Ohio Takes Aim at So-Called Internet Sweepstakes Cafes

Ohio is the latest state to seeks a legislative solution to the issue of Internet sweepstakes cafes.

According to a report in the Columbus Dispatch, Ohio lawmakers have agreed on a bill that would rewrite state laws to effectively shut down the estimated 600 Internet cafes that offer a form of sweepstakes-based gambling.

Bill likely to soon become law in Ohio

The next step for the bill in the legislative process is the governor’s desk, where Gov. John Kasich is expected to sign it into law.

Rather than outlaw the cafes entirely, the bill simply limits the from a machine to a maximum of $10.

Some in Ohio government argue that no new bill is needed, contending that current law prohibits Internet sweepstakes cafes in their current form. But enough ambiguity existed in the gambling laws of Ohio for such cafes to not only operate, but thrive.

It was, in fact, the success of such businesses which brought about the attention of Ohio officials. With new cafes opening at a rate that rivaled Starbucks and McDonalds, the situation simply grew to a point where the amounts of money involved were simply too great to ignore.

Other states have seen mixed results from cafe crackdowns

Ohio is far from the only state grappling with the issue of sweepstakes cafes. California is considering legislation that would outlaw the now-ubiquitous outlets.

Florida is ahead of both states, having passed anti-cafe legislation in early 2013. But while the law successfully shuttered many of the establishments that it targeted, there have also been some unintended consequences.

For example, the Bradenton Herald reports that businesses with little direct tie to gambling – such as Dave and Busters and Chuck E Cheese – could be running afoul of the new Florida law. And the Herald goes on to note that the AARP recently blocked residents of Florida from entering any sweepstakes-based promotions as a direct response to the law.

Online poker players in Florida also saw an unintended impact of the new anti-cafe law when subscription-based online poker site Club WPT – one of the few online poker rooms accepting US players – decided to exit from the state rather than risk the legal exposure brought on by the law’s broad nature.

Ohio could dodge Florida’s woes

One thing that Ohio’s approach to Internet cafes has going for it: the bill is far more narrow in scope than Florida’s bill. It’s important to remember that the political controversy that accompanied the legislative push to outlaw sweepstakes cafes resulted in a sweeping measure, designed to proactively discourage anyone from finding any sort of loophole in the law.

Ohio’s law, by contrast, takes a simpler approach by removing the financial incentive for sweepstakes cafe operators. With the new minimums, it’s expected that sweepstakes cafes won’t be able to generate the turnover sufficient to run a profitable business.

And that will likely be the case right up until the next clever businessperson spots a new opening in Ohio gambling law. Keep an eye on our online gambling news reports for continued coverage.