HOTSPOT ON THE SPOT - AGAIN

28 November 2008

Utah Internet cafe's license revoked

 

Alleged online gambling activities have resulted in the business license for the HotSpot Internet Cafe being suspended for the second time this year, and for the same reasons - a debate on whether the cafe's "sweepstakes" business model is illegal or not.

The Salt Lake Tribune reports that Midvale officials have revoked the business licence for the enterprise because it offered "sweepstakes" chances with the purchase of Internet time.

Midvale Mayor JoAnn Seghini told reporters that the license had been lifted following reports that the cafe was offering Internet gambling activities, something that the owner had not mentioned in his application for a licence.

"They were playing games, like computer slot machines and various games of chance," she said. "They said it wasn't gambling, but if your lucky number came up, they gave you cash."

Arguing against the city's action, an attorney for the Internet cafe said the operation was completely within Utah law. Steven Stewart described the "sweepstakes" chances offered with purchase of Internet time as a "promotion" allowed under law. Stewart said he and other representatives from the Internet cafe met with attorneys and police from Midvale at the time the licence was issued to explain the sweepstakes.

Earlier this year, Hot Spot suffered similar municipal action for allegedly offering gambling, and local administrative law judge J. Scott Lundberg was asked to review the case. He concluded that sweepstakes was an integral part of Hot Spot's business, rather than a promotion, and that the operation was therefore outside of Utah law.