Ohio Senate extends freeze on Internet sweepstakes cafes

5/2/2013

COLUMBUS — The Ohio Senate on Wednesday voted to extend the moratorium on the opening and expansion of Internet sweepstakes cafes.

But the unanimous support for the moratorium belies disagreement in the chamber over how it should proceed next in dealing with businesses that Attorney General Mike DeWine and other law enforcement contend are illegal gambling operations.

“We need to extend this moratorium to make it clear that we don’t wish to have new gaming facilities on every single street corner all across Ohio,” said Senate President Keith Faber (R., Celina), the bill’s sponsor.

The moratorium bill moves to the House, which has already approved House Bill 7, designed to put the establishments out of business. The moratorium would buy the Senate time while it considers the House bill, which would remove the profit motive from such businesses by prohibiting cash payouts from sweepstakes machines and capping the dollar value of non-cash prizes at $10.

Sen. Joe Schiavoni (D., Youngstown) supported the moratorium, but he prefers putting the issue to voters.

“My expectation is that we’re going to move toward House Bill 7 as the final vehicle, but you never know,” Mr. Schiavoni said. “I’m just providing another option… In order to expand gambling, it would have to be a constitutional amendment that would have to be passed by the voters.”

Mr. DeWine has argued that these sweepstakes machines look and act a lot like slot machines, which are legal in Ohio only at the four voter-approved casinos and, in a different form, at racetracks.

The business operators, however, counter that the machines are simply tools to help them sell their real products, long-distance phone cards and Internet time. They say the machines are not illegal games of chance because the cards used to play them are preprogrammed with prizes.

A current moratorium on the opening and expansion of the businesses will expire on June 30. The new moratorium will continue through June 20, 2014, but the 800-plus businesses that have already registered with the state will have to file new affidavits containing additional information on the owners, employees, and operations of the business.

It also authorizes the attorney general to impose fines of $1,000 for every day that one of those businesses fails to file a new affidavit.