The Herald Bulletin

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March 22, 2013

Florida to probe second sweepstakes chain

ST. AUGUSTINE, Fla. — Fresh off a nearly $300 million racketeering case involving a veterans' charity that benefited from simulated gambling at Internet cafes, Florida regulators will investigate a children's cancer group connected to a sweepstakes network that is four times bigger.

The new probe comes in response to Associated Press inquiries about Children's Cancer Cooperative, a group that operates out of a South Carolina bingo parlor, shares a lawyer with Allied Veterans of the World and has collected cash from more than 200 of the sweepstakes cafes in Florida.

In exchange for the money that has flowed into the Children's Cancer Cooperative from the cafes, the charity's name is listed as sponsoring sweepstakes prizes offered at the cafes, giving players the impression money lost on the fast-moving games mimicking Vegas-style slots goes to help sick kids.

As with the Allied Veterans case announced earlier this month, the central questions will be how much money the cafes raised, how much of that should have been taxed, and how much ultimately went to charity.

When authorities in Florida charged 57 people in the Allied Veterans case, they labeled Jacksonville attorney Kelly Mathis — who has also for years represented Children's Cancer Cooperative — the architect of the scheme. The resulting political and legal maelstrom triggered the resignation of Republican Lt. Gov. Jennifer Carroll, who had done consulting work for the charity, and sent top elected officials from both parties in Florida and North Carolina scrambling to return or at least explain the more than $1 million in campaign contributions they accepted from donors linked to Allied.

The revelations also have ignited a debate in Florida about how well the industry is regulated, how the millions of dollars flowing in and out of the cafes can be properly policed and whether enough of it is going to charities, a chief reason the cafes are allowed to operate tax-free and outside the realm of sanctioned gambling. The Florida House overwhelmingly approved a bill Friday that seeks to outlaw sweepstakes gaming.

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