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Monday, July 28, 2014
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Published: Monday, 2/11/2013

EDITORIAL

Overdue regulation

Internet sweepstakes cafés are near the top of the Ohio House’s agenda this year. The prize should be legislation that draws a bright line between legitimate sweepstakes promotions and gambling by another name.

There are about 800 Internet cafés in Ohio, including two dozen or more in Toledo. Café owners claim they are in the business of selling Internet access or telephone time. They say the “sweepstakes” they offer are merely promotions to bring in customers.

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Patrons play games that look remarkably like slot machines to find out whether they are among the sweepstakes’ predetermined winners. Ohio Attorney General Mike DeWine believes that activity may cross the line between legal sweepstakes and illegal gambling.

Regulation of Internet cafés should have occurred last year. The House overwhelmingly passed a bill in December that would have limited prizes to $10 and prohibited cash awards. But Senate leaders let the bill die, saying it also could have banned sweepstakes such as those operated by McDonald’s restaurants.

A new version of the bill seeks to address such concerns by tightening definitions and permitting waivers for business with genuine customer-rewards programs. Internet café owners complained that the previous legislation would have driven them out of business, much as many restaurant and bar owners said — incorrectly, as it turned out, about Ohio’s ban on indoor smoking.

Even regulation that allows the parlors to stay open would seem an unwarranted expansion of the constitutional amendment Ohio voters approved in 2009 to allow casino gambling in Toledo, Columbus, Cleveland, and Cincinnati. Gov. John Kasich’s administration has taken liberties with that law, allowing Ohio’s seven horse-racing tracks to install thousands of slot machines.

Some Ohio communities have passed their own ordinances to control the growth of Internet cafés. Toledo’s attempt last year to require café owners to obtain licenses or face fines resulted in only a handful of applications and, as of the end of November, no fines.

Internet cafés divert money from churches and fraternal organizations that operate bingo and other legal gambling. These groups are strictly regulated and are required to give part of their proceeds to charity. The sweepstakes stores are mostly in poor neighborhoods whose residents are least able to afford to throw their money away.

Several cafés have been accused of making illegal cash payouts. Law enforcement officials say the quasi-gambling storefronts attract criminal activity. Mr. DeWine told a state House panel last year that the cafés are susceptible to organized crime.

A statewide moratorium on new Internet cafés runs out in June, so lawmakers need to act soon to regulate them. Even people who want to open questionable businesses deserve to know what the rules are before they gamble their money on a new enterprise.



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