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Bills targeting Internet cafes advance

Business owners say prize limits will shut them down.

State lawmakers moved closer Tuesday to shutting down hundreds of Internet sweepstakes cafes operating in Ohio.

Two bills are headed to floor votes as early as today: One would essentially ban the storefront gaming centers and one would extend the moratorium on new cafes and strengthen reporting requirements.

Both bills have already passed one chamber and were assured speedy approval when Senate President Keith Faber, R-Celina, pledged in April the Senate would pass both by June.

In a 7-4 vote, the Senate State Government Oversight and Reform Committee approved House Bill 7, which would limit prize payouts to less than $10 and require cafes to register with the Ohio Attorney General’s office. Cafe owners said the prize limit would force them to close their doors. The bill passed the House in March in a bipartisan vote, 66-29.

Committee chairman Sen. Dave Burke, R-Marysville, said he expects the bill to clear the Senate. Burke said he had visited a cafe and did not have a negative experience there, but that doesn’t mean cafes are legal.

“This thing’s an onion and we’ve crafted what we believe to be the best solution,” Burke said after the vote. “Is it the best solution? The judicial process will tell us.”

Lawmakers did not change the bill, despite requests from proponents to add an emergency clause. Emergency legislation takes effect immediately, without the 90-day grace period, and is not subject to referendum. Adding an emergency clause requires two-thirds of the vote in each chamber.

Without an emergency clause, the well-funded industry could back a referendum for the November 2014 ballot. Ohioans gave the green light to four casinos in a 2009 ballot initiative.

Internet cafes sell phone cards or other products that can be used to win prizes by playing slots-like games on computer terminals. Cafe owners say they offer entertainment for a largely elderly clientele and boost the economy by paying sales tax on their products. Law enforcement officials say the cafes are rife with criminal activity including money laundering.

Cafe owners and employees filled the Senate hearing room Tuesday evening to plea with lawmakers one more time not to close down the industry and eliminate what they estimate to be as many as 8,000 jobs.

“These customers rely on us on a daily basis for companionship and we’ve created that atmosphere in all of our establishments,” said Jody Spurrier, who manages a cafe in Alliance. Spurrier and a half dozen others told lawmakers the actions of a few bad apples do not speak for the whole industry.

Hours before the Senate committee vote, a House panel approved Senate Bill 115, sending it to a floor vote. The bill would extend the current moratorium on new cafes set to expire June 30 one more year, requires more reporting data and establishes daily fines for non-compliance.

Florida banned the cafes last month, after a group claiming to operate cafes to benefit veterans’ causes was found to have pocketed most of the revenues. Law enforcement there arrested 57 people in connection to what was described as “illegal casinos.”

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