Hundreds of Internet sweepstakes cafes across Ohio would be closed under a bill moving through the state Senate and lawmakers are being asked to return all campaign donations from the industry.
Senate President Keith Faber told reporters Wednesday that senators will fast-track House Bill 7, which would effectively ban the estimated 800 establishments. The bill passed the House with bipartisan support last month.
The Miami Valley is home to an estimated 100 cafes, which sell phone cards and other products that can be used to play slots-like games on computer terminals. The bulk of the local cafes are in Montgomery, Clark and Butler counties. Those three counties alone have 80 internet cafe locations.
Faber said the Senate will immediately seek to extend the moratorium on new Internet cafes and plans to pass the ban in May. Faber called the cafes illegal gambling establishments and asked senators to return any campaign contributions from the industry. Faber plans to give back about $1,500.
Earlier this month, Republican Sen. Dave Burke of Marysville, said the Senate had no plans to rush the ban, estimating it might pass next year after further study. Attorney General Mike DeWine and law enforcement officials pleaded with lawmakers not to wait and began cracking down on the industry with the help of an appeals court decision ruling Internet cafes illegal.
Faber, R-Celina, said his views were swayed by discussions with law enforcement and a recent decision from the 8th District Court of Appeals ruling several Cleveland-area cafes were illegal businesses operating like casinos.
“We’ve been given enough information at this point to make an informed decision about how to proceed,” Faber said. “I am convinced that these entities are not only illegal but that many of them also engage in criminal activity within their facilities.”
Last week, law enforcement officials raided several Cuyahoga County cafes and seized computers and bank accounts as the result of an ongoing investigation. A Cuyahoga County grand jury indicted 11 people and eight companies, including New Jersey-based VS2 Worldwide Communications, on charges related to illegal gambling and money laundering.
Sam Ferruccio, attorney for phone card and sweepstakes company Pong Marketing, said officials should crack down on those breaking the law but not all operators are criminals.
“There are good, hard working small business owners who are conducting legitimate sweepstakes in Ohio,” Ferruccio said in a statement. “Many are licensed by their local communities and paying significant licensing fees. By attempting to close legal sweepstakes stores, the Ohio legislature is eliminating an important source of tax revenue for struggling local governments.”
Internet cafe owners have said they run legitimate businesses that sell products, offer entertainment for a mostly elderly population and the games played are games of chance, not skill. Cafe owners estimate the industry employs between 3,000 and 7,000 people in Ohio and employees filled statehouse hearing rooms wearing shirts saying, “Regulate, don’t eliminate.”
Internet cafe customer Morris Holloway, 68, of Springfield, said the state should regulate Internet cafes, not shut them down. Holloway visited the Players Club at 1881 S. Limestone St. in Springfield on Wednesday, as he does most days.
“This gives me something to do besides golfing, going to the bar, or whatever,” said Holloway, who is retired. “These things are just a fun outlet, and I think that’s how most people who visit them feel.”
A panel of senators chose not to approve the ban at the end of last year and wanted more time to evaluate the establishments and whether the games constitute gambling.
A spokesman for Senate Democrats said they had not discussed the issue or returning campaign contributions.
The moratorium extension, which Faber said will require cafe owners to submit information or face fines, is slated for a Senate panel discussion on Thursday.
Staff writer Andrew J. Tobias contributed to this report.
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Internet cafes in the Miami Valley by county
Source: Ohio Attorney General’s office