Staff Report

FAIRHOPE, Ala. — A Fairhope nightspot was raided early Sunday morning by Fairhope police, an officer from the Gulf Shores Police Department and enforcement agents with the Alabama Alcohol Beverage Control Board (ABC). The team served a search warrant at the Jubilee Lounge, 902 Morphy Ave., where police stated they had earlier witnessed illegal drug sales and gambling.

Authorities allege that lounge employees sold powder cocaine several times within the past month to officers who were there working undercover. Those same officers also reported they had observed illegal gambling machines in operation while they were inside the establishment.

The officers entered the business at 1:30 a.m. and arrested employees they say were involved in the illegal activities. They also rounded up two customers. Patrons of the bar not allegedly taking part were identified and then allowed to leave.

Members of the team seized six video gambling machines as evidence. According to the report filed by the undercover officers, the machines were equipped to accept both paper currency and coins. The machines then reportedly dispensed tickets to winning gamblers, who redeemed them for cash winnings from the business.

Four men were arrested and booked on various charges.

Kenneth Joel Daves, 49, of Mobile, a lounge employee, was charged with three felony counts of unlawful distribution of a controlled substance. He was released on a $10,000 bond after being transferred to the Baldwin County Corrections Center.

Diamond Demetric Smith, 37, of Fairhope, was charged with one felony count of unlawful distribution of a controlled substance and one misdemeanor count of possession of marijuana in the second degree. He was also released on a $10,000 bond from the Bay Minette facility.

James P. McKay Jr., 63, of Fairhope, was charged with six misdemeanor counts of possession of a gambling device and one misdemeanor count of promoting gambling. McKay, who owns the lounge, was eligible to bond out from Fairhope.

Kevin Lee Thompson, 37, of Fairhope, was charged with one felony count of unlawful distribution of a controlled substance. He, too, was released from Bay Minette on a $10,000 bond.

Smith and Thompson are not lounge employees, according to investigators.

The operation was conducted by officers of the Fairhope Police Department. The ABC agents were asked to accompany the Fairhope Police Department because drug sales had allegedly occurred in a licensed bar. The Gulf Shores officer took part because he brought along a drug-sniffing canine.