SalemNews.com, Salem, MA

September 24, 2012

Town wonders if ban on Internet cafes extends to Lucky 7

By Ethan Forman
Staff Writer

---- — DANVERS — Officials are questioning whether the casino-style Lucky 7 Arcade with its penny video slot games will run afoul of a new state law aimed at cracking down on electronic devices used for illegal gambling in Internet cafes.

The adult arcade’s devices at the Liberty Tree Mall may fall under a law set to take effect Nov. 1.

The issue is whether Lucky 7’s games are games of chance or games of skill.

Lucky 7 LLC has operated a location in Gloucester for six years and a few months ago opened an arcade at the mall on Independence Way. The machines at both locations mimic slot machines but require some skill to play, Lucky 7’s owner says.

Officials are also questioning whether the new law might extend to coin-operated amusement devices that pay off tickets that can be redeemed for prizes.

“It’s a fluid situation,” Town Clerk Joseph Collins said. “We are doing our due diligence.”

In April, selectmen, by a vote of 4-1, approved Lucky 7 LLC’s applications for 41 coin-operated amusement devices. The town received license fees of $100 per machine, and the applications were approved. Selectman Gardner Trask was the lone dissenter, and since then, he’s been leading the charge to rescind approval for Lucky 7’s machines.

Earlier this month, Trask questioned whether the new state law may apply to Lucky 7. Since then, Collins, Town Manager Wayne Marquis, the town attorney and police Chief Neil Ouellette have met on the issue. The town is also surveying other communities for answers. So far, the state has not given much direction, but Collins said the town wants to make sure Lucky 7 and other operators of amusement devices are in compliance when the law changes.

“We are trying to move on this so we have a definitive action or answer by Nov. 1,” said Collins, who sent out letters this week to all operators seeking more information.

Collins said it may be the state has cast too broad a net in trying to clamp down on Internet cafes.

He asked if the town would also have to consider whether the law aimed at eliminating machines that “conduct a sweepstakes through the use of an entertaining display” would extend to places like Chuck E. Cheese’s, the Sunnyside Bowlodrome and other establishments that have licenses for electronic arcade games.

Part of the answer may lie in the word “sweepstakes” and how it is interpreted, Collins said. The other part will hinge on whether Lucky 7’s games are games of skill or chance. Skill games are allowed; those that pay off because of chance are not.

Owner/manager Rosalie Parisi says one thing Lucky 7 is not is an Internet cafe, nor is it a casino that runs a sweepstakes.

“We fall under the arcade law, which Chuck E. Cheese’s (in Danvers) and Bonker’s Funhouse Pizza (in Peabody) follows,” Parisi said. “Our machines are also approved by the state.”

Lucky 7 does have a casino-like atmosphere, in part to attract older adults who may like real casinos, and in part to deter kids from going in. No one under 21 is allowed to play.

While the penny slots mimic casino games, there is a big difference between them. In a casino, “you press a button and you either win or lose,” Parisi said. At Lucky 7, players playing the eight-liner video slot machine games must press a button to stop the machine to try to win.

“There is skill involved in the games,” Parisi said.

The business came under scrutiny by state and local officials in Gloucester six years ago after it failed to renew its license for the following year, Parisi said.

At the time, it was found the games partially involve skill but also require some luck, Parisi said. So, when players play the arcade games, they gain points. When they gain enough, they cash those in for a token. Players then must play an arcade “crane game” for a chance to win gift certificates to area restaurants. Those gift certificates, when used, help the local economy, Parisi said.

Games can be played for as low as 16 cents, so people can spend a lot of time playing and not spend a lot.

“They have hours of entertainment for $5,” Parisi said, “We are not hurting anybody.”

“I don’t consider that a game of skill,” Trask said of the games at Lucky 7. Trask, a computer programmer, said such games could be programmed to pay out on a certain schedule, regardless of a player’s skill. The old law was open to interpretation, Trask said, but the new law would clearly outlaw the use of Lucky 7’s machines.

“I don’t think it’s the appropriate thing in this town,” Trask said. While he agrees that Lucky 7 does provide entertainment for older players who may not want to go to a casino, Trask said he sees little difference between Lucky 7 and the real thing.

“It’s gambling, straight out,” Trask said.

The new state law was aimed at cracking down on so-called cybercafes.

In April, Attorney General Martha Coakley’s office put out emergency regulations aimed at banning cybercafes and phone card video gaming and worked with state lawmakers to craft legislation to outlaw them.

Such businesses pretend to sell Internet access or phone cards. Cybercafes sell Internet time along with the chance to win prizes by playing video slot machines. According to statements from the attorney general’s office, customers pay money to gamble, paying $10 for a swipe card loaded with points that can they can redeem for cash if they win.

The attorney general said that more often than not, players lose and pay for more cards. Phone card video gaming involves convenience stores selling phone cards that give customers a chance to win at a video slots or poker game.

The attorney general’s office declined to comment on the town’s concerns about Lucky 7. Such matters are usually decided in court, and Coakley’s office cannot comment about a specific business’s operations.

“Our office continues to investigate Internet cafes and other operations that appear to be in violation of Massachusetts law,” said Emalie Gainey, a spokeswoman for Coakley.

Parisi and her husband, Sam, got the idea to open Lucky 7 when they went to Florida in 2006 and visited an adult arcade. They then brought the idea to Gloucester.

“They are all over Florida,” Parisi said.

Staff writer Ethan Forman can be reached at 978-338-2673, by email at eforman@salemnews.com or on Twitter at @DanverSalemNews.