New Internet cafes on hold

COLUMBUS – A bill that would immediately halt the expansion of Internet cafes in Ohio cleared a legislative panel Tuesday evening by an 11-0 vote and was headed for a vote by the full state Senate.

The measure would extend a current moratorium on the opening of new sweepstakes gambling operations until June 2014, as lawmakers consider a ban on the facilities. The legislation also would require operators of current facilities to file more thorough affidavits of existence with the state. And those who don’t submit a new affidavit could face a fine of up to $1,000 a day.

The state’s attorney general could also prosecute an operator or employee for providing false information on the new form.

Still, local lawmakers aren’t satisfied.

“That’s a good start but still at the end of the day we need to deal with the industry as a whole. I think the best way, and the most clear cut way to end this conversation for good is to get it on the ballot,” Sen. Joe Schiavoni, D-Boardman, said. He called Internet cafes a form of “unregulated gambling” that needs regulation.

“Doing nothing is the worst thing,” Schiavoni said. “All that’s going to do is stop future business from opening.”

On Monday, Schiavoni released a resolution that, if three-fifths of the House and Senate approve, would place an initiative on the ballot in November to allow Ohioans to decide the fate of Internet cafes. This would place control of Internet cafes in the hands of the Ohio Casino Commission or result in their prohibition.

“We need to ask Ohioans if they want these and if they do want these have the casino commission run these as a legal form of gambling. If Ohioans don’t want them, then end of the story,” Schiavoni said.

“We need to get something done, and get something done quickly,” Schiavoni said.

A full Senate vote could come today. Should it pass, the bill would then go to the House for consideration.

Ohio Attorney General Mike DeWine calls the cafes illegal gambling operations and wants them shut down. The industry calls them legal. Patrons buy cards for phone and Internet time with chances to play computer games that operate like slot machines with cash prizes.

DeWine told the committee in testimony Tuesday that the operations were “mini casinos.” He described them as unregulated and a drain on law enforcement resources.

“I believe they’re consumer rip-offs,” he said.

At the urging of some of the state’s top law enforcers, Ohio Senate President Keith Faber said last week that a majority of his Republican caucus now agrees the cafes are involved in criminal activities, including illegal gambling, and should be outlawed.

DeWine, also a Republican, led a raid on six of the facilities in the Cleveland area in the wake of a pivotal 8th District Court of Appeals ruling that concluded the operations were obvious gambling schemes. He said prosecuting these cafes is complicated and costly, and police already have their hands full with everything from overdose deaths from heroin and illegally obtained prescription painkiller sales to child abuse and child pornography investigations.

“That to me is the most compelling reason,” he said, appealing to the committee to support the ban.

Faber has said he expects the ban to move quickly. The House passed a similar proposal earlier this year and cleared a bill last year to regulate the facilities.

As of Tuesday, more than 620 cafes are currently operating in the state, according to the attorney general’s office.