SalemNews.com, Salem, MA

June 13, 2013

AG: No comment on arcade probe

Fate of Lucky 7 may hinge on cyber café law

BY ETHAN FORMAN
STAFF WRITER

---- — DANVERS — With little explanation, state and local police, at the behest of the attorney general’s office, on Tuesday shut down the Lucky 7 Arcades in Danvers and Gloucester. Danvers officials had the business at the Liberty Tree Mall under scrutiny for months, but it had won praise from Senate Minority Leader Bruce Tarr, R-Gloucester.

“We will be closed until further notice, sorry for the inconvenience,” said a woman’s voice on the answering machine at the number of the Gloucester location, which has been around for about seven years.

In Danvers, town officials were wondering if the casino-like arcade was legal. Its owners have long maintained it offered arcade games for adults, like a Chuck E. Cheese for adults. It involved mostly senior citizens playing penny games trying to win gift certificates to local restaurants.

Brad Puffer, a spokesman for the attorney general’s office, said his office cannot comment on ongoing investigations. Puffer confirmed that the office executed a search warrant, however.

While the reasons the state shut down Lucky 7 Arcade are not known, part of the reasoning may depend on whether the slot-machine devices require skill, like an amusement game, or purely luck, like a sweepstakes, to pay off. A lot may also depend on the state’s 2011 gambling law as it relates to slot machines. This law tightened the definitions surrounding amusement devices, saying slot machines are not amusement devices like pinball machines.

At the urging of now-selectmen Chairman Gardner Trask, Danvers officials last year inquired of Lucky 7, and all other holders of coin-operated amusement device licenses, whether their machines complied with the state’s 2012 cyber café law. A detective even paid a visit to the establishment in October.

This law was meant to crack down on store owners who were selling Internet time, but who were, the state alleges, operating online casinos with a chance to play a sweepstakes.

The town and the state Division of Standards had both licensed the machines being used by Lucky 7 as amusement machines, according to Danvers town records. Trask said the town’s approval was not a legal review of the machines, “it’s more of a weights and measures function,” Trask said. Town boards approved the business as an amusement arcade.

After Trask asked about Lucky 7 Arcade and its relation to the cyber café law, Town Manager Wayne Marquis and others had discussions with police Chief Neil Ouellette and Town Counsel, and the town made a couple of calls to the attorney general’s office.

The town’s own inquiry into Lucky 7 Arcade had not been completed by the time the attorney general’s office acted earlier this week, Marquis said.

However, the town did receive a lengthy response to its inquiry from owner Rosalie Parisi, which read, in part: “I believe Lucky 7 Arcade is fully compliant with both the spirit and letter of the law.”

“Similar to carnival games and family entertainment centers like Chuck E. Cheese’s and Dave and Buster’s, we allow our customers a chance to test their skills in pursuit of winning prizes. Unlike the cyber cafes where the clients walk away with wads of cash, our customers can redeem their points for prizes and gift certificates,” Parisi said in her Oct. 4, 2012, letter.

The town’s questioning of Lucky 7 Arcade drew a strong letter of support for its operators, Rosalie Parisi, and her husband, Sam, from Sen. Tarr who, in an Oct. 5, 2012, letter, stated “I believe Lucky 7 Arcade is fully compliant with both the spirit and the letter of the law.”

Tarr said in his letter the cyber café law was meant to crack down on “unscrupulous store owners who claimed to sell Internet time but actually operated casino style gaming in violation of Massachusetts consumer protection laws ... Lucky 7 Arcade ... is the antithesis of such an operation, and I am proud to have her business operating in the district I represent.” He called the business, which has operated in Gloucester since 2006, “a bedrock of the Gloucester business community and an outstanding corporate citizen.” It not only employs people during tough times, but its prizes of gift certificates to local restaurants helps boost the local economy, Tarr said in his letter.

A call to Tarr’s office yesterday afternoon was not returned as of press time.

Marquis said selectmen will get a brief update on Tuesday, but it’s doubtful any action on Lucky 7 Arcade’s amusement device license will be taken at this time.

How the issues are interpreted “is fairly new,” he said, and ultimately the attorney general “will be explaining their interpretation of the law.”

The attorney general’s office has moved aggressively to crack down on cyber cafés it says are fronting as illegal gambling establishments.

On June 7, the attorney general’s office announced that an owner of an Internet café in Chicopee had pleaded guilty to charges of running an illegal slot parlor, and the corporation, Cafeno’s Inc., in addition to pleading guilty to the same charges, also pleaded guilty to falsifying state tax returns. The guilty pleas were met with stiff fines and two years’ probation.

While there is some question about whether the cyber café law applies to the amusement devices and operations of the Lucky 7 Arcade, given that there appears to be no sweepstakes involved, the state’s 2011 gambling act did tighten rules on operating gambling devices.

The gambling act defined what a slot machine is: being a game of chance or skill or both. It also outlawed anyone from operating a gambling device without a license.

Parisi applauded the cyber café law as “a necessary safeguard against unscrupulous business owners.” Her argument was that Lucky 7’s games depend on skill, not chance or a sweepstakes, and so they comply with state law governing automatic amusement devices, such as pinball machines.

But skill may not be the issue here. While the law refers to machines that depend “in whole or in part, on the skill of the player,” such as pinball machines, the law was also tightened in 2011 with the coming of the state’s gambling act so that the definition of amusement devices expressly does not include slot machines. The state law Parisi cites also forbids amusement devices being used for gambling.