A House panel on Tuesday gave initial approval to a bill that would effectively ban internet sweepstakes cafe parlors in Ohio.
There are more than 800 of the gambing sites in the state, according to filed affidavits with the Attorney General’s office last year. More than 100 of them are located in the Miami Valley.
House Bill 7 does not explicitly outlaw the establishments, but cafe owners and managers say the restrictions would put them out of business.
Under the bill, sweepstakes cafes could not award prizes worth more than $10.
Cafe owners pleaded with lawmakers on the House Policy and Legislative Oversight Committee to regulate the games like the state regulates casino and lottery games.
Another bill, House Bill 195 would recognize and regulate the industry and require background checks of owners, vendors and key employees and was just introduced Tuesday.
Under that bill, cities and townships could enact local bans, sweepstakes cafe owners would have to disclose odds of winning and submit independent third-party lab analysis of their software and employees would be subject to criminal background checks. The bill is co-sponsored by Reps. Ron Maag, R-Lebanon, and Matt Lundy, D-Elyria.
“This legislation would allow internet cafes to remain open but would provide for necessary regulations to keep undesirable elements out of this industry,” Maag said in a statement. “I believe this is preferable to outlawing them, as they employ many people across the state.”
Jim DelTorto, who owns Game On Business and Sweepstakes in Summit County, said cafe owners want to be regulated.
“It keeps us alive,” DelTorto said. “The alternative is we’re out of business.”
Sweepstakes cafes sell an object such as a phone card that comes with chances to win cash prizes after playing computer games that resemble slot machines.
Law enforcement supports banning the cafes because they are ripe for money laundering and other criminal activity, and faith groups support the bill because they consider the sweepstakes cafes to be a form of gambling.
Sandy Theis, spokesperson for Citizens Against Gambling Expansion, said the Ohio Constitution explicitly allows operation of casinos and slot-like video lottery terminals at racetracks under the Ohio Lottery Commission.
“Any other venue that would give this authority to these machines would be unconstitutional,” Theis said. “We think this a victory for the cops and the consumers, but this is just round one.”
House Bill 7 could be put to a full House vote as soon as Wednesday but could face difficulty passing the Senate, which chose not to act on similar legislation last year.