Northpinellas: Coupon machines out of luck with Sheriff's Office

And that's why the Ad-Tab machine is not an illegal slot machine, said Famiano, who oversees vendors who place the machines in bars and social clubs all over the west cost of Florida.

Pinellas County sheriff's officials disagree.

On Oct. 2, they charged the co-owner of Piglet's Sports Bar and Grill in Dunedin with operating an illegal lottery for having one of the machines in his establishment.

Pinellas County is not the first place in Florida where the machines' distributors have clashed with authorities. FACE Card Promotions, the Wisconsin company that makes the machines, sued the Florida Department of Business and Professional Regulation in Lee County in the summer after state agents confiscated several of its machines.

While the case is pending, the state agreed not to take enforcement action against the company, the establishments that have the machines or their users, according to court records. Famiano, 41, who lives in northern Hillsborough County, had hoped other agencies in the state would hold off on enforcement, as well.

But with the recent arrest of Piglet's co-owner David M. Walker, 41, of Oldsmar, Pinellas County is no longer on the sidelines. The battle now moves to criminal courts as well.

Sheriff's detectives believe the machines clearly run afoul of state laws against lottery machines, sheriff's Sgt. Greg Tita said. The coupons appear to be a thinly veiled attempt to circumvent those laws, he said.

And the Pinellas sheriff's office is not bound by any civil case in Lee County, Tita said.

"Until someone says differently, that charge will stand," he said.

Big bucks are at stake, Famiano said, as the civil and criminal cases might ultimately determine whether the machines are allowed statewide. Famiano said FACE Cards Promotions will pay Walker's legal expenses.

"I do feel like the pawn," Walker said last week.

He referred questions to John Fitzgibbons, a prominent Tampa criminal defense attorney and a former federal prosecutor. Fitzgibbons declined to comment last week, saying he had not yet been formally retained as Walker's attorney.

After deputies arrested Walker, the owners of bars and social clubs that had the Ad-Tab machines in Pinellas County demanded that the company remove the machines, Famiano said. There were 10 machines, Famiano said, but he declined to name where they were.

"If you thought you were going to go to jail for 7 cents (per coupon sold), would it be worth it?" Famiano asked. "It's not worth getting your name in the paper. I wouldn't want that for anyone."

Bar owners receive 7 cents for every ticket purchased. The Ad-Tab company reimburses each bar for winnings collected there and keeps the rest of the proceeds.

Each machine stands nearly 6 feet tall and looks like a cross between an ATM and a vending machine.

A FACE Card Promotions executive referred questions about the machines to a spokesman, who did not return calls from the Times last week. According to the company's Web site, www.facecardpromotions.com, a typical Ad-Tab retailer produces $6,300 a month in sales. In one case, according to the Web site, one operator with 25 retailers earned more than $500,000 a year after expenses.

Famiano said bar owners were assured that the machines were legal. And they were assured that the company would pick up the expense if the machines led to legal problems. He never thought anyone would get charged with a felony.

"I felt really bad about that guy (Walker)," Famiano said. "I don't think it's fair how the Pinellas County Sheriff's Office handled this. Every other county has held off (pending the outcome of the Lee County civil case). What does that tell you? Why spend taxpayers money on something that's already in the works?

"We can go round and round about whether it's legal. It's up to the judge. His is the opinion that counts."

In the Lee County case, the attorney for FACE Card Promotions argues that consumers who put money in the machines are buying coupons that "at no additional cost include a game promotion that provides the consumer with a chance to win a cash prize."

It's no different than the McDonald's Monopoly game promotion that provides game pieces to purchasers of food or the Frito-Lay game promotion in which some bags of chips have coupons that award cash prizes, Fort Myers attorney Kevin F. Jursinski wrote in court filings.

The stipulation between the two sides, approved by a Lee County circuit judge last month, prohibits the Department of Business and Professional Regulation from enforcement action while the case is pending. The state agreed not to seize Ad-Tab coupons or machines or issue citations, warnings or threats to the company or its customers.

A spokesman in the state department declined to comment because the case is still in litigation.

The stipulation specifically notes that it is not binding on other agencies in the state.

It certainly doesn't affect the Pinellas County Sheriff's Office, said Glenn Martin, a prosecutor in the Pinellas-Pasco State Attorney's Office.

"That's Lee County," he said. "This is Pinellas."

Martin said he has not yet seen the Ad-Tab machine, but "quite possibly it is a lottery machine."

"Using a machine that looks, smells and tastes like a slot machine, that is regulated," he said.

Martin said he thought the courts had settled the issue when Pinellas County took on a company that distributed machines from which people could purchase telephone calling cards that included two minutes of calling time and chances to win cash prizes.

In July 1998, detectives seized 12 of the calling-card machines in raids at five bingo locations. The owner of the games, Laurencio Lira, was cited for possession of a gambling device but was acquitted.

Martin said the case was doomed by a county official who had written a memo before the machines were seized saying the company could continue using the machines until he rendered a decision about their legality.

But when the company, Diamond Games, sought to have its machines returned, a judge deemed them to be illegal slot machines. In December, the 2nd District Court of Appeal upheld that ruling.

"People buying the pull tabs were throwing them on the floor if they didn't win," Martin said.

He suspects that the same thing happens with the coupons.

"It's just another twist," Martin said.

Bar owners put them in their establishments at their own peril, Martin said.

Why would bar owners walk that fine line?

"It's big money," Martin said.

Famiano agreed.

"We have so much money at stake here," he said. "And not just me. There are are other operators. "Why are people buying? I don't know. I think people buy coupons and never use them."

That's not important, though, he said, because buyers get their value. Some coupons provide discounts on Campbell's soup. Others give 10 percent off dart equipment sold by an online distributor. The savings one could realize from each coupon is worth well more than $1, he said.

Every card has a 67 to 75 percent chance of cash prizes, too, he said. The ticket purchased last week by a Pinellas vice detective won him his dollar back.

"It's just sad it had to get to this point where someone got arrested," Famiano said.

The issue should have been left to the outcome of the civil case, he said.

"If it becomes illegal, so be it," he said. "Until then, we have a right to use them. "We want this thing in court, and we're going to win it. They made their move, and now we're making ours."

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