VERO BEACH, Fla. - nonprofit BEACH — A Treasure Coast storefront "Internet cafe" operated by a group that says it is raising money for veterans is nothing more than a location for "convenience gambling," according to a spokesman for the Florida Council on Compulsive Gambling.
Allied Veterans operates Internet cafes at 39 sites around the state, including a location in Vero Beach. Despite the organization donating more than $2.8 million to veteran and other causes, authorities in Pinellas, Jackson, Marion and Seminole counties have sought to shut down its operations and accused the group of illegal gambling.
Two bills pending in the state Legislature also would shut down Allied Veterans in Florida and all forms of electronic sweepstakes game.
But Jerry Bass, national commander of Allied Veterans of the World and Affiliates, Inc., a St. Augustine-based organization, said his group just runs a sweepstakes similar to those run by McDonald's and other businesses in the state.
The Internet cafes sell Internet time to people who come in, Bass said. Customers are given a sweepstakes number. After signing a statement that they understand they are not gambling, they then can check on one of the computer terminals to see if they have won. They can also play games, which can win them cash.
Allied is a 501c19 group, a type of nonrofit organization that's membership must be at least 90 percent veterans or families of veterans. Members of the group can't benefit from it.
Allied is just one organization to offer the electronic sweepstakes game. The Council on Compulsive Gambling estimates there are between 500 and 600 such operations in the state. The centers have mushroomed since Allied opened its sites about five years ago, said State Rep. Scott Plakon, R-Sanford.
Plakon has introduced House Bill 217 to close the loophole in Florida law that allows the cafes to operate, and to put Allied and other organizations out of the sweepstakes business. A hearing on the measure is set for Tuesday in Tallahassee. A companion bill in the senate, SB 576, has not been scheduled for debate.
"My bill is anti-Internet casino gambling," Plakon said. "It deals only with Internet cafe sweepstakes and nothing else. It will not affect McDonald's or any bingo games run by veterans' posts and churches."
Plakon said he and his wife visited an Internet cafe in Seminole County. He said with computers displaying slot machine-style images, it looked like gambling.
"What really alarmed me is that this site had an ATM machine, which would accept the cards the state issues to welfare cases," Plakon said.
Brian Kongvik, spokesman for the Council on Compulsive Gambling, said the storefront Internet cafes and other such operations, are just "convenience gambling." He said the cafes by any name are changing the demographics of gamblers in Florida.
"The operations are in storefront locations where people who might not ordinarily visit a casino, can just walk right in," Kongvik said.
"We are seeing people with the same types of problems we get from the pari-mutual operations, Indian casinos and so on," Kongvik said. "The only difference is those other operations give out our telephone number where any of their clients with problems can call us. Allied does not because they say they are not gambling."
Tim Riney, a Vietnam-era veteran of the 172d Infantry and a customer at Allied Veterans Affiliate #65 in the Majestic Plaza on 14th Place in Vero, said he thinks Allied is a good thing and should not be put out of business.
"(The state is) just like a gangster trying to eliminate competition," he said.
Riney said he frequents the Vero affiliate and has won about $1,000.
"But even if I lose, I win because I see the list of veterans groups they support," he said. "My losses help those groups."
He said he does not think Allied involves gambling, just a sweepstakes that he thinks is more honest then the lottery.
Whatever takes place in Allied's locations, there is apparently big money involved.
Allied's websites claim the group has donated more than $2.5 million to the causes of veterans and first responders in Florida during the last five years.
But the Florida Department of Agriculture and Consumer Services "Gift Giver's Guide" estimates the organization donated only 1 percent of the money it spent in 2009 to such causes.
Finding out how much Allied takes in is difficult.
Allied Veterans files Internal Revenue Service Form 990s and those forms are sent to the state for its review. The Form 990 for 2009, included with Allied's request for a renewal of its registration with the state, showed the organization had a total revenue of $596,696 and expenses of $601,027 for a deficit of $4,331.
A Form 990 is the nonprofit report form equivalent to an individual Form 1040, which residents use to report all income and expenses.
Asked about the small amount of money on the 990 compared with more than $1 million donated in the fall of 2010, Bass said there were other 990s that