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I-Team: Mini-Casinos Operating Across Mass. In Legal Loophole

BOSTON (CBS) - Gambling casinos in Massachusetts? They are still not allowed, but the i-Team found plenty of people playing slots and video poker right here in the Bay State.

Is it legal? Or are some enterprising entrepreneurs taking advantage of a loop hole in the law?

Chief Correspondent Joe Shortsleeve says state officials are scrambling.

Take a walk inside this so called "Sweepstakes" internet café at Bell Circle in Revere and you would think you were at Foxwoods or Mohegan Sun.

And just like the Connecticut casinos, you can play video slots with cash payouts.

WBZ-TV's Joe Shortsleeve reports.

Patrons say "it is gambling and I love it!"

"You play..... You win money!"

These businesses call themselves "sweepstakes" and they are popping up everywhere.

So how is this legal?

Well, these places say they are selling internet time, meaning you are buying time to surf the web. But the i-Team couldn't find anyone doing that. You see, in return for buying internet time, you are given points or dollars to play sweepstakes games on the casino-like software that already exists on the computer. If you win, you get paid in cash.

The i-Team sent an undercover camera into the "Sweepstakes" on Route One in Lynnfield. We purchased $40 worth of internet time and were given about $45 worth of points.

The i-Team was paid in cash for our $8 in winnings as we left.

Anthony Sabia owns the Route One location. He says it is not gambling. He says anyone can come in and play a small amount of points for free, or about three spins. And that makes the whole operation legal under Massachusetts laws governing sweepstakes.

Sabia says "it is like McDonald's and the Monopoly game. We give the same opportunity to a non-paying customer as a paying customer."

Companies selling the sweepstakes software are the craze on internet. Ads call them the fastest growing companies in the country.

These sites even tout that they are legal in Massachusetts.

Tony Marino sells the casino like software from a prominent spot at the Liberty Tree Mall in Danvers.

He admits they are operating in a loop hole in the law.

"If we are doing something wrong just come and tell us and we will stop...and they have not done that."

But that could change soon.

The Attorney General's office tells the i-Team they are investigating these sites.

"We are looking into issues surrounding these cyber cafes. While they must be dealt with on a case-by-case basis, people should be aware that if there is an exchange of money, it may be a violation of the law. If people have questions or concerns, they can contact our office's consumer hotline at 617-727-8400."

Representative Brad Jones, Minority Leader on Beacon Hill, says lawmakers don't like what they see coming down the road.

"I think this loop hole needs to be examined and may very well need to be closed."

Jones says "it would seem to me if nothing is done... the number is going to amplify which is going to increase competition to the Lottery which is going to hurt cities and towns."

Yes...taking millions off the table.

The i-Team has learned there are at least seven "sweepstakes" currently operating in the Bay State, with another dozen in the pipeline.

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