A version of this story ran in the June 2013 issue.
Internet sweepstakes parlors have become such a lucrative business in the Rio Grande Valley that even the former mayor of Brownsville, Pat Ahumada, opened his own. Ahumada called his sweepstakes parlor Goldmine 777. In early May, police raided the establishment, carting away 200 computers and escorting the former mayor out in handcuffs.
After his release on a $2,000 bond, Ahumada told The Brownsville Herald that he did nothing illegal. But Cameron County District Attorney Luis Saenz calls the Internet sweepstakes and eight-liner businesses a “criminal epidemic” (eight-liners are video gaming terminals). Saenz estimates there are at least 200 such businesses in his county. In Texas, eight-liners and sweepstakes games generate as much as $300 million annually, Saenz said in a written statement to the Observer. “This is revenue known to benefit organized crime. It doesn’t benefit our community, because it’s not being spent in our community.”
Ahumada and other sweepstakes owners contend that their business is perfectly legal, and that Cameron County has been issuing permits for the machines. They charge for Internet time on their computers, but they don’t charge customers to play the game. This distinction, they argue, makes their actions techincally legal. The former mayor told the Herald that Goldmine 777 offers one daily free entry per person, but participants are not required to play.
Saenz says the parlor owners are breaking the law. The problem is the way customers use the machines. “There is a gross misconception that a sweepstakes is legal gambling either because they utilize a computer system and/or they benefit a local charity,” he wrote. “Bottom line: If a sweepstakes is paying out at least $5 in cash, it is illegal.”
Law enforcement in Cameron County has shut down five eight-liner businesses in recent months. The crackdown is part of a countywide criminal investigation into illegal gambling called Operation Bishop, which, according to Saenz, is aided by the Department of Homeland Security and several county law-enforcement agencies.
After the former mayor’s arrest, the county decided to pass an eight-month moratorium on issuing permits for gaming, building and zoning permits that could be used by sweepstakes or eight-liner businesses. Brownsville city leaders say they’ll study ordinances in other cities in hopes of crafting one that both officials and business owners can embrace. An agreement will likely come too late for the former mayor, whose 200 computers were seized under Operation Bishop and will either be salvaged or destroyed.