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Vendor defends pull-tab coupon machines

The company that supplies Ad-Tab machines says they're legal. The Sheriff's Office disagrees. An arrested bar owner is caught in the middle.

By ROBERT FARLEY, Times Staff Writer
© St. Petersburg Times
published October 18, 2002


LUTZ -- Put a dollar in the machine and out comes a ticket telling you whether you've won anywhere from $1 to $500.

But flip the ticket over, says Frank Famiano, and there you'll find a coupon, maybe for a can of soup, maybe for a discount on darts and dartboards.

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 coast 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 Lutz, 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 say 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 would pay Walker's legal expenses.

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

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.

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 had been 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 be 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?"

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 had 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.

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