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Ohio Attorney General Mike DeWine is rallying local law enforcement to shut down Ohio’s Internet cafe “sweepstakes” parlors, with or without the help of the Ohio legislature.
DeWine held a briefing Wednesday, attended by hundreds of cops and prosecutors from across the state, to teach them how to investigate, charge and convict operators of Internet cafes.
Later in the day, state and federal agents as part of an investigation into possible illegal gambling raided six Internet cafes in Cuyahoga County, along with the New Jersey corporate offices of VS2 Worldwide Communications, a provider of Internet cafe software.
DeWine said law enforcement doesn’t have to wait for the General Assembly, where a bill that would effectively ban Internet cafes in Ohio has stalled.
A March decision from the 8th District Court of Appeals gives law enforcement the ammunition they need to act, he said. In that ruling, a panel of three judges found three Internet cafes in Cleveland were just a thinly veiled cover for illegal gambling.
“In our office we have always believed these places are illegal,” DeWine said. “Now we are armed with a court decision that makes this crystal clear.”
DeWine announced the creation of a 19-person Internet Gaming Enforcement unit and pledged the “full weight” of his office to assist local law enforcement.
Internet cafes have proliferated across the state operating in what law enforcement say is a legal grey area. They work by selling Internet and phone time to customers, who with their purchase get a chance to win cash payouts by playing an electronic sweepstakes game that resembles a slot machine.
Internet cafe operators say that the businesses aren’t gambling, but are instead sweepstakes operations with pre-determined winners, similar to those offered by McDonald’s and other companies.
Sam Ferruccio, an attorney for Internet cafe software provider Pong Marketing, said the court ruling in Cleveland can’t be applied to all Internet cafes.
“We agree with Attorney General DeWine that owners of stores which aren’t doing lawful sweepstakes should be prosecuted, but there’s an important distinction between lawful sweepstakes and illegal operations,” Ferruccio said. “The 8th District court decision didn’t say that sweepstakes were illegal, but rather that the particular operation under investigation wasn’t doing sweepstakes.”
But Greene County Prosecutor Stephen Haller said the Cleveland court ruling could at least give an enterprising prosecutor a foothold if presented with a case against Internet cafes in their community.
“I’m glad the attorney general is taking the lead, and not waiting for the legislature to get off their butts and get something done about it, because we need some direction,” Haller said.
The Ohio House in March passed a bill that would effectively ban Internet cafes by limiting cash payouts they offer to $10. But members of the Ohio Senate have indicated that they have no plans to act on the bill until possibly next year, saying they need more to study whether simply regulating the industry might be a better route.
Among those who attended DeWine’s briefing Wednesday was Montgomery County Sheriff Phil Plummer, who said Internet cafes have been a problem in the county for years.
“We’ve been waiting on this this opinion,” Plummer said. “Now we’re going to take action that they’re deemed illegal, that they’re illegal gambling. We’re going to investigate them and hold them accountable.”
The exact number of Internet cafes in Ohio is not known. The AG’s office says 794 have self-reported across the state since July, but spot checks found that some of the 39 listed locations in Montgomery County are run by fraternal or veterans organizations. There are also several cafes listed in Butler, Warren, Clark, Greene and other area counties.
The single organization identified by the AG’s office as an Internet café in Miamisburg is the local Moose Lodge, according to police Chief John Sedlak.
Sedlak knew of no Internet café in Miamisburg, though he sent a representative to the AG’s new conference.
“We wanted to know how this might affect us. We’ve had several (operators) who have expressed an interest, so we want to be prepared,” Sedlak said.
The attorney general’s list include four locations in Vandalia, which came as a surprise to police Chief Doug Knight.
“The city passed an ordinance several years ago that requires a licensing process for Internet cafes. We’ve had no applications nor any inquiries,” Knight said.
Checking the addresses of the four establishments, Knight discovered one was in Butler Twp. and the other three were veterans organizations, not Internet cafes.
“The city law director will review the ordinance in light of the attorney general’s opinion. If there is anything that needs to be changed we will contact the organizations.
Telephone calls to 10 of the entities listed in Dayton found seven of the numbers disconnected. People answering the phone at the other three said no one was available to comment.
“There is no one here that can help you,” said the woman answering the phone at the Cyber Café, 911 E 3rd St., Dayton
“The only thing I can tell you, is there are a lot less (Internet cafes) than there used to be,” said Bob Chabali, Dayton assistant police chief.
“We are reviewing the information and will determine how we will enforce it,” he said.
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