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Legality of Internet Sweepstakes Cafes in Colorado Questioned

Legality of Internet Sweepstakes Cafes in Colorado Questioned

There are many internet sweepstakes cafes or cybercafés available in Pueblo and other areas in Colorado and last week, the Colorado Attorney General’s office stated that these cafes are illegal since they violate the gambling laws in the state.

Legality of Internet Sweepstakes Cafes in Colorado Questioned

The legality of the existing sweepstakes cafes in Pueblo and other areas in Colorado are now in the spotlight with officials viewing them as a violation of the state’s gambling laws.

Last week, the HB1392 bill was approved by the state House of Representatives and this would make sweepstakes cafes illegal in Colorado. However, it is now up to the Senate to make the final decision on this bill.
If this bill is approved, Colorado will join Florida, Ohio and Mississippi as being the fourth state to ban sweepstakes cafes.

To date, Colorado citizens have voted on allowing gambling in three areas namely, Black Hawk, Central City and Cripple Creek. It seems that sweepstakes cafes have taken advantage of this and have set up cafes in other areas which have not been approved.

Those in favor of these cafes strongly believe that the sweepstakes machines do not constitute gambling since they simply reveal if a player has won the sweepstakes prize of cash.

The state law in Colorado clearly states that machines in Colorado need to pay out more than 80% of money wagered. The machines used in these cafes are not regulated which means they do not meet the minimum payout requirement.

Licensed casino operators go through extensive background checks before their licenses are approved and to date, sweepstakes cafes have not fallen under these tight state regulations but it looks like things are about to change in Colorado.

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.