A style of Internet cafes, which in April were banned from operation in Florida, have made their way to Bowling Green. And it’s not clear if the cafes, which offer what operators characterize as Internet-based sweepstakes games with cash payouts, are legal here.

A Daily News reporter, who did not identify herself as a reporter, visited three Bowling Green cafes with the intent of playing games offered on computers. The games have the appearance of playing a slot machine on a computer screen. At two of the businesses, she was given a $5 credit for new players, which she quickly lost. At the third one, she used her own $5 and turned it into $27 in about 20 minutes of play time.

Kentucky Charitable Gaming Commission Deputy Director Bob Sparrow said the issue of determining legality is one for local law enforcement to determine.

“We get calls all the time about slot machines at truck stops and places, but unless it is associated with a charitable organization, there is nothing we can do about it,” Sparrow said. “If it is illegal gambling, it would be overseen by local police.”

Sparrow said the Kentucky Horse Racing Commission, which has regulatory control over electronic games played at Kentucky Downs for cash winnings, also has no jurisdiction over the matter.

Other officials couldn’t give a definitive answer about the legality of the cafes.

“We have been made aware of the cafes and are researching the issue and should know more soon,” Warren County Attorney Amy Milliken said.

The Kentucky Attorney General’s Office also couldn’t offer an opinion.

“Without more information on the types of games featured at the Internet cafes, it would be difficult to speak to their legality,” state attorney general’s office spokeswoman Shelley Johnson said in an email to the Daily News.

Later, Johnson said there is no specific legislation that bans Internet cafes.

Here’s how they operate

At each of the cafes, patrons can buy time on the Internet to check emails or surf the Web. At one of the cafes, a phone card is purchased to swipe to log onto a computer.

The sweepstakes games, as they are called, are an option at all three cafes, which have from 40 to 100 computer terminals. To enter each cafe, a person must be 18. A name must be given to set up an account, but only one of the cafes asked for identification. That same cafe offered a receipt for what was characterized as sweepstakes points. At the bottom of the receipt it said “for sale or use only in a facility authorized under state law and pursuant to local ordinance.” Another cafe had a poster on the wall that listed reasons why the games were legal and how they differed from casino gaming.

Once the game option is selected, a variety of game choices appear. Some games make the screen look like slot machines, including the old-fashioned slot machines with cherries and bells. There also are Keno games, which one operator described as a sort of digital scratch-off. The cafes offer incentives to players who bring in other people; one of them offered additional prizes such as televisions or grills. Players can exchange their winning points for cash based on cafe rules. One cafe had a sign behind the cashier that said no more than $500 worth of sweepstakes points could be redeemed in a 24-hour period.

There were just three or four people in each of the cafes, and all were playing the slot-machine style games at the time a reporter visited.

Talk & Surf is in Sugar Maple Square. Hot Spot and Real Deal Internet Cafe are on Scottsville Road. All are registered with the city’s occupational license office, meaning they have paid a $50 fee and have a signed lease for at least six months.

Real Deal indicated on its application that it would not have employees, therefore would not be required to pay occupational taxes, according to David Lyons, the city’s occupational license manager. The owner listed on the application did not return a phone call to the Daily News. A phone number on a referral card for the business went to a voicemail box that was full. The license indicated the business, classified as an Internet cafe, would open April 15.

Talk and Surf, which registered to begin operations about May 17, said it would have five employees. The business had its first quarterly report and license fee remittance due July 31. Lyons said it’s possible that could still be in the processing stage. On its application, the company said it would be a retail store. There was no phone number on the application, and employees at the store said they were not authorized to speak for a story. A phone call to their manager went to a voicemail.

The Hot Spot registered as an Internet cafe in early March and is current on its occupational taxes, but how much it pays is not public record, Lyons said. The owner of the business was not available for comment before deadline.

The city does not check to see if businesses are operating in the manner that they claim on their registrations.

“We are not a regulatory agency,” Lyons said. “We are just a registration office for occupational license.”

Gaming industry, other opinions

Corey S. Johnsen, who operates Kentucky Downs, was unaware that the sweepstakes games had made their way into the state.

Johnsen said he’s never been to one of the cafes so is unclear of how their operation differs from traditional slot machines or the horse racing machine games that his facility has.

The games Kentucky Downs operates also look like slot machines, but at their heart is the use of a database of 21,000 already run horse races. If the numbers generated by the machine or those selected by the player match the outcome of the race, a person wins cash.

“We had an attorney general’s opinion that said we could operate, the Kentucky Horse Racing Commission has issued us a license … and we’ve had the operation affirmed in a circuit court case,” Johnsen said. “We do everything possible to make sure we follow the law and regulations.

“It is concerning when we see situations like this develop,” he said. “Especially when (operations) in other states were allowed to grow until the government saw problems and shut them down.

“My experience is that unless the government or law enforcement gets involved quickly, and some regulations are issued, you can have some serious problems and the situation can get out of hand.”

The Kentucky Family Foundation continues to battle Kentucky Downs’ operation, and the case is now at the state Supreme Court.

“The Family Foundation is against expanded gaming … but they chose to ignore important things like this. For some reason, they want to focus being against wagering on historical horse racing,” Johnsen said.

Family Foundation Executive Director Martin Cothran said he was unaware that such Internet cafes were in operation in the state.

Cothran said he is unfamiliar with their operations, so he doesn’t know if it is a form of gambling that is illegal under the state constitution.

“Is something any less illegal if you do it online … that is something I would think law enforcement officials should be looking into,” he said. “This has just been brought to our attention. … We are not in the business of enforcing the law.”

Johnsen said Kentucky Downs will continue to do what is necessary to operate within the law.

“We have an industry that has thousands of families that rely on it,” Johnsen said. “I suspect these Internet cafes do not.”

A percentage of the wagering made on Kentucky Downs 390 horse racing terminals goes toward horse racing purses.

“Business is good and continues to grow,” Johnsen said. “We think that this is a perfect product to allow Kentucky horse racing industry to thrive.”

The games at Kentucky Downs have generated $3.5 million in purse money since beginning in September 2011. The live racing this year, which begins Sept. 7, will offer $900,000 in purses each day of the five-day meet.

“That is almost double of what we offered in 2012,” Johnsen said. “We expect to see some of the best horses in the country here as a result.”

Johnsen said if Kentucky doesn’t address the cafes, they can quickly get out of hand as was the case in Florida.

SweepTalk blogger at sweepstakesmachines.com said the games have proliferated in North Carolina, Texas, Ohio and Florida before the law changed.

The blogger advises people who plan on opening the cafes to be up front with what they are doing: tell license people that they will be a sweepstakes business. The blogger offers his opinion that such sweepstakes cafes are legal. “Can you play the McDonald’s Monopoly game in your state? If the answer is ‘yes,’ then you should also be able to open a sweepstakes Internet cafe in your state.”

The American Gaming Association believes such sweepstakes games should be prohibited.

The association, according to its website, estimates that the Internet cafe concept generates $10 billion a year with games that closely mimic the experience of traditional slot and video poker machines. Even before Florida’s outlawing of the games, numerous arrests were made and millions in accounts were frozen there. Busts have been made in Georgia, North Carolina and New Jersey. Ohio law limits payouts to $10, Pennsylvania banned them and New York has criminalized their operation, the website said.

“The American Gaming Association believes that strict regulation to protect consumers is the cornerstone of gambling policy and should apply to all forms of gambling. Responsible public policy should prohibit Internet sweepstakes cafes, as numerous states have done,” the website said.

— Robyn L. Minor covers business, environment, transportation and other issues for the Daily News. Follow her on Twitter at twitter.com/bowserminor or visit bgdailynews.com.