Ohio AG: Regulate Internet gaming

Ccolumbus Dispatch

COLUMBUS

If you want to gamble in Ohio, you don’t have to wait until three casinos are built. And you won’t have to stray from the Mahoning Valley.

Hundreds of Internet caf s and game parlors statewide offer games that function like slot machines with cash prizes.

In response, Ohio Attorney General Mike DeWine is supporting legislation to strictly regulate themy.

“I’ve seen them everywhere in the state,” said one of DeWine’s investigators who The Dispatch agreed not to identify. “They are in gas stations and strip malls ... all the way up to game rooms that have hundreds of machines.”

In Warren on Friday, three such gaming establishments were raided, and about 150 machines were seized. No charges have been filed.

The “sweepstakes” establishments are, however, legal in Ohio — sort of.

“There’s no law that was designed for them. They kind of morphed out of other ways of making money,” said DeWine, a Republican who took office in January. “Every other form of legal gambling in this state is somehow regulated. This is not.”

New game locations are opening all over Ohio, mostly, but not exclusively, in urban areas.

“It’s like bailing out the ocean,” DeWine said. “They are everywhere.”

Working with Republican state Reps. Marlene Anielski of Walton Hills and Nan Baker of Westlake, DeWine is backing proposed legislation to bring the unregulated world of “sweepstakes” games and Internet cafes under control of the Ohio Casino Control Commission.

The proposal would require games to be examined, certified and stamped by the commission. Operators would have to be licensed and would be limited to no more than five games at a single location. Violators would face criminal penalties. Fees that operators might be charged were not specified by legislators.

The games go by different names — none of which mention gambling: Buckeye Internet Cafe, Chatterbox, Lucky Dog, Players Club, Sky’s Net, Treasure Chest. Some offer business services, such as Internet connections and fax. Most provide customers with free food and nonalcoholic beverages.

The investigator who has visited many of the game parlors under cover said customers purchase Internet time or a phone card. They use the cards on machines, usually computers and monitors which are loaded with poker or slot-machine match-style games.

Players bet points on their card until they run out. They then can cash out their winnings, if they have any, or transfer them to continue playing. Winners are pre-determined and are not based on skill, state officials said.

Winnings can be taken in cash or merchandise such as car wax, cans of coffee or gas cards.

“Nobody is there playing for the jumbo pack of paper towels,” the investigator said. “They’re there to win cash.”

Much like pay-day lenders, Internet cafe businesses are opening in transitional neighborhoods. That worries advocates for the poor and seniors, two groups that often fall prey to gambling schemes.

“My concern is they’re locating in areas where people have inadequate income and are desperate enough to gamble,” said Cathy Levine, head of the Universal Health Care Action Network of Ohio. Indeed, many of the customers DeWine’s investigators see while undercover are senior citizens, people in lower or fixed incomes and the disabled.

Rep. Anielski, co-sponsor of the Internet cafe legislation, has done her own undercover work, visiting 10 sites in four counties, including Franklin, over the past month.

“In one place, I was put on a waiting list because there were so many people playing,” she said. “They had free pizza, soft drinks, hot coffee and an ATM machine.”

Anielski said one location had 62 machines; the least she saw was 20.

She said the proprietors made it clear they understand they are skirting, if not outright defying, Ohio law.

“They were pretty open with me,” she added.

“Some of the people were there, they would tell me, ‘Don’t keep a lot of money on your card because you never know when the state is going to come in.’”

Pete Thomas, head of the charitable law section in the attorney general’s office, has a blunt warning for those visiting the cafes.

“You’re walking into a real potential scam. You don’t know the odds of winning or losing. It could be 1 in a million. You don’t know if the operator is really paying out. A lot of people are getting ripped off.”