The Ohio House last week returned, thankfully, to the pressing matter of regulating sweepstakes parlors or Internet cafes, lawmakers taking up a bill that would clamp down tightly on the storefront operations. Two months ago, the House did the right thing by passing similar legislation, only to see the measure die in the Senate at the end of the lame-duck session.
With a moratorium on new parlors set to expire in June, the legislature must act to bring under control what amounts to an unauthorized, unvoted expansion of gambling. Mike DeWine again pushed forcefully for action, the state attorney general describing the storefronts as “mini casinos.” There are now more sweepstakes devices (about 8,200 in more than 800 parlors) than there are slot machines in the state’s casinos (6,900). Customers purchase phone cards or Internet time to play, the outcomes predetermined.
DeWine believes the storefront operations are illegal. They now are regulated, if at all, at the local level, an ineffective, patchwork approach. At the state level, there are no background checks for operators, no requirement for posting odds, no rules governing payouts. DeWine and law enforcement officials from across the state correctly fear the potential for money laundering, tax evasion and other criminal activity.
The bill reintroduced by state Rep. Matt Huffman, a Lima Republican, would end cash prizes and limit the value of merchandise given as prizes to $10. Those in business could still operate, but they would need an annual state certificate. Only one sweepstakes device (the machines look like slots) would be permitted per establishment.
For now, the sweepstakes parlors hardly qualify as legitimate small businesses. Rather, as DeWine noted, they have skillfully exploited legal ambiguities to proliferate rapidly, all while other forms of gambling operate under strict scrutiny.
Those who opened sweepstakes parlors knew the risks, even if they did not share odds with their customers. Lawmakers should heed DeWine, local government and law enforcement officials and fraternal and charitable organizations and quickly enact the Huffman bill.