Don't Expect to See Internet Sweepstakes Cafes in Shaker

With the uncertain future of proposed legislation at the state level, Shaker officials won't review applications for Internet cafes

Shaker Heights officials didn't want Internet sweepstakes cafes in March 2011, and little has changed 19 months later.

City Council extended its moratorium on reviewing applications and licenses for the gaming establishments this week, citing uncertainty regarding the businesses at the county and state levels.

In March 2011, Ohio Attorney General Mike DeWine said the state should establish more oversight for the cafes and a tax on revenues. Ohio legislators introduced House Bill 195 a month later to regulate the establishments, but the bill still remains in the House State Government and Elections Committee, according to Shaker's memo.

Because of that doubt, Shaker Heights officials have elected to play it safe.

"There are indications that (HB 195) may move forward, even by the end of this year, but, of course, we have no control over that," Shaker Heights Law Director William M. Ondrey Gruber said.

Gruber said the city would rather extend its moratorium on Internet cafes than have to go through a zoning process if someone proposed opening up a new gaming business.

In May, former Cuyahoga County Prosecutor Bill Mason filed a 70-count criminal indictment against 10 people and seven businesses that manufacture and market machines used in Internet cafes. The prosecutor's office said the businesses engaged in illegal games of chance and funneled $48 million to a New Jersey software developer and to entities in Europe. Mason also threatened to shut down cafes in the county if they didn't cease operation, but a judge granted a temporary restraining order allowing the businesses to resume gaming.

Shaker's moratorium marked the third time council enacted legislation against Internet cafes since November 2011. The current extension lasts through December 31, 2013. It states:

"The current uncertainty in the state and city about whether Internet Sweepstakes Cafes are illegal gambling operations, or are permitted under current law, and the state's current consideration of regulations of such operations, raises sufficient concerns and legal issues that the city should continue to hold in abeyance consideration or approval of any proposals or applications for an Internet Sweepstakes Cafe."

What do you think of this moratorium? Let us know in the comments.


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