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Sweepstakes cafes: coming to your low-income neighborhood

"$Money, Mo Money, Come on, Get it"

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On a recent weekday afternoon, a player at T&L Internet Cafe clicks his mouse, scores doubles and wins $1. When some of the older women customers hit doubles in the online version of a slot machine, the attendant says, they rub the screen for good luck.

To read the sign out front of this Burlington sweepstakes joint—"$Money, Mo Money, Come on, Get it"—you would think everyone would be a winner and that the floors would be awash in $100 bills. But few people are leaving with more money than they entered with.

As census data and visits to the sweepstakes cafes show, these businesses are often located in neighborhoods where people have little to spend and a lot to lose. Ultimately, the house always wins.

Because of a skillful and deliberate parsing of the law, Internet gambling is legal, whereas its video machine counterpart is not. Players "buy time," on the computers, and players win credits in the online sweepstakes that are then transferred back into cash. Unlike slot machines, prizes are paid to winners based on predetermined sweepstakes systems, not by chance. That's the loophole.

Since a state law passed last year created the loopholes, sweepstakes cafes have flourished throughout North Carolina. Yet that these businesses are opening is less notable than where they're opening—many of them in low-income and/or minority neighborhoods.

For example, in the census tract that includes T&L Internet Cafe in Burlington, 16 percent of individuals live below the federal poverty level; 20 percent of residents are Latino.

A1 Sweepstakes sits at the feet of St. Augustine College in Raleigh, in a rough neighborhood where one-quarter of individuals are poor and eight of 10 residents are African-American.

In Durham, in the census tract that includes RCB Internet Cafe, nearly half the families are poor; 96 percent of residents in that Southside neighborhood, which includes the Rolling Hills, are African-American.

"I thought it would be a good business," said Ron Bullock, owner of RCB Internet Cafe. As for choosing the location, he added, "You have to use your own judgment. The rent was cheap."

(The Indy tried to contact several café owners by phone, but they did not return calls seeking comment.)

Ray Eurquhart, an activist on Durham's South Side, said he thought the RCB Internet Cafe was a "place to drink lattes and work on a computer." When told about the café's gambling business, he said he "takes a dim view" of these enterprises, "the kind that [are] getting people to take chances with their money, instead of saving and having a financial plan."

But census data tells only part of the story. The ground truth reveals more: Many of these sweepstakes cafés are couched near pawnshops, rapid tax refund services and other places that cater to customers looking for quick cash.

(That includes criminals. In December, Burlington police responded to an armed robbery at Internet Sweepstakes on Eric Lane.)

They are also likely to be near Latino restaurants, groceries and hair salons. Winters Internet Cafe in Burlington is in the same strip mall as a Fiestas Forever, Caribbean Sports Bar, a tienda and Centro La Communidad, and across the street from El Toral Mexican Grill.

Others are near public housing projects or similar low-income neighborhoods: Lucky's in Northeast Central Durham is a half-mile from a public housing community on Gary Street.

At least three Internet sweepstakes cafés are in state Sen. Floyd McKissick Jr.'s legislative district. He said potential customers could mistakenly believe Internet sweepstakes cafes are primarily places for people without Internet access to surf the Web. (Cybercafes were common in the 1990s before the Internet was widely available.) "We have some legitimate businesses that are trying to provide service for those who don't have it otherwise," McKissick said. "But we need a way to identify businesses that are exploiting vulnerable populations who are using their limited resources on gambling." (The tinted windows and dollar sign decals are usually a dead giveaway.)

"Maybe we should think about how to regulate the marketing of these businesses and make people aware of what they're doing," he said.

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