Modesto, California is the latest place where state police have cracked down on an Internet café and confiscated computers and a cash total of over $7,000 US. There were a total of twelve people arrested and 67 computers taken as evidence at two business locations. This was all because the businesses were offering illegal online gaming activities and more, which at this time are against the law in California.
The Internet Cafes were located right in the city center both on McHenry Avenue. Both these stores looked legitimate from the streets, offering a multitude of regular services such as faxing, copying, printing, emailing and word processing in addition to the Internet services. But after a two-month investigation by California police, they finally broke up the gambling organization. It wasn’t too hard to figure out for the police as by the sounds of it, the Café’s made it easy for them to figure out with all the activities outside of gaming.
Apparently, there were numerous complaints from people close to the stores who acknowledged that there was lots of illegal activities going on there including public intoxication, fighting and gang related activities on the premises. Sounds like it was turning into quite an interesting place as police describe it, “Said police spokesman Lt. Rick Applegate, there was drug use in the parking lot, sex acts in the parking lot, and prostitution.” Not only that but people would be using heavy drugs in plain view and the scene was getting down right ugly over time.
The good news is that only three of the people caught were actually arrested and charged with illegal gambling, while the rest of them were charged with drug possession. So it seems like the worst of it was the illegal drug possession and public display of indecency.
Currently, California is now on the track to finally legalize online gaming in the not to distant future. Just last February State Senator Lou Correa introduced Senate Bill 678, the Authorization and Regulation of Internet Poker and Consumer Protection Act of 2013. The bill is looking to legalize online poker and for the California Gambling Commission to put together a solid framework for poker site licensing and the sites rules of operation. This would mean that companies would now be able to obtain online gaming licenses in one of the largest states in the union. California’s population dwarfs that of both Nevada and New Jersey with a total of almost 40 million people.
One other bill currently in the state legislature is Senator Roderick Wright’s SB 51, the Internet Gambling Consumer Protection and Public-Private Partnership Act of 2013. Even though California’s past attempts to legalize online gaming has failed over the years, now that other states have got licensing into action, maybe now is the time to finally pass both these bills and prepare the state as a legal gaming jurisdiction. Then it would also be able to develop compacts with other states such as Nevada and New Jersey to increase critical mass for the online poker operators.
Make no mistake about it, if any company wants a legitimate online gaming license in California, it won’t come cheap. Just consider how much the state needs tax dollars, plus the population count and that adds up to a pretty hefty licensing fee and steep tax share for the government there. One of the proposals on the floor is to charge operators an up-front fee of $30 Million for 5 years, which is renewable and the state would further take 10% off the companies revenue.
By the looks of it, the state lottery hasn’t quite delivered the tax dollars and another revenue stream is needed. The California Lottery, which was supposed to deliver a handsome windfall for schools, has flat-lined at about $1.3 billion a year in state revenue, meanwhile horse racing revenue has also fallen short of projections.
One other major contention is the Indian Tribes in the state. They right now have a hold on the land based gaming monopoly and they would surely want to have their say in how the legislation is passed so they could get their cut and approval to run their own sites too.
So it looks like the California bill could take a while to pass once all the arguments and debates are finished. Until then, there will surely be some more Internet cafes under fire for offering illegal online gaming and everything else that underground world attracts; everything besides good old tax dollar revenue that is.