Electronic Game Promotion Establishments (Internet Cafes) City Council Public Hearing 2nd Reading May 1, 2012

1. Electronic Game Promotion Establishments (Internet Cafes)City Council Public Hearing2nd ReadingMay 1, 2012

2. Internet CafesBackground – PLDRB Recommendation • PLDRB Recommendation: • Approval of LDC Amendment • Comments from Board members • Sunday operating hours should be reduced • Length of non-conformity (member thinks it should be minimal or none at all) • Reasoning for 1,000’ separation from church, schools, and public parks

3. Internet CafesBackground – Issues from Previous Public Hearing Sec. 16-239: Definition “Electronic Equipment” means any electronic device provided by or on behalf of the Operator that is used or adapted for use to conduct or reveal the results of, a drawing by chance conducted in connection with the sale of a consumer product or service, sweepstakes or other game promotion, that displays results by simulating a game or games ordinarily played on a slot machine andornother similar electronicgames of chance. Sec. 16-241: Initial Certificate of Use. At the time of the renewal of Business Tax Receipt aAll nine Operators who are conducting an Electronic Game Promotion on the date of the adoption of this Ordinance have 45 days from the effective date of this Ordinance to shall apply for a Certificate of Use. as provided for in this section. Any such initial Certificate of Use shall have a term or duration until September 30, 2013.

4. Internet CafesBackground – Issues from Previous Public Hearing Sec. 16-242: (d) a statement certifying that the establishment and the electronic game promotion comply with all applicable State regulations, including but not limited to, Florida Statutes 849.0935 and 849.094, and any necessary supporting documentation. • Include requirement to post bond or establish a trust account if the sweepstakes advertise a prize of over $5,000. • Other requirements for operations which offer $5,000 prize and above include keeping database of all winners of more than $25.

5. Internet CafesBackground – Issues from Previous Public Hearing Sec. 16-251 (e) Establishments shall not have window tinting that reduces exterior or interior view in a normal line of sight. Window signage shall allow a clear and unobstructed view from outside the building and in a normal line of sight of the cash register and sales transaction area. • Ordinance prohibits tinting or obstruction of windows that reduces view in a normal line of sight. • Additionally requires a clear line of sight to the cash register and sales transaction area (The signage section of the ordinance already prohibits signage between the vertical distance of 4 and 6 feet).

6. Internet CafesBackground – Issues from Previous Public Hearing Options: • Establishments shall not have window tinting that reduces exterior or interior view in a normal line of sight. Window signage and tinting shall allow a clear and unobstructed view from outside the building and in a normal line of sight of the cash register and sales transaction area. • Establishments shall not have window tinting that completely eliminates exterior view in a normal line of sight. Window signage shall allow a clear an unobstructed view from outside the building and in a normal line of sight of the cash register and sales transaction area. (from Internet Café Owner) • Delete Section

7. Internet CafesBackground – Issues from Previous Public Hearing Sec. 16-251 (d) Licensed security guard required on premises from 6 p.m. to closing. • There is currently no proposed change to this requirement since there has not been an identified alternate to a licensed security guard. Sec. 16-250 (e) Hours of Operation • There is currently no proposed change to the hours of operation from (10 a.m. to 2 a.m.) to (8 a.m. to 2 a.m.) as suggested by representatives from Internet Cafe.

8. Internet CafesOther Amendments Sec. 16-242(a)(3) (3) A cCertificationby an independent testing laboratory through laboratory confirmation report that the computer software used by the Operator to conduct the Electronic Game Promotion has been tested by an independent testing laboratory that has verified the manner in which the software works and whether or not it contains a random number generatorand that it does not contain a random number generator. The verification shall comply with all applicable state and local laws, including this Ordinance;

9. Internet CafesBackground • Moratorium Expires May 4, 2012 • Direction from previous City Council Workshops • Control Location, Development Standards in Land Development Code Regulations • Business Operation (including safety, background checks) - Code of Ordinance Amendment

10. Internet CafesCurrent Status • 9 Establishments • 8 are in COM-2, 1 in COM-1 • Classified as “Retail” use and allowed in all Commercial zoning districts and Master Planned Development (MPD)

11. Internet Cafes-Background - Non-conforming with proposed regulations. *Incidents include: Abandoned Vehicle, Alarm-Commercial Burglar, Disturbance (Verbal or Physical), Indecent Exposure, Intoxication, Suspicious Vehicle, Person, or Incident.

12. Internet Cafes • Land Development Code (LDC) amendments • Definitions: • “Electronic Game Promotions” a sweepstakes or other game promotion which utilizes Electronic Equipment … in connection with the sale of a consumer product or service. • “Electronic Equipment” electronic device … used or adapted for use to conduct, or reveal the results of, a drawing by chance conducted in connection with the sale of a consumer product or service … that displays results by simulating a game or games ordinarily played on a slot machine.

13. Internet Cafes • Land Development Code (LDC) amendments • Creates exemption for De Minimis Activity Establishment: • operated by an organization exempt from federal taxation under Section 501 (c) of the Internal Revenue Code, and • with five (5) or fewer electronic or mechanical devices

14. Internet Cafes • Land Development Code (LDC) amendments • Zoning Districts • Prohibit in COM-1, • Special Exception in COM-2 (Existing Uses “grandfathered” for Special Exception Use), • Permit (As-of-right) in COM-3, and • MPD (Part of Development Agreement) • Distance Separation • 1,000 feet from churches, parks, and/or schools • Measured property line to property line

15. Internet Cafes • Land Development Code (LDC) amendments • Parking Standard • 1 space/4 terminals for stand-alone operations

16. Existing Cafes with 1,000’ Separation Requirements Palm Harbor Parkway Along Palm Coast Parkway 1,000 ft. radius around church, school, or public park 500 ft. radius around “café” Flagler Plaza

17. Internet CafesCode of Ordinance Amendment • Definitions • Consistent with LDC definitions • Permitting • Limit number in City (9) • Operation requires Certificate of Use

18. Internet CafesCode of Ordinance Amendment • Certificate of Use Application • To be renewed annually with Business Tax Receipt, • $1,000 processing fee, • Application to include: • Inventory of equipment, • Level 2 Background check for owners and operators of establishments (Statewide and National criminal history check), • Certification that software has been tested

19. Internet CafesCode of Ordinance Amendment • Certificate of Use Application to include: • Affidavit with following: • Identity of operator/owners including names of principals, • Statement of whether any individuals listed as operator or owner has been convicted of felony (previous 5-years) • Verification of distance separation from school, church and/or public park, • Certificate review within 60-days

20. Internet CafesCode of Ordinance Amendment • Eligibility of Operator: • Permit denied for following: • Convicted or plead no contest within five (5) years of application to a: • Felony under Florida Law, • Misdemeanor involving fraud, and • Misdemeanor involving exploitation of vulnerable adult (defined by statutes), • Permit revoked under this ordinance within previous three (3) years, • Application materials are incomplete or untruthful

21. Internet CafesCode of Ordinance Amendment • Denial of Permit: • Operator denied may reapply • Operator may appeal to Hearing Officer within 15 calendar days • $500 processing fee

22. Internet CafesCode of Ordinance Amendment • Restrictions on Transfer of Certificate of Use • Public Nuisance • May be declared public nuisance if site is used on more than two occasions (founded complaint) within a 6-month period: • Assault, burglary, theft, robbery by sudden snatching, distribution of controlled substances & money laundering. • “Founded Complaint” – Review of facts shows preponderance of evidence that a crime has occurred.

23. Internet CafesCode of Ordinance Amendment • Inspection of Premises • Signage Requirements • Interior Signs • Permit (Certificate of Use, Business Tax receipt) • Rules for electronic game promotions (rules, prize tables, odds) • “State and local law prohibits … requiring entry fee … No donation or contribution required. …You may obtain free entries upon request …”

24. Internet CafesCode of Ordinance Amendment • Limitations on Operation of Business • No sale, serving, or consumption of alcohol, • No one under 18 permitted, • No purchase required to enter electronic sweepstakes, • Limitation on number of equipment (100), • No increase in number of equipment, • Hours of operation (10 a.m. to 2 a.m., 7 days a week).

25. Internet CafesCode of Ordinance Amendment • Safety and Security Requirements • Security camera system, • Drop safe, • Silent alarm, • Licensed security guard at night (6:00 p.m. to closing) (Licensing through Department of Agriculture), • Transparency of windows for law enforcement. • Compliance with this section within 60 days of adoption of ordinance.

26. Internet CafesCode of Ordinance Amendment • Penalties • Civil penalties not to exceed $500/violation • Each day the violation exists shall constitute separate violation

27. Internet Cafes - Recommendation • Staff Recommends Approval • PLDRB will review Land Development Code Amendment April 18.