US: Georgia launches crackdown on online gambling

About 50 to 100 active gambling sites have already set up shop in Georgia, and Deal said investigators believe Internet sweepstakes parlors are eyeing hundreds more locations throughout the state. They are laying the groundwork for the move, he said, by challenging local prosecutors in each district with a flawed interpretation of state law.

"Over the past several months there has been a strategic campaign of disinformation regarding this issue," said Deal, who was joined by Attorney General Sam Olens and other law enforcement officials. "Today we are here united to send a clear message that we don't want this industry here in the state of Georgia, and I'm directing the state's resources to eliminate it from our communities."

The problem is partly rooted in the governor's decision to veto a Senate bill this year that would have specifically outlawed online sweepstakes. Deal said he vetoed the measure over technical legal flaws, but the move may have emboldened online gambling firms to step up their efforts to get a larger share of the Georgia market.

The so-called "sweepstakes" games, which have sprouted across the country as an alternative to video poker, are also targeted for another reason. Any time a dollar is spent at a gaming outpost in Georgia, it means more competition for the state-sponsored lottery program that funds the popular HOPE Scholarship, Deal said. "It does hurt our lottery proceeds, and that's directly tied to the HOPE Scholarship program," he said.

At the "sweepstakes" sites, whose names don't usually reference gambling, customers pay for Internet time or phones cards and use them to bet points on computers loaded with games such as poker or slots. Winners can get cash or merchandise prizes, such as canned coffee or car wax. Sometimes the sites also offer business services, including regular Internet service, and food or drinks.

The Internet Sweepstakes Network, one of the largest firms in the industry, said in an October 2010 statement that it was considering adding 16 locations in Georgia, including six in Atlanta and three in Macon. The expansion would create hundreds of jobs in Georgia, said the statement, which also noted the company was encouraging players to donate some winnings to charity.

Company spokesman Casey Rooks declined to comment on Thursday, but the company has said its sweepstakes shouldn't be considered gambling because players aren't required to pay to enter a game. That legal analysis has certainly irritated Georgia prosecutors.

"The industry representatives are contacting every district attorney in the state of Georgia and asserting they're conducting a lawful business. We're here to tell you that they're not," said Douglas County District Attorney David McDade, who heads the District Attorney's Association of Georgia. "They're challenging DA's in every circuit to stand up to them, and we're standing up to them today."

Olens said the Attorney General's office will fight in court to debunk the "complicated legal interpretations" from cafés claiming they're not actually gambling sites. "If it quacks like a duck and it looks like a duck, it's a duck," he said. "And while the dark forces continue to come in our state and discourage prosecutors to take action, we're here to tell Georgians we're going to actively deal with this problem."