Council members question legality of sweepstakes cafe

CHEVIOT, OH (FOX19) - Cheviot City Council members are trying to figure out how best to handle the possibility that a sweepstakes café may be setting up shop on their streets.

City Councilman William Clark says the business would be the first of its kind to open its doors in southern Ohio.

Opponents of such establishments say these businesses have been shown to bring more crime to the areas they open up in. They go on to add that they believe the sweepstakes cafes exploit loopholes in state gambling laws.

Supporters of the cafes argue that their businesses are legal and instead of collecting winnings, the cafes are just selling pre-paid phone cards or internet time. They say the operation is no different than buying a scratch off lottery ticket.

"It's very quick to set up," Councilman Clark said. "You set up some computers, put a server in and some tables and chairs and people can get to business."

On the corner of Harrison and Glenmore Avenues in Cheviot, window paint markings on the café have been announcing a July 88th opening.

"They've already made their intent known that they're coming here and we can't just restrict a business because we suspect that they're gambling," City Councilman William Clark argued.

Clark says it is too late to put a memorandum in place that would halt the business opening until new state laws are put in place to regulate sweepstakes cafes. He says an ordinance is in the works, however.

"As long as he's not doing anything illegal there cant be a problem with it," Councilman Matthew McGowan said. "However, that area's still a little murky which is why we're doing our research."

After talking with the management company, Fox19 News found the cafes owners did not sign their lease as planned on July first. Regardless, city council is making sure they are ready if the business does, in fact, decide to set up shop.

"A lot of these internet sweepstakes cafes choose these smaller communities realizing they don't have the resources to do a long huge court battle if the community decides it is in fact a gambling site," Clark said.

Clark says these types of businesses have long been popping up in Florida, North Carolina, and Northern Ohio, operating under a legal gray area that has existed for years.

"Until we get a better idea on this on what exactly is legal, and what exactly is not it's kind of hard to say yea or nay," McGowan said.

McGowan encourages other town officials to look into their policies on such establishments before it is too late.

"If I was another community, on another council, I'd start looking into the matter now so you can be prepared instead of surprised like we were," McGowan said.

Clark says the next step would be to create an ordinance to regulate the business in question and then possibly create a moratorium for future businesses until the state puts laws in place to regulate the sweepstakes cafes.

Legislation to have the cafes regulated by the Ohio Casino Control Commission is currently being heard in committee in the Ohio House of Representatives.

"By establishing oversight of these previously unregulated games, Law enforcement, consumers, and charities can operate in a more fair environment," Ohio Attorney General Mike DeWine stated.

The city will have a special meeting Wednesday night to further discuss an ordinance to regulate the "sweepstakes cafe's". The meeting is at 6:30 p.m. and is open to the public.