States Try to Shut Down Internet Sweepstakes Cafes

The recent phenomenon of Internet Sweepstakes Cafes has been generating a lot of buzz from state governments. These internet cafes are usually located in suburban strip malls, and sell time on computers that simulate slot and video poker machines; some even offer real cash payouts.

These cafes generate over $10 billion a year, yet they are considered illegal by authorities. In 2013, Ohio, Florida and Mississippi banned these cafes, and Connecticut and California stand to follow suit.  

Ohio

Ohio Attorney General Mike DeWine recently commented at a gathering of attorney generals in Washington, D.C., "It's foolish for anybody to think they are not going to come back in a different form."

This is because there is so much money involved - hundreds of millions of dollars. And businesses are not going to let go of that so easily. 

While legislation in Ohio shut down most of the 800 illegal sweepstakes cafes there, stores that once offered "sweepstakes" have re-branded themselves as "skill game" venues, again offering payouts, which are illegal in Ohio. 

North Carolina

Gambling is illegal in North Carolina except at two Indian casinos, as well as the state lottery. When sweepstakes cafes began opening in 2010, the state immediately tried to issue a ban, but it got delayed until 2012.

Legalizing Online Gambling

While these states fight illegal land-based gambling, other states are trying to legalize online gambling. As of now, only Nevada, Delaware and New Jersey have passed regulations, and there are battles at the federal level for and against legalization. However, a survey by North Star Opinion revealed that Americans prefer individual states to regulate their own gambling, and oppose a federal ban.