FORT WAYNE – The Indiana Attorney General’s office is asking a federal judge to wait to weigh in on the state’s gambling laws after criminal charges were filed against the owners of an Internet sweepstakes operation.
Buckwheat Holdings LLC and Lincoln Plaza Internet Sensations sued the state in January to prevent the Indiana Gaming Commission from enforcing the state’s gaming laws.
The suit came weeks after state gaming agents raided two local businesses and carted off 51 gaming machines and $3,000 in cash.
In April, Allen County prosecutors filed a series of criminal charges against the companies, the companies’ owners and some employees.
The charges included corrupt business influence, promoting professional gambling and money laundering.
According to court documents, Lincoln Plaza Internet Sensations sold Internet “air time” for $5 an hour.
For each hour they bought, customers received five free sweepstakes credits, which could then be used to place bets on Vegas-style games accessed from Lincoln Plaza Internet Sensations computers.
Winners received $1 a winning credit, according to court documents.
Since September, state officials have identified the sweepstakes machines as “electronic gaming devices” and were prohibited even in businesses authorized to have pull tab-type games.
State officials said at the time of the raids that Internet sweepstakes machines can quickly become a problem and have become prevalent in Ohio, North Carolina and Florida.
But those who run such cafés say the machines are analogous to McDonald’s restaurants’ Monopoly game, where customers buy food, get a ticket and have a chance to win.
In March, attorneys for the state of Indiana asked the federal judge not to weigh in on the case until Buckwheat Holdings had a chance to raise its issues in state court.
Since the December raid, attorneys representing Buckwheat Holdings sued in Marion Superior Court, seeking a determination against the Indiana Alcohol and Tobacco Commission that the machines are not electronic gaming devices.
According to court documents, a Marion Superior Court judge ruled against Buckwheat Holdings, saying that the customers are paying for gambling games regardless of whether they receive Internet time with their purchase.
That ruling, argued the deputy attorneys general in federal court, shows the seizures of the machines is proper and ruling on Indiana’s “complex scheme of gambling regulations” should be left to the state courts.
Last week, the state of Indiana said the federal judge should abstain from ruling in the case while the Allen Superior Court criminal case against the sweepstakes operations played out.
