The future of “cybercafes” in Colorado grew murkier Friday after the attorney general’s office .
The opinion, prepared for the Colorado Department of Revenue’s gaming division, states that cybercafes or “Internet sweepstakes cafes” are not actually sweepstakes operations but gambling operations that need to be “authorized by a constitutional amendment” approved by voters.
“Because all three elements: consideration, chance, and prize are present, under Colorado law, the activity occurring at sweepstakes cafes in Colorado constitutes illegal gambling,” the opinion states.
AG spokeswoman Carolyn Tyler said it would be up to local law enforcement to decide what should happen with the businesses, which sell Internet access to customers and make available a variety of computer games that dole out points good for cash or prizes.
Dan Corsentino, former Pueblo County sheriff who now works as a consultant for Florida-based Cyber GT Systems, said there are about 40 cybercafes in Colorado. Seven of those are Cyber GT outfits.
Corsentino denied that the businesses constitute gambling, describing them as Internet cafes that give the customer the opportunity, among many choices on the Web, to play games and win prizes.
He said the algorithms in the game software are programmed to involve a certain level of skill not typically associated with games of chance.
Even so, Corsentino wants to find state lawmakers willing to carry a bill that would regulate cybercafes rather than ban them. that would have banned cybercafes .
California, Ohio, Florida and Mississippi are some of the states that have prohibited Internet sweepstakes cafes.
“We believe regulation is better than express prohibition,” Corsentino said. “I’m hoping there is some middle ground.”
To reach that middle ground, Corsentino said cybercafe advocates are willing to change their business model to ensure they comply with the state’s gaming laws.
He likened a potential future regulatory scheme to the one currently in use for retail marijuana, with licensed businesses and inspections by the Colorado Department of Revenue.
Corsentino said the cafes, which would more closely resemble retail outlets that sell a wide variety of goods in addition to providing online games, would be restricted from locating within a certain distance of casinos in the only three gambling communities — Black Hawk, Central City and Cripple Creek — currently allowed in Colorado.
But Rep. Polly Lawrence, R-Roxborough Park, said cybercafes “depend on those who can least afford it” — the poor and the elderly.
It’s why she sponsored the cafe-killing legislation earlier this year, she said. The computers in cybercafes are set up to work like slot machines, she said, yet lack the background checks or requirements that casinos have in place — like having to pay out a certain amount.
“It appears to me that the attorney general was pretty firm that these operations are illegal,” Lawrence said of Friday’s legal opinion.
She said she sympathizes with those employed at sweepstakes cafes who now may lose their jobs, but she said their bosses should never have opened shop when their legal basis for operating was so uncertain.
“I’m sorry about those people who opened up a business but they should have looked into it,” she said.
It was too early to tell Friday if any communities in the state would move to shut down cybercafes in the wake of the AG’s ruling. Earlier this year, the Lakewood City Council passed a one-year moratorium on the licensing of any such operations while the state figured out what to do about them.
On the ballot in November is Amendment 68, which would allow for a casino at the Arapahoe Park horse racing track and at two future tracks.
John Aguilar: 303-954-1695, jaguilar@denverpost.com or twitter.com/abuvthefold
