Internet Cafes blamed for low gambling revenue

Feb 25, 2013 7:12 PM

Although banned in some Eastern states, Internet cafés are being blamed in Ohio with preventing licensed casinos and racinos from generating the gambling revenues predicted when the state approved licensing four casinos and the granting of slots licenses at the state’s racetracks.

Some state officials are expressing concern the casinos in Columbus, Cleveland, Cincinnati and Toledo will not meet the revenue numbers that were forecast. A recent study by the Ohio Casino Control Commission found Ohio casino slots players are playing far less than their counterparts in surrounding states.

It is estimated gross casino tax revenue in Ohio for the 2014-2015 period will fall about $904 million short. Such a shortfall would mean more than $100 million less for the state’s schools and more than $150 million less for county assistance.

Gaming officials noted there are about 800 Internet sweepstakes parlors where “gamblers” pay for Internet time or buy phone cards and use them to bet points on computers loaded with games such as poker. They charge these machines operate just like slot machines but are unregulated and untaxed.

In addressing the problem, Matthew Schuler, executive director of the Ohio Casino Control Commission, told the Columbus Dispatch newspaper he is concerned about “ensuring the integrity” of casino operations and finances built into state law.

Ohio lawmakers have spent the last two years attempting to determine just what to do about the cafés. Opponents favor regulation and taxation while lobbyists for the café operators call for a hands-off policy.

“We don’t feel the folks that are coming in and buying telephone cards are the folks that are going to casinos and betting hundreds of dollars,” said a lobbyist who also is a former state lawmaker.

Ray Poirier is the longtime executive editor at GamingToday.

Contact Ray at [email protected].

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