Internet sweepstakes cafes fail to get enough signatures

New regulations take effect immediately

The Committee to Protect Ohio Jobs failed to collect the roughly 71,000 additional valid signatures to put a question before voters on Internet cafes. Lawmakers have compared them to illegal gambling.

COLUMBUS — The effort to let voters have the final say on a new law cracking down on hundreds of Internet “sweepstakes” cafes in Ohio fizzled Thursday.

The law designed to make it tough for the businesses to survive takes effect immediately, and state Attorney General Mike DeWine warned, “We will be watching.”

Café operators and their supporters gave up after it became clear the petition circulation firm it hired had not gathered the roughly 71,000 valid signatures of registered voters needed to fill a gaping hole in their initial petitions filed last month

The group, however, said it is keeping its options open for a potential court challenge to the law.

“As the first statewide ballot issue committee to operate under new, more onerous rules regarding signature collection in Ohio, it appears that the 1851 Center for Constitutional Law was correct when it recently filed a lawsuit challenging these rules as an unconstitutional infringement of Ohioans’ right to petition their government,” reads a statement from the cafes’ Committee to Protect Ohio Jobs.

“Simply put, never before has it been so difficult for Ohio citizens to place an issue on the ballot,” it reads.

The cafes, which dot downtown and strip mall storefronts across the state, will not disappear overnight, but House Bill 7 is designed to remove the profit motive from their sweepstakes machines. The law bans cash payouts and caps the value of noncash prizes at $10.

Mr. DeWine and many lawmakers contend the sweepstakes machines look and operate too much like slot machines, which are legal in Ohio only at four voter-approved casinos, including Hollywood Casino Toledo, and, in another form, at racetracks.

Mr. DeWine said his office, which now has regulatory authority over the cafes’ sweepstakes machines, will send the businesses information on the law’s provisions.

“Internet sweepstakes cafés have long had operations that raised suspicions of illegal gambling,” Mr. DeWine said. “Ohio now has a law which makes clear which activities are legal and illegal in these cafes, and we will not hesitate to enforce the law.”

The group representing café owners, employees, software suppliers, and some supporters in local government had filed nearly 434,000 signatures with Secretary of State Jon Husted’s office last month. But just 37 percent proved to be valid following a review by county boards of election.

Thursday ended a 10-day grace period for the group to patch the hole to reach the minimum of about 231,000 signatures to qualify for the ballot. The petitions had also fallen short of gathering a minimum showing of support in at least half of Ohio’s 88 counties. It qualified in 12, including Lucas.

“House Bill 7 is a well-reasoned bipartisan measure that gives law enforcement officials strong tools to fight illegal gambling and other serious criminal activity occurring at many Internet cafés,” said Carlo LoParo, spokesman for the opposition group Ohioans Against Illegal Gambling.

“The push by café owners to halt this important law came up short because Ohioans refused to aid and abet a known criminal enterprise,” he said. The opposition counts several law enforcement groups as well as casino and racetrack owners among its members.

Café operators had argued that they are not gambling operations and that the sweepstakes machines are promotional devices to help them sell long-distance phone cards and Internet time. They argued that the cards are preprogrammed with prizes and never lose their value, so there was no risk when they were played.

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