Hayward Imposes Moratorium on Internet Gambling Businesses

Yousuf Fahimuddin,
Politics Editor

The Hayward City Council authorized a 45-day preliminary ban on the construction of new internet gambling businesses Tuesday night, after a brief fight with a business owner over what constitutes “gambling.”

The legislation would specify any store that has more than four computers used for gambling shall be classified as a gambling business.

Ron Doyle, the owner of Net Connection on B Street, expressed resentment about being called an “illegal gambling business”.

He said his business offers cafés for patrons to spend money for computer time, where they can do anything from surf the internet and write college reports, to play sweepstakes games for a chance at winning money.

“It’s the same thing that McDonalds does when they have the monopoly gambling giveaway sweepstakes,” said Doyle. “It does that to bring in new customers, we give away sweepstakes to have more people come in, to sell computer time.”

But what he says differentiates his business from casinos is the chance of winning the sweepstakes is determined already when you buy a ticket, unlike at casinos where he states the chances are determined by a random number generator.

He said when he first started his business, he invited a member of the Hayward Planning Commission to look at his business and see if it’s legitimate, and they didn’t have any issues.

“We are not gambling,” said Doyle. “To say that we are is wrong. It’s a falsehood, it’s not true.”

I-Biz, located off of Mission Street, is the one other remaining business that the city says is breaking the law. The owner of the business refused to comment.

However the owner of Kraski’s Nutrition next door, Elie Goldstein, said that he has had issues with the patrons, some of whom he has seen smoking illegal substances directly outside of his business.

“The type of clientele they have is really not inducive to a retail environment. So they’re really bringing nothing to the community,” Goldstein said.

He said the owner has been polite and has asked him if there was anything he could do for him. Goldstein said his main concern is that they haven’t been able to control their patrons, which is interfering with his business.

Doyle refuted the claim that Worldnet Business Center, the third location, closed because the city sent them a cease and desist letter. The business owner left because his lease had expired and he found a better location, Doyle said. The owner of this business could not be reached for comment.

“We have a library that’s within two blocks of this establishment where you can go on the computer and do your business absolutely for free,” council member Barbara Halliday said.

The first stage of the moratorium is an evaluation period, City Attorney Michael Lawson said. The city wouldn’t issue any new business licenses to businesses claiming to be internet cafes that operate online gambling, he said, despite the fact that it is already illegal in the city.

“The component of gaming as presented in the staff report is not permitted in any event with or without the moratorium,” Lawson added.

The next meeting on April 2 will be a public hearing, which will allow for a more in-depth analysis with a possible extension of the moratorium.

The legislative item passed with an amendment that would specifically prevent any businesses from having one or more computers or wireless devices with access to the gambling games. The city says they are working with the leasing agencies to shut down the remaining two businesses.

Last year, Sacramento police and the Bureau for Gambling Control partnered up to close down local internet cafes that ran sweepstakes games using the same software, “Internet Zone”, as Net Connection. Alameda County has started closing down sweepstakes cafés in unincorporated areas.