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Gambling legislation on hold for now


August 24. 2013 9:25AM
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COLUMBUS — Ohio lawmakers will go home for the year without finishing off legislation dealing with the largely unregulated gambling industry known as Internet cafes — but leaders expect the issue to return quickly next year.


Senate President Tom Niehaus, R-New Richmond, made the decision this week to not move ahead with a vote on House Bill 605, which passed the House last week. The measure would have limited prize payouts at Internet cafes to $10 a day, effectively driving them out of business.


Still, Rep. Matt Huffman, R-Lima, who sponsored the bill, said he thought concerns about it could have been fixed in the next few days.


“It has to come back again,” he said. “There are really two options. Either we don’t have it, or we do and it’s regulated and taxed like other gambling operations such as casinos and racetracks. But I don’t think the citizens have approved statewide, for-profit gambling.”


Huffman said if lawmakers go with regulation, he expects it will drive most of the small operators out of business and the state will end up with a few large-scale operators, “which is not what the Constitution calls for.”


The decision came not long after Attorney General Mike DeWine urged a Senate committee to pass the bill this week, likely the final week of sessions for this General Assembly.


“This is gambling,” he said of the cafes, also known as “sweepstakes parlors,” saying they are ripe for criminal activity and that he would be willing to detail his findings with lawmakers in private. “The only question is, whether you want to regulate it or want to abolish it.”


Niehaus said he expects the issue to resurface early next year. But for now, there were still a number of questions about the bill, such as how it might impact some businesses that run legitimate sweepstakes games, including McDonald’s or Speedway.


“It’s a very complicated bill,” he said. “We’re simply running out of time. I even asked if taking another week or two would make a difference. I just did not feel there was ample time.”


Niehaus said he didn’t want to rush the bill and create unintended consequences to meet an “artificial deadline.” He said there is probably more support among Senate Republicans for a bill to regulate Internet cafes rather than pushing them out of business, “but it’s very close.”


Lawmakers have been debating the issue for two years. A moratorium on opening new Internet cafes in Ohio runs through June.


DeWine, county prosecutors and other law-enforcement groups support House Bill 605. Speaking of Internet cafes, Gov. John Kasich said on Monday that he would “prefer to see them gone.”Bill opponents packed a Senate hearing room yesterday, arguing that they are benefitting communities through tax revenue and are employing thousands of people who have no criminal history or intent. They say the businesses are social gathering places similar to locales that host bingo games.


Luther Liggett, lobbyist for the Internet Sweepstakes Association of Ohio, said the bill is unconstitutional. “We cannot legislate against one sweepstakes when we don’t legislate against all of them,” he said, adding that the industry is willing to work on a regulation bill.


DeWine and others have argued that Internet cafes are stretching the definition of sweepstakes to the point that it looks just like typical gambling.


In a statement, DeWine said he was disappointed the Senate won’t consider the bill this session, but “the hearings that were held in the past few weeks have been helpful in bringing the issues associated with Internet cafes to the forefront.”





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