On Friday, June 8, 2012, Michigan Attorney General Bill Schuette announced that his office’s Alcohol and Gambling Enforcement Division has issued cease-and-desist letters in regards to nine Internet sweepstakes cafes. The cafes are accused of operating illegal gambling activities and were ordered to shut down immediately.
These letters reflect a state Attorney General-led campaign to find and eliminate illegal gambling operations throughout the state. The campaign is being run by the Attorney General’s office, the Michigan State Police, and the Michigan Gaming Control Board. The targeted Internet sweepstakes cafes are businesses that allow people to purchase internet usage and that include chances to play certain games that can result in cash prizes. The Attorney General’s office has taken the position that this style of activity violates the Michigan Gaming Control and Revenue Act and state-penal code. In accordance with similar cease-and-desist letters issued earlier this year by the Attorney General’s office, Innovative Entertainment of Michigan agreed to shut down eight of its Internet cafes last month.
The June 8thcease-and-desist letters were sent to Internet cafes throughout the state that are alleged to have violated Michigan law. The locations that received the letters are:
1. Treasure Island (Lansing)
2. Spin City Internet Cafe (Lansing)
3. East Point Business Center & Internet Cafe (Flint)
4. West Point Business Center & Internet Cafe (Flint)
5. Players Club Pontiac Internet Café (Pontiac)
6. Players Club Internet Café (Warren)
7. Super Café Internet Café (Warren)
8. Treasure Island Internet Lounge (Clinton Twp.)
9. Treasure One Cyber Café (Roseville)
If any of these specific locations fail to stop their operations, the letters state that further action will be taken immediately, including closing the locations and seizing equipment through a civil lawsuit and/or criminal proceedings.
The Flint Business Center, one of the cafes that received a cease-and-desist letter earlier this year, has filed a request for preliminary injunction in the Genesee County Circuit Court to prevent the state from exercising the enforcement measures outlined in the cease-and-desist letters. The Flint Business Center puts forth the arguments that the games do not require any consideration because sweepstakes entries are offered for free with purchase or upon request, and, therefore, the activity is permitted under Michigan law. In addition, the Request for Preliminary Injunction argues that the company will suffer irreparable harm if the state seizes its property as contemplated in the cease-and-desist letters. A hearing on this motion has been scheduled for June 18, 2012.