants and 49 arrests on Thursday. According to a March 13 article in the Tampa Bay Times, 49 Internet gambling center owners or operators were arrested for dealing with a nonprofit organization called Allied Veterans of the World.
Investigators from the IRS, Secret Service and local law enforcement conducted the probe called "Operation Reveal the Deal" and filed a 130-page search warrant on Monday.
According to a March 13 article in the Miami Herald, Internet gambling cafes, or charity sweepstakes cafes, operate out of physical storefronts and look like mini casinos. Customers buy a prepaid card to play a “sweepstakes” game on a computer. The computer games look and feel like casino slot machines. Winners add their winnings to their prepaid cards and cash out at a cashier's cage.
Allied Veterans of the World is a nonprofit organization that legally registered itself as a 501(c)(3) nonprofit organization. The group promised to use the sweepstakes games to raise money for military veterans and first-responder groups in the United States. Instead, Allied Veterans took in $290 million in proceeds between 2007 and 2012, but only distributed $6 million to any charities.
Lt. Governor Carroll, a Republican, resigned because of her past associations with the Allied Veterans group. Her public relations firm did work for the organization 2009 to 2010, when she was a member of the Florida House of Representatives. She also promoted the group in a television ad. She introduced a failed state law that would have legalized the internet cafe gambling operations, since they fell into a "gray area" of the law.
According to a March 14 news report by Tampa Bay Channel 10 News, "About 50 of the company's [Allied Veterans] Internet cafes in Florida generated nearly $300 million over the past four years, but authorities say less than two percent of the cash went to charity."
The Florida House and Senate have been working on legislation to ban internet cafes in Florida and "Operation Reveal the Deal" should help.