Action by city council tonight will change the face of Internet sweepstakes cafes in Roanoke Rapids, but approval of an $80,000 cap on annual license fees could still give the one approved to operate at the theater an unfair advantage, says a local owner and lobbyist for the industry.

Council on a 4-1 vote approved allowing Internet cafes in the Music and Entertainment District, action done to pave the way for a lease with option to buy deal for the theater. Councilman Carl Ferebee voted against the measure.

(Video on the discourse concerning the annual license fee is included at the end of this account from Digital Concepts)

Later in the meeting council set a cap on the annual license fee charged for the establishments. That fee is $2,000 for the first five machines and $1,000 for each additional machine.

In approving the amendment for the land use ordinance allowing electronic gaming in the entertainment district, council made it possible for ones outside the district to extend hours of operation and apply for ABC permits to serve alcoholic beverages.

William White Jr., a Roanoke Rapids attorney speaking for a limited liability company outside the state, spoke from a prepared statement during the public hearing on the matter. “If electronic games are permitted as an accessory use in the theater, my client intends to negotiate in good faith, quickly with the city, for an acceptable lease with an option to purchase. The availability of electronic games is an additional marketing tool for the theater.

“As stated to the planning board, if my client wanted to operate only an Internet café, it could acquire land in Halifax County or Northampton County where there are no limitations on hours of operation or alcohol sales if properly permitted and where there are no license fees. The theater will not become an Internet café.”

White said the only thing his clients are requesting is what the planning board and planning staff has recommended — to permit up to 15 percent of the total area as an accessory use and if the city wants to restrict accessory use to 10 percent for the term of the lease, “Then we will resolve that issue during lease negotiations. My client has the resources to (ensure) that the theater will succeed. When it does succeed, my client intends to be instrumental in the expansion of the theater and in the development of the entertainment district as contemplated in 2005.”

Gardner Payne, an attorney who opened one of the first Internet cafes in the city and has lobbied for the industry, spoke of the license fee before it was discussed later in the meeting. “I feel in the next session of the General Assembly you could hear Roanoke Rapids being talked about as a bad actor. It’s supposed to be a sweepstakes,” he said in lobbying for council to require each establishment to submit its lab results. “The main issue is a level playing field. I don’t think one group should be given an unfair advantage.”

Council voted to approve the land use amendment with Ferebee voting against the measure. He said following the meeting he had problems with extending the hours to 2:30 in the morning, the gaming operations being in the lobby instead of enclosed areas and selling alcohol.

Ferebee said he is still reviewing the proposal from the LLC that wants to buy the theater. “I have some reservations,” he said. “As a whole it’s not a problem with Internet gaming. It’s with the city having it.”

Meanwhile, the motion to set the cap on the annual business license by Greg Lawson died for lack of a second and had to put back on the table with encouragement from Interim City Manager Ed Wyatt.

Once it was put back on the table because it was a matter included in this year’s budget, council approved it by a 4-1 vote with Ferebee voting against it.

Councilwoman Carol Cowen said following the meeting the initial confusion, at least for her, centered on fairness.

Payne said following the meeting the cap could give an establishment with more machines an unfair advantage when he annually pays $50,000 for his and a competitor with more would be cut off at $80,000.