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Café Society Hits a Road Block

Internet café gambling is set to remain a controversial topic with Ohio legislators in 2013. In February, State Attorney General Mike DeWine asked legislators to support regulation of an industry that currently includes 820 Internet cafés across the state.

On one side are claims by law enforcement of thinly disguised gambling venues. On the other are legitimate business concerns employing more than 4,000 people across the state.

What is an Internet café?

Termed a sweepstakes industry, Internet cafés are storefronts. Patrons purchase phone cards or other goods that represent sweepstake points to be used on the Internet or to play sweepstakes games sometimes modeled on slot machines. Sweepstakes outlets are not currently considered gambling venues because the outcome of a sweepstakes game is predetermined — patrons are not technically gambling.

In June 2012, the state enacted a new café sweepstake storefront moratorium to prevent more of these establishments from taking root. Some proponents of radical reduction of the sweepstakes industry argue it diverts funds from regulated enterprises including charitable organizations, legal casinos and the Ohio Lottery.

In December, the House passed a bill limiting Internet cafés to $10 sweepstakes and requiring registry with the Ohio State Attorney General. The Senate refrained from passing the measure with concerns about unintended effects of regulation on businesses like gas stations or restaurants offering sweepstake type products.

Speaking to an Ohio House committee in support of House Bill 7 — introduced by Representative Matt Huffman of Lima — Mr. DeWine noted, I will guarantee you there is money laundering, and I will guarantee you there is organized crime.

The new bill as introduced essentially eliminates profit-producing Internet cafés. Legislated out of business or subject to greater regulation, big changes are coming to the sweepstakes industry in Ohio. If you are concerned about possible criminal charges, contact an Ohio criminal law attorney today.

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