For the past two years, Ohio lawmakers have dawdled over regulations on Internet cafes or sweepstakes parlors. The delay has created an unfortunate opening for the industry to portray the storefronts as legitimate small businesses, mom-and-pop operations that create jobs and offer a convenient, inexpensive alternative to big-time casino gambling.
Mike DeWine, the state attorney general, and law enforcement officers paint a far darker picture, the lack of state regulations, background checks and rules governing payouts creating fertile ground for consumer rip-offs, money laundering and other criminal activity.
A recent investigative report by the Columbus Dispatch strongly reinforces the need to regulate tightly the cafes, numbering more than 800 across the state. Patrons buy phone cards and Internet time to play computerized sweepstakes games on devices that look like slot machines. DeWine calls the cafes “mini casinos.”
What the Dispatch found were dozens of sweepstakes operations run by people whose financial records (such as bankruptcies and tax liens) would likely bar them from working at one of Ohio’s four casinos, subject to strict state oversight. Other sweepstakes operators had criminal backgrounds, such as theft, gambling and drug trafficking, that would bar them from working in a casino.
What’s more, some operators failed to register, as required by law, with the Ohio secretary of state, and more than half provided no information other than a street address when responding to an affidavit requested by DeWine’s office last year to obtain more information.
The Dispatch also reported disturbing news that a local center that treats compulsive gamblers now finds that two-thirds of those seeking help say they like to play sweepstakes games, hardly evidence of sweepstakes providing a harmless diversion.
The House now has taken up a bill that stalled in the Senate at the end of the past legislative session. The evidence uncovered by the Dispatch underscores the need for lawmakers to look past the crowd of sweepstakes industry lobbyists and bring these mini-casinos under strict control.