Internet cafes are bracing for a city-wide ban on sweepstakes terminal devices that begins in October.
Last December, city commissioners voted 3-2 to a delayed ban of the computers used at Internet cafes, which could force several businesses to close when the ordinance takes effect in seven weeks.
Internet cafes and game rooms typically offer phone cards that can be purchased for time on computers and also includes sweepstakes entries for games where cash payouts are awarded. State and local lawmakers believe the computers are designed to take advantage of loopholes in Ohio’s gaming laws.
City law director Jerry Strozdas said Internet cafes haven’t been on the city’s radar since the ordinance was enacted, officials hope the businesses are prepared to comply.
“We’ve really just been sitting and waiting, assuming people will follow the law, which our ordinance requires them to do,” he said.
The ban was delayed, Strozdas said, to give businesses time to comply. City officials were also aware the state was working on possible legislation to regulate the industry.
“We wanted to give folks time to terminate leases and do whatever they had to do to close up,” Strozdas said.
City Commissioner Kevin O’Neill, who voted against the ban, said he hopes the city will extend its delayed ban to mirror possible regulations by the state in the coming months. He said he plans to bring it up at a future city commission meeting.
“I don’t want to see them close because we’re talking about middle-class employees,” O’Neill said.
Officials thought three Internet cafes were located within the city limits but the number is higher. Affidavits filed through state Attorney General Mike DeWine’s office show 782 Internet cafes or sweepstakes parlors in Ohio, including 25 in Clark County.
Of those 25, 14 are located within the city limits, according to the affidavits. Three businesses call themselves Internet cafes, while other businesses like bars, drive-thrus and restaurants offer similar computer devices.
Last week, DeWine reiterated his belief the Ohio General Assembly should adopt regulations on Internet cafes and sweepstakes parlors. He believes the assembly must define the sweepstakes law in Ohio, establish a state-mandated payout, require certification of software and equipment, establish a computer system which monitors all machines in the state and the designation of a state agency to oversee the parlors. He also believes parlors should pay taxes and license fees.
According to the Ohio Department of Taxation, operators selling prepaid phone cards and Internet time must have a vendor’s license and pay state and local taxes — and it’s unclear if all cafes who filed affidavits are doing those things.
DeWine, in a press release, said it’s easy to see why Internet cafes have exploded at an “alarming rate” and the Ohio General Assembly should act to regulate them.
“They get people to buy these products by tying them to games that look like slot machines, but the owners call them sweepstakes because Ohio has no sweepstakes law,” DeWine said in a statement.
The state Senate and the state House of Representatives each have bills in the early stages of development in committees of each respective body, Senate Bill 317 and House Bill 195. DeWine prefers HB 195, which mirrors his beliefs on Internet cafes, but said some form of regulation is needed.
“He’d rather see the Senate Bill enacted rather than no regulation at all,” said Attorney General spokesman Dan Tierney.
State Sen. Chris Widener, R-Springfield, said he supports legislation to regulate Internet cafes to help them stay open.
“We can’t as a state have unregulated gaming when we have an entire gaming commission now to regulate, monitor and to secure everything from casinos to slot machines at the race tracks,” Widener said. “These things have to be a part of the regulated process if they’re going to exist in the state of Ohio.”
Although no Internet cafe owners were available to talk to the News-Sun, employees at those establishments said it’s been business as usual since the ban. Esdonna Howard, an employee at World Internet Cafe, 1812 S. Limestone St., said she hopes the business will be able to operate.
“I don’t think it’s going to go anywhere to be honest,” Howard said. “I think we’re still going to be here.”
Howard said business is great with close to 100 customers per day.
“We’re just waiting for October to come and see what happens,” Howard said.
Bill Johnson, an employee at Knight’s Internet Cafe and Phone Center, 1062 Upper Valley Pike, said he wasn’t aware of the ban by the city. He believes they’re doing nothing wrong and believes the state will eventually regulate the industry.
“There’s nothing we’re doing here that’s illegal,” Johnson said. “It’s the customers choice where they choose to go. A lot of our customers are older people.”
Johnson said the opening of several casinos and racinos at horse tracks in Ohio haven’t affected business.
“It hasn’t had any effect on us,” Johnson said. “We have good days and bad days. It just comes and goes like any other business, pretty much.”
Clyde Pack, 71, of Springfield, said he’s been spending about four hours per week going to Internet cafes. Pack said he spends most of his time taking care of his wife, and the Internet cafes provide an escape. He said he spends about $50 per week at the cafes.
“I’m not a bowler, and I’m too old to be playing ball,” Pack said, “but I can sit down and enjoy this, and I if win, that’s great. If I don’t, I already know I’m going to spend the money.”
He said he doesn’t feel the state should be able to regulate gaming at local Internet cafes.
“It’s something that everybody chooses to do,” Pack said. “It doesn’t matter if it’s here or at the casino in Columbus. To me, being retired and living here pretty close, I like going to place a like this and I meet a lot of people as well. At the (casinos), they don’t socialize like these smaller places do. Over there, they’re like total strangers. The smaller places like this should stay open. It’s a place for the elderly, really.
“They’re just doing it for fun,” Pack said.