November 24, 2014

Medina
Mostly cloudy
43°F

State moves toward shuttering Internet cafes

By John Seewer

TOLEDO — Ohio is moving toward shutting down hundreds of storefront gambling operations that have sprouted in strip malls and vacant stores, offering computer games that operate like slot machines with cash prizes.

The Ohio House approved a proposal Wednesday that amounts to a virtual ban on the game parlors known as Internet cafes.

It’s been nearly two years since lawmakers first began weighing what to do about these sweepstakes games that are largely unregulated and don’t face the same scrutiny as casinos and other games of chance. Some favored new regulations while others wanted a ban on the Internet cafes.

“Internet cafes are simply gambling by another name,” said state Rep. Dennis Murray, D-Sandusky.

The bill, approved by a 2-to-1 margin in House, would shut down nearly all of the estimated 800 sites by narrowly defining what counts as a sweepstake.

Owners of the Internet cafes said the proposed legislation could mean the loss of as many as 5,000 jobs in Ohio.

Most of the operations are in the northern half of the state. Customers pay for Internet time or phone cards and use them to bet points on computers loaded with games such as poker. The businesses say they sell legitimate products with a chance to win a prize.

State Rep. Kenny Yuko, D-Richmond Heights, said it was the wrong time to crack down on businesses that employ many people and generate tax money.

“Our cities get some valuable dollars that they’re in desperate need of,” he said.

Several cities have sought to close the sweepstakes cafes, only to lose in the courts.

Ohio Attorney General Mike DeWine has led the push to get rid of the businesses, saying there was no guarantee the games were fair and that there was no way to track where the money goes.

Some critics contend the winners are pre-determined. Others complain that they take money away from casinos and charities that offer gambling and are strictly regulated.
It’s unclear whether the state Senate will approve the bill before the legislative session ends this year.

Senate President Tom Niehaus told reporters Wednesday that he planned to review the bill. “We’re going to take a look at it,” he said. “I don’t know what’s in it, but we are going to take a look at it.”

Niehaus said a week ago that he was more inclined to favor regulation rather than an outright ban.

Charities and fraternal organizations such as the Veterans of Foreign Wars that offer gambling and must give a share of their profits to charity have argued that the Internet cafes should at least play by the same rules.

William Seagraves, executive director of VFW of Ohio Charities, said Internet cafes been a big reason why the groups’ charitable contributions from gambling have dropped from $6 million a year to $3.8 million since 2005.

“They kill us,” he said. “They’re just running wild. I’m hoping they get rid of them because it really hurts us.”