Sweepstakes cafe to open in Cheviot
CHEVIOT - Under the blue awning of a former salon, neon yellow window marker announces "Sweepstakes cafe coming soon."Until recently, officials in Cheviot didn't even know what a sweepstakes cafe - sometimes called an Internet cafe or video lottery parlor - was.They, like many others in communities across Ohio, are learning very quickly.The new type of gaming, which many say borders on illegal gambling, has been making its way through the state for years. Cafes can have anywhere from a handful of machines to more than a hundred, and operate in locations as varied as store fronts, strip malls and gas stations, a state investigator told the Columbus Dispatch.Some locations also offer business services, such as a fax machine and copier, and offer free food and drinks to players.Until recently, the cafes had been prevalent mostly in northern Ohio, where state officials believe hundreds of "cafes" are banking hundreds of millions of dollars a year."They're glorified slot machines," says Ohio Attorney General Mike DeWine. "This is a huge problem around the state. They're unregulated and they're a consumer rip-off."Ohio does not have a sweepstakes law, and Internet cafes are not specifically covered under the state's gambling laws.Patrons typically buy a card to swipe on machines that gives them Internet time to play sweepstakes games.The games vary, DeWine said, but are not considered games of skill and can be similar to video poker or slot machines. Slot machines are illegal in Ohio, except in state-licensed casinos.Prizes can be nominal, such as toilet paper, teddy bears or pre-paid phone cards - but officials warn some are masquerades and later traded for cash.According to a report by DeWine's office, cafe operators say the machines are not gambling and the sweepstakes are only promotional, designed to entice customers to buy the Internet time.Part of the consumer danger with such games going unregulated is the owner is not required to pay out a certain percentage of the money wagered, DeWine said. State-authorized lotteries, scratch-offs and racetracks, for example, are required to pay out anywhere from 60 percent to 80 percent of the total amount wagered.Not everyone is in agreement over the legality of the games.A municipal judge in Toledo ruled in favor of the businesses, while a judge in Columbus' Franklin County ruled against the sweepstakes, saying they are actually prohibited slot machines and violate the state's gambling law. That lawsuit said an investigator was able to use the card to play video poker for cash prizes.And so, with no state guidance, local officials are left to deal with it - or not - as they see fit.In Greater Cincinnati, some communities are starting to act on a pre-emptive level. West Chester, Liberty Township and Forest Park are temporarily banning them until some state law is put in place. About two dozen or so Ohio townships and cities have passed temporary moratoriums."We've had a couple inquiries here and we're certain they're serious," said Forest Park City Manager Ray Hodges. "We can't wait for the state."If the sign on the former salon holds true, the Cheviot site would be the first sweepstakes cafe to open in Hamilton County.Just weeks after two men began expressing interest in opening a sweepstakes business on the corner of Glenmore and Harrison avenues, Cheviot council scrambled to unanimously approve an ordinance regulating the cafes, putting in location and hour restrictions, license requirements and penalty fees."Nobody wants to discourage a business from coming in, but nobody knows much about them and the state has no regulation," said Kitty Zech, the council member who took the lead in drafting the ordinance. "We're all kind of in the dark and we're scrambling to give Cheviot all the protection it needs and to make sure if this business comes in, it plays by the rules."The owners - local resident David Holt and Parma Heights resident Frank Cimperman - were supposed to sign a lease and initially set an opening date for late July. That appears to be delayed because they may not be able to meet parking space requirements, Zech said.She also believes they've changed the number of machines from 50 to 30.Even as council passed the ordinance on July 19, the sweepstakes announcement remained on the store windows. Neither Holt nor Cimperman could be reached for comment.There's no way to tell how many cafes are operating in the state because without a state permit requirement, there's no central database to track them, DeWine said.He recently testified his support of a bill introduced by two lawmakers from Ohio - state Reps. Nan Baker of Westlake and Marlene Anielski of Walton Hills - to regulate the parlors and cafes. He expects House Bill 195 to make its way through the state legislature in the fall.The proposed state regulation is not an anti-gambling crusade, he said."We just need to regulate it. We don't know who these people are that are running them. We don't know anything about them and they don't have to register or go through a background check," he said. "We can only surmise the money is not going to a local charity and is probably going into someone's pocket."DeWine said while most law enforcement believe the cafes are illegal, it's hard to do anything about it.If a village or township raids a cafe, "It's an expensive proposition to confiscate the machines, take it to a laboratory and have someone testify in court," he said. "It's not an easy thing to do."Not all communities have a bad relationship with the owners of these parlors and cafes, Zech said. In the city's research, council members found that strong regulation can strike a happy balance between business owner and the community."At first, we only heard negative things, but then we talked to some cities who said they are good neighbors," she said. "This may be something that works here. It may not. Time will tell on that."
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