Steve Rohan said he met with Allied's attorney, Kelly Mathis, several times in 2007 to discuss the city's ordinances that would affect Allied Veterans' operations.
Mathis is on trial in Sanford, where he faces more than 100 charges of racketeering, possession of a slot machine and conducting a lottery. The judge dismissed 53 money laundering charges after the prosecution rested its case Tuesday.
Rohan and a former assistant state attorney in Volusia County both said they believed Mathis was proposing a legal operation for the Allied Veterans centers.
"That was my opinion," Rohan testified Wednesday. "We would not be advocating for a business that was in violation of state law."
Rohan said Wednesday Mathis was open about setting up the sweepstakes games, which resembled gambling.
Customers of the cafes sign a form that says they were purchasing Internet time. Sweepstakes entries were included for free.
"The (sweepstakes) exception Mr. Mathis proposed, while people might not like it, was a legitimate exception," said Rohan.
Mathis told Rohan that some of the proceeds were going to a veterans' charity.
Eventually, the local dog tracks and poker rooms wanted an ordinance to prohibit Internet cafes in the city, which were run by several companies.
"Neither the state attorney nor the sheriff were trying to cease their operations," Rohan said.
The public, however, wanted the Internet cafes to remain open.
"People spoke at our City Council meeting and demanded the ability to go to them," Rohan said.
Mitch Stone, Mathis' defense attorney, showed jurors a document from the state Department of Agriculture that said legal sweepstakes games in Florida must resemble the McDonald's Monopoly game, where a ticket that might win a prize, is given away with a purchase.
Allied Veterans gave customers an electronic "scratch-off" ticket when they bought Internet time, and the winners could only be revealed on a computer in the Internet cafe.
Several prosecution witnesses, customers of the cafes said they thought they were gambling and seemed confused to hear in court that they were simply learning from the computer whether their tickets were winners.
"The use of the computer was a fun way to find out whether you won or lost," said Daniel Leising, a former assistant state attorney in Volusia County.
Leising said he met with Mathis and found that the Internet cafes followed state law.
Jacksonville attorney Ed Akel said that while Mathis was listed as the registered agent for Allied Veterans, that did not make him a partner or give him a business interest in the company that took in $300 million as a veterans' charity, while giving only 2 percent, or $6 million, to veterans Ė the same amount Mathis made in legal fees.
The prosecution wrapped up its case Monday, several weeks shy of the four-week estimate.
The defense has a list of nearly 400 witnesses to choose from and will present at least six witnesses today, Stone said.
Jacksonville's retired deputy general counsel testified Wednesday that the sweepstakes games in the Allied Veterans of the World Internet cafes were legal.