Ohio Senate eyes Internet cafe bill

Plan would remove profit motive, shutter operations

5/8/2013

COLUMBUS — Owners of Internet sweepstakes cafes on Tuesday tried to reverse what appears to be a march in the Ohio Senate toward putting them out of business.

Having already sent the House a bill buying them a little time, senators have turned their attention to a separate bill that would ban cash payouts from the cafes’ “sweepstakes” machines that critics claim are illegal slot machines in disguise. The bill would cap the non-cash value of other prizes at $10.

House Bill 7, sponsored by Rep. Matt Huffman (R., Lima), is designed to remove the profit motive from the games and, for all intents and purposes, put an end to the hundreds of these cafes that have sprung up in downtown storefronts and strip malls across the state.

Robert Dabish of Oregon, the largest operator of Internet cafes with 20 in the state and four in Toledo and Oregon, was the subject of a Toledo Municipal Court case that determined that the activity at one of his cafes in the city was not gambling but rather sweepstakes promotion for a product, long-distance phone cards.

The decision, which ultimately was upheld by the 6th District Court of Appeals, stands in contrast to a recent decision by the 8th District Court of Appeals in Cleveland that came to the opposite conclusion when it came to cafes there.

Speaking before the Senate State Government Oversight and Reform Committee, Mr. Dabish questioned how his business could be considered gambling when his customers can’t lose.

“You walk in there and you spend $10 on your phone card,” Mr. Dabish said. “You walk out of there with a $10 phone card.

"You don’t lose any face value on it whatsoever.”

With the card comes 1,000 sweepstakes points that customers can play on electronic machines that Attorney General Mike DeWine and other law enforcement argue look and act too much like slot machines.

The card is preprogrammed as a winner or loser, Mr. Dabish said, noting that customers don’t have to play the games to find out the results.

He said his cafes employ about 100 people total and remit about $1 million in sales taxes a year to the state.

Sen. Bill Seitz (R., Cincinnati) is among the committee members who would prefer to regulate the businesses rather than kill them off.

“Regulation is preferable to the approach of this bill, which is essentially shoot ’em all and let God sort it out,” he said. “I fear I may be outnumbered.”

Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.