September 21, 2014

Medina
Showers
58°F

State bans Internet cafes, opponents say jobs lost

Staff and wire reports

COLUMBUS — Storefront sweepstakes parlors appear on their way out in Ohio after state lawmakers delivered a one-two punch Wednesday to effectively ban the businesses statewide and block new startups until the ban takes hold.

The Ohio House and Senate played a part with passage of a pair of bills, defying opponents who successfully had blocked earlier attempts at a crackdown.

The Senate voted 27-6 on the crackdown after hearing hours of testimony this spring from employees and owners of the so-called Internet cafes who said it unnecessarily would cost the state jobs.

Meanwhile, the House voted 76-14 on a bill extending an existing moratorium on any new parlors and requiring those in operation to submit new affidavits to the state.
Republican Gov. John Kasich is expected to sign both bills.

Two local owners of cafes in Brunswick and Wadsworth declined to comment on the legislation when reached by telephone on Wednesday.

Medina County has 10 Internet cafes, according to state Attorney General Mike DeWine.

More than 620 Internet cafes are in operation across the state, representing growing competition to legalized casinos and games held for charity.

At the storefronts, patrons buy cards for phone and Internet time with chances to play computer games that operate like slot machines with cash prizes.

Proponents strenuously have argued that Internet cafes are operating legally, a position intermittently undercut by the courts. While acknowledging the existence of “a few bad actors,” they describe most of the cafes as harmless mom-and-pop businesses that are doing nothing wrong.

State Sen. Bill Seitz, a Cincinnati Republican, delivered what he said was a eulogy for the industry, and he estimated 6,000 to 8,000 people would be put out of work because of the legislation.

An opponent of the bill, Seitz said many cafes could be regulated through proper licensure and taxation.

“The single biggest flaw in this bill is that it takes the approach, ‘shoot them all and let God sort it out,’ ” he said.

He questioned whether the measure was a nonissue, saying he hasn’t received any complaints from his constituents about them.

State Sen. Jim Hughes, a Columbus Republican, cautioned that no single law enforcement agency had jurisdiction or authority to investigate or pursue criminal charges statewide for any illegal activity at the cafes.

“There’s no safeguards that apply to Internet cafes, which leaves this industry open for a multitude of unregulated activity, such as money laundering and other crimes,” Hughes told his colleagues as he urged support for the bill.

DeWine has taken the position that the cafes are illegal gambling operations and recently stepped up his own crackdown out of frustration at a lack of legislative action.

He has sued three facilities that failed to file affidavits after the 2012 moratorium took effect and staged raids of facilities in Cuyahoga and Richland counties. The push to prosecute led to indictments against 11 people and eight companies in Northeast Ohio last month.

DeWine joined other top state law enforcers at a pivotal caucus meeting in April with Senate Republicans that helped reverse members’ earlier opposition.

Afterward, GOP Senate President Keith Faber introduced the moratorium bill and said his caucus also was ready to move forward on the ban.

DeWine praised the Legislature for passing the two bills Wednesday, and said he looked forward to seeing the governor sign them into law.

“This clarity will make it easier for local law enforcement to enforce Ohio law,” he said in a statement.