Toeing the Line: Ohio’s Internet Sweepstakes Cafes

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Internet Sweepstakes Cafés have been active throughout Ohio since 2010. These establishments offer customers the opportunity to play slot-style computer games online. Potential winnings include more Internet time and points-based opportunities to compete in sweepstakes that offer monetary prizes.

Since outcomes are predetermined, just as they are with winning scratch-off lottery tickets, Toledo Municipal Court Judge Francis Gorman ruled, in November, 2011, that the sweepstakes were legal.

Recent backlash

However, in late May, Cuyahoga County Prosecutor Bill Mason indicted 10 people and seven businesses in connection with distributing the software system that local gamers use to participate in the sweepstakes. After filing the indictment, Mason, who called the sweepstakes cafés "illegal gambling businesses," sent letters to the 50 café owners in the county ordering them to close their establishments immediately.

In still-more-recent developments, earlier this month Cuyahoga County Common Pleas Judge Nancy Russo ruled in favor of four of the cafés, which had asked the court to intervene in their forced closure. Russo allowed the four to reopen and did the same for another nine cafés about a week later, issuing a temporary injunction preventing Prosecutor Mason from shutting them down again.

On July 12, Ohio Attorney General Mike DeWine called for state regulation of the cafés, which, he recently learned, number at least 667 — more than twice the number he'd previously estimated. A June moratorium on new cafés, which required those in operation before June 11 to submit affidavits declaring their existence, revealed the unexpectedly high number of cafés in operation in the state.

The law in motion

Attorneys for the café owners argue that the law requiring owners to file affidavits of operation legitimizes their businesses. They also argue that the sweepstakes don't constitute illegal gambling. Café operators agree, saying customers aren't required to buy anything to enter the sweepstakes, but purchases do give customers more points to use for game play. As an attorney representing a defendant in one of these cases, I intend to uphold the rights of businesses to operate legally in Ohio.

Only time will tell what the future holds for this issue, but at least for now, the sweepstakes cafés are back in business in Ohio.


 

Published In: Administrative Agency Updates, Art, Entertainment & Sports Updates, Civil Remedies Updates, General Business Updates, Criminal Law Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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