Indictments filed against 10 sweepstakes cafes in Virginia Beach

VIRGINIA BEACH

Commonwealth's Attorney Harvey Bryant announced Monday that a special grand jury has indicted the owners or operators of 10 Internet sweepstakes cafes on criminal charges of illegal gambling.

The defendants face indictments as the result of an investigation that culminated with police raids of the businesses in September.

The indictments appear to be the largest action in Virginia against sweepstakes businesses that have been popping up across Hampton Roads and elsewhere.

"The grand jury determined that there was probable cause to believe that what was going on was in violation of the gambling statute," Bryant said.

Sweepstakes cafes occupy a murky area of state law. Some commonwealth's attorneys, such as Bryant, have said they're illegal, and some have said they're not. Chesapeake has not taken action against them.

The owners say they don't meet the legal definition of gambling.

What does in Virginia isn't exactly clear. For example, Virginia Attorney General Ken Cuccinelli has issued two advisory opinions based on different hypothetical business situations and reached different conclusions.

Each operation needs to be "considered on a case-by-case basis," Cuccinelli wrote in an Oct. 15 opinion.

The General Assembly will likely take on the issue in the upcoming session.

"The whole thing is unclear and fraught with arguments on both sides, and until the General Assembly defines what is and what is not allowed, it will be very, very difficult to successfully prosecute these cases," said Suffolk Commonwealth's Attorney Phil Ferguson, who wasn't specifically reacting to the Beach indictments. Ferguson said he thinks the games are legal.

"My general rule is it's legal unless I can determine from the statute that it's illegal," he said.

Authorities will be notifying those who have been indicted and asking them to turn themselves in, Bryant said.

Some owners said they plan to fight the charges.

"A major injustice has been done against my rights, and this is a travesty for all business owners in the Virginia Beach market," said Daniel Storie, who owns four cafes in Virginia Beach. "We have not stopped fighting since day one, and we plan on fighting the whole way."

"We knew this was coming," said Doug Harris, co-owner of a Beach cafe. He called the indictments a "prelude to their filing for forfeiture for all our stuff."

Police seized about 500 computers from the 11 businesses raided in September.

Some of the indictments named corporations and two named individuals. A commonwealth's attorney spokeswoman described all those charged as "corporate entities."

Of the 11 businesses police raided, indictments were filed against the owners of 10. The owner of the Pungo Red Barn, a convenience store, was not indicted.

"The person in charge didn't seem to understand what was going on," Bryant said.

Aaron Applegate, (757) 222-5122, aaron.applegate@pilotonline.com