SAN FRANCISCO (CBS SF) — Owners of an Internet cafe in San Francisco’s Excelsior District reached a settlement on Thursday in a lawsuit filed by the city’s attorney that called for the end of allegedly illegal gambling and other criminal activity at the site.
As part of the settlement, Net Stop, located at 4458 Mission St., agreed to close the business, which the city attorney claimed allowed customers to play computer slot machine games and buy electronic “points” that could be redeemed for cash, within the next 60 days.
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The business, owned by Thomas Lacey, also agreed to not open a similar business in San Francisco for the next five years.
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Figure 8 Technologies Inc., a software company that supplied the gambling software to Net Stop and has no relation to the Net Stop owners, also agreed to cease providing the software to any establishments in the state of California for the next five years.
The technology company will also pay San Francisco $25,000 and deactivate its software at all establishments where it is in use.
The business opened in late 2012 and with it came a rise in crime in the area, according to the city attorney’s office. The cafe was called a public nuisance in the lawsuit, which was filed in November.
For many years the internet cafe business spread over the world. First, they popped up in suburban areas of the United States. At that time, the business of Internet cafe gambling was not accessible like it is today; that is why the services were limited. The sweepstakes cafes are a 'new illegal gambling trend similar to Joker Poker (machines) or electronic slots,' according to an NYPD memo from Oct. 'Many locations are.
According to the city attorney’s office, there were 202 calls to police in the area from November 2012 through October 2013. In a similar time period the year before there were only two police calls.
The attorney representing the business, John Weston, said Thursday that his client maintains he was fully compliant with all laws about online gaming, and as part of the settlement there was no admission of wrongdoing.
“The operator took very substantial steps when concerns were first aired,” Weston said.
He said his client had made numerous changes to be a better business and neighbor in the community, including adding security guards, reducing the number of computers, and shortening the hours of operation.
Before the settlement was reached, Herrera was seeking to declare Net Stop a public nuisance and order it closed and impose civil penalties.
In a statement today from San Francisco Supervisor John Avalos, whose district includes the Excelsior, he said, “This is a big win for Excelsior residents…people are going to feel safer on the streets.”
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