Ohio moves forward with crackdown on Internet sweepstakes cafes

Ohio Attorney General Mike DeWine sent letters to more than 600 establishments on Wednesday asking them to submit new affidavits under the new law, which extends the current moratorium on new Internet cafes through June 2014.

“These affidavits will provide valuable information to the Attorney General’s Office and to local law enforcement to enforce Ohio’s gaming laws,” DeWine said in a written statement. “I thank Governor Kasich and the General Assembly for keeping and strengthening this moratorium as we prepare for House Bill 7 to become effective.”

Internet cafes sell phone cards or other products that can be used to win prizes by playing slots-like games on computer terminals.

More than 800 sweepstakes terminal operators filed affidavits in 2012 under the state’s first action against the industry, but many did not include names of store owners and other information. About 100 establishments in the Miami Valley submitted some information.

The new affidavit asks for federal tax ID numbers as well as the names of all cafe employees or business partners and must be notarized. Failure to comply is punishable by a fine of up to $1,000 per day.

A list of the cafes that filed in 2012 and a copy of the new affidavit are available on the attorney general’s office website.

House Bill 7, the bill that would effectively ban sweepstakes cafes, is expected to be signed by Kasich soon and would go into effect 90 days from that date. The bill limits prize payouts items to be worth less than $10, which cafe owners say will put them out of business. The bill also authorizes the Bureau of Criminal Investigation to investigate possible criminal activity at the cafes.

Kasich spokesman Rob Nichols said the governor plans to sign the ban within the week.

“We’ve said from the beginning that Internet cafes are in fact gambling and we’ve been concerned with both their explosive proliferation and predatory nature,” Nichols said. “We’re glad that the legislature has decided to rein them in.”

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