COLUMBUS — In an issue that divided Republicans and Democrats, the Ohio House on Wednesday rushed a lame-duck session vote on a bill severely cracking down on Internet “sweepstakes” cafes.
Rep. Matt Huffman (R., Lima) said he expects the bill to all but eliminate such cafes.
“If it’s acting like gambling, we need to treat it that way,” he said.
The House voted 63-30 across party lines to approve House Bill 605, which bans cash payouts and places a $10 cap on the value of other prizes awarded from buying the long-distance phone cards that are used to play electronic games.
The House rushed the vote to give the Senate time to consider it next week before the expected end of the two-year legislative session.
“Personally, I think it’s very disturbing that this committee is preparing to eliminate 4,000 jobs without careful study of this industry — the negative impact that it would create, especially for a lot of people at Christmas time,” Robert Dabish of Oregon told the House Judiciary and Ethics Committee before it narrowly voted to send the bill to the full House.
The grocery store co-owner also owns more than 20 cafes under the name Players Club Inc. in Ohio, including four in Toledo and Oregon.
He said large signs inform patrons in his cafes that they are buying phone cards and that the “sweepstakes” attached to those cards are a promotional tool to sell those cards.
The cards are preprogrammed. The buyer could immediately turn around and try to cash out the card to see if he or she won anything, but many use them to play on-site computerized machines that critics argue look and act too much like slot machines.
After his testimony, Mr. Dabish said the largest cash value possible from one of those phone cards is $4,200. He supports separate proposed legislation, House Bill 195, to regulate the businesses rather than put them out of business.
He questioned the concept of placing a $10 cap on the value of noncash prizes, which supporters of the bill believe would be too low a threshold to generate much interest among potential players.
“Would you go to Pepsi or McDonalds and tell them they can only give $10 when they give out $1 million cash?” Mr. Dabish asked. “Why are you letting other companies, because they’re big multibillion-dollar companies, get away with it and not us?”
In 2009, a Toledo Municipal Court judge threw out misdemeanor gambling charges filed against Mr. Dabish in connection with his East Toledo cafe, ruling that the phone/sweepstakes card was a clever promotion rather than illegal gambling.
One of Mr. Dabish’s cafes was charged as part of a gambling sting in Fremont earlier this year. Those charges were eventually dismissed as the city opted instead to regulate and license them in the absence of clear state law. The Players Club was the only one of the three cafes caught up in the sting to later reopen in the city.
Some members of the committee laughed out loud when they learned that the city returned computers, gaming machines, and other equipment to the businesses but not the $22,000 in confiscated cash.
“There was some kind of agreement worked out where the cash would be awarded to the city of Fremont, although the city of Fremont was going to use that money to help cover the cost of the establishment itself for fees and other costs,” said Sean O’Connell, a Sandusky County sheriff’s detective who was a Fremont police officer at the time of the sting.
Contact Jim Provance at: email@example.com or 614-221-0496.