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States Struggle to Close Sweepstakes Cafes

States Struggle to Close Sweepstakes Cafes

Across America a number of internet cafes have appeared in strip malls and gas stations which offer more than just access to the internet. The venues are known as internet sweepstakes cafes and they give punters access to computers which have the look, sound and feel of slot and video poker machines.

Both state and local authorities say that the cafes are illegal; however, it is proving difficult to shut them down. It is thought that the cafes are making more than $10 billion a year in revenues.

Last year Ohio, Florida and Mississippi passed laws to ban internet sweepstakes cafes and there are bans on the way in Connecticut and California. However, as Ohio Attorney General Mike DeWine said, “It’s foolish for anybody to think they are not going to come back in a different form.”

As soon as illegal cafes are closed new ones open. They avoid the bans by giving themselves different names, instead of being sweepstakes cafes they will promote arcade games or call themselves “skill game” venues.

Aside from legality, a further problem with the cafes is that they aren’t regulated so states aren’t collecting tax revenue from any gambling. However, it appears that all states are facing an uphill struggle to keep the cafes closed.

OCA News Editor

Jenny McKinnley is OCA’s financial correspondent. After spending years on the trading floor in both NY and London, she offers insight from the inside out on world financial news and events.

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