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LS 10.16.18 <br />ORDINANCE NO. NS-XXXX <br />AN EMERGENCY ORDINANCE OF THE CITY OF SANTA <br />ANA ADOPTING A 45 -DAY TEMPORARY MORATORIUM <br />ON THE APPROVAL, COMMENCEMENT, <br />ESTABLISHMENT, OPERATION, RELOCATION OR <br />EXPANSION OF CYBER CAFES AND INTERNET ACCESS <br />BUSINESSES WITHIN THE CITY <br />THE CITY COUNCIL OF THE CITY OF SANTA ANA DOES ORDAIN AS <br />FOLLOWS: <br />Section 1. The City Council of Santa Ana hereby finds, determines and <br />declares as follows: <br />A. As in other cities in California, there has been a proliferation of cyber cafes and <br />internet access businesses in the City of Santa Ana. Customers purchase phone <br />time in exchange for opportunities to win chances at internet/network based <br />sweepstakes prizes and money. <br />B. These types of businesses purport to sell phone time or time on computers <br />connected to the internet. However, these businesses also provide customers with <br />sweepstakes entries or credits that are usually worth one cent per credit. The <br />amount of the credits received is usually based on the phone time or computer time <br />purchased, although sometimes credits may be provided free of charge. The <br />customer has the option to select several gambling themed games on the computers <br />to see if they have won additional credits. Customers who win additional credits can <br />cash in any winning, or use the credits revealed on the computer to attempt to win <br />additional credits. Frequently, these games have the same/similar appearance as <br />Las Vegas style games of chance, such as slot machines and keno. <br />C. The State Bureau of Gambling Control has issued a law enforcement advisory in <br />which it determined that in some circumstances the sweepstakes aspect of these <br />businesses constitutes illegal gambling. Following this advisory, there have been <br />numerous raids of these businesses that act as fronts for illegal gambling throughout <br />California. <br />D. It is not always clear under state law whether a particular cyber caf6 and internet <br />access business is engaged in illegal gambling and/or unlawful promotional <br />sweepstakes. <br />E. Even where cyber cafes and internet access businesses utilize lawful sweepstakes <br />features, these businesses have created adverse impacts on public health, safety <br />and welfare, including a dramatic increase in crime including serious and violent <br />Ordinance No. NS - <br />Page lo—f6 <br />