ST. PETERSBURG, Fla. — The charity-run businesses under investigation in a Florida gambling probe started popping up in strip malls about six years ago and rapidly spread as the unregulated stores became a billion-dollar enterprise.
One of the industry's biggest players was toppled this week when about 50 people were arrested in a handful of states, many of them charged with racketeering and conspiracy, authorities said.
They were all linked to Allied Veterans of the World, a veterans charity accused of masking a $300 million illegal gambling ring.
Allied Veterans had about 50 locations, but by some estimates there are 1,000 such storefronts across Florida. These so-called Internet cafes, which authorities said are actually small casinos with slot machine-style games, have mushroomed in Ohio, South Carolina, North Carolina and elsewhere.Comment on this story
"I'm thoroughly convinced they are illegal in every state in the union," said David Stewart, a Washington lawyer who works for the casino industry's main lobbying group, the American Gaming Association.
He compared the parlors to kudzu, a fast-growing invasive vine. "They grow when people aren't paying attention."
The scandal brought down Florida's lieutenant governor, who was questioned in the probe but not charged. Authorities said charity leaders spent very little on veterans and lavished millions on themselves, buying boats, beachfront condos and Maseratis, Ferraris and Porsches.
Authorities said they were also looking into campaign donations and lobbyists.