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Bipartisan bill would keep Internet cafes open, regulate industry
TIFFANY L. PARKS
Special to the Legal News
Published: May 24, 2013
Reps. Matt Lundy, D-Elyria, and Ron Maag, R-Lebanon, have partnered to back a bill that would regulate, rather than ban, Internet cafes across the state.
House Bill 101 would create the State Lottery Commission Office of Sweepstakes Compliance to license and oversee the operation of sweepstakes gaming devices.
“This legislation would allow Internet cafes to remain open but would provide for necessary regulations to keep undesirable elements out of this industry,” Maag said in a statement. “I believe this is preferable to outlawing them, as they employ many people across the state.”
Ohio has approximately 800 Internet cafes that collectively do $300 million in business annually.
HB 101 is a modified version of House Bill 195 of the 129th General Assembly.
Under the proposal, municipalities and townships could enact local ordinances or resolutions banning sweepstakes cafes in their jurisdiction and subject Internet cafes to local zoning regulations.
The measure would require sweepstakes software suppliers to submit independent third-party lab analysis to state regulators verifying that games are true sweepstakes as opposed to slot machines or illegal forms of gambling.
HB 101 also calls for criminal background checks for software vendors, store owners and key employees, bans the sale of alcohol at sweepstakes cafes and establishes consumer protection measures, including requiring operators to conspicuously disclose the odds of winning sweepstakes.
The Ohio Free Enterprise Alliance has praised the bill as an answer to a proposal introduced at the beginning of the legislative session, House Bill 7, that would outlaw Internet cafes.
The OFEA has expressed alarm at the provisions in HB 7 that would “arbitrarily shut down an entire industry.”
“Government shouldn’t pick winners and losers in the private sector and the reasonable regulation bill assures that market forces, not bureaucrats, will determine the outcome,” said OFEA Chairman Jon Grimm. “Reasonable regulation will help weed out bad operators, protect consumers and assure that business owners offering legitimate products can continue contributing to Ohio’s rebounding economy.”
If the bill is signed into law, the attorney general would be required to institute rules to allow veterans, fraternal organizations and charities to operate sweepstakes terminals at their social clubs and exempts charitable social clubs from the alcohol prohibition.
“We call on members of the legislature to give the Maag-Lundy bill its due consideration just like they’ve given HB 7,” Grimm said, adding that with the bill having 20 bipartisan co-sponsors “it’s clear that legislators join Ohioans in supporting reasonable regulation.”
HB 101 has been assigned to the House Policy and Legislative Oversight committee.
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