Internet cafés declared 'illegal businesses' in Ohio

Having solved all of the state's other problems, the Ohio legislature has passed a bill outlawing that most foul of societal ills: the internet café.

As reported by the Cleveland Plain Dealer, House Bill 7, which passed the State Senate with a bipartisan vote of 27 to 6 on Wednesday, effectively cuts off the main source of income for Ohio's internet cafés and is expected to put most of them out of business.

That's just fine with Republican Senator Jim Hughes, who argued in favor of the bill on the Senate floor.

"Although these cafés provide a source of income for some ... internet cafés harm more people than do good," Hughes reportedly said.

His remarks echoed earlier comments by state Attorney General Mike DeWine, who, emboldened by a decision in the 8th District Ohio Court of Appeals that some internet cafés were operating illegal businesses under Ohio law, has been cracking down on the online parlors for the past few months.

In April, DeWine organized a high-profile raid by federal, state, and local police forces that shut down six internet cafés in Ohio's Cuyahoga County.

"In our office we always believed these places were illegal. Now we're armed with a court decision which makes this crystal clear," DeWine told reporters at the time.

At this point, dear reader, you're doubtless wondering just what could be so harmful about email, web surfing, and online gaming that could have armed police kicking down an internet café's door. But the situation in Ohio isn't quite what it seems, owing to the unique business model employed by internet cafés in the state.

It's true that Ohio's internet cafés sell internet access and phone minutes. But according to DeWine, Hughes, and other proponents of House Bill 7, that's not what keeps their customers coming back.

What frequent internet café patrons really want, the bill's sponsors say, is the chance to play computer "sweepstakes games," which the cafés allow for free with every purchase. These games typically resemble slot machines and offer players the chance to win cash prizes, which DeWine says essentially makes the cafés unlicensed casinos.

Some patrons certainly treat them like casinos. In studies, internet café customers were found to have purchased massive amounts of phone time – enough to allow them to talk for 24 hours per day for months – just so they could keep playing the sweepstakes games.

In February, Cuyahoga County prosecutors seized nearly $2m from internet cafés, all of which they say was proceeds from illegal gambling operations.

"These 500 illegal, unregulated, corner gambling parlors have been making tens of millions of dollars by swindling their poor, elderly, and vulnerable slot players," Cuyahoga County prosecutor Timothy McGinty said in a statement.

What's more, Senator Hughes said some Ohio internet cafés had been linked to money laundering, fraud, drug sales, and even human trafficking.

House Bill 7 would end all of that by limiting the amount of cash payouts in sweepstakes games to $10, effectively removing the element of gambling from the equation. By so doing, legislators believe the bill will ultimately drive the internet café business from the state.

Not every Ohio legislator agreed with this approach. Republican Senator Bill Seitz argued that the internet café business should be regulated rather than destroyed.

"Today it is my privilege to give the eulogy for the 6,000 to 8,000 people that will be put out of work by the adoption of this measure," Seitz said upon House Bill 7's passage.

Having been approved by both the House and Senate, the bill now goes to the desk of Governor John Kasich, who is expected to sign it. Once he does, the new limits on sweepstakes games will go into effect within 90 days. ®