Three months after the law that effectively banned Ohio’s internet cafes went into effect most of the businesses that housed the sweepstakes games that law enforcement linked to crime are no longer open.
Several of the buildings are marked by “for lease” signs.
The law limited the payouts of such games to $10 and gave police sweeping powers to prosecute the cafes as illegal gambling establishments.
An attempt by supporters of the businesses (the Committee to Protect Ohio Jobs) to qualify a measure for the ballot to repeal the law fell far short of the required signatures.
It is difficult to know exactly how many internet cafes have closed because it was unclear exactly how many were operating before the ban was passed. One estimate says 620. Several hundred may have shut their doors. Others switched over to offer skill games, which are also limited in the size of their prizes, but operate under the Ohio Casino Control Commission.
Some American Legion posts offer the sweepstakes games, but stay within the $10 limit for prizes.
The games, which Ohio’s four legal casino resorts lobbied to be brought under government control or banned, were based on internet cards that customers would buy and then play slot like games on computer terminals. The results were predetermined.
The state-sponsored casinos claimed that the internet cafes were responsible for their less than projected revenues, with some estimating that $500 million was lost to them each year. The gaming commission is releasing figures this week, which may show if the casinos have done better without the competition.
State and local law enforcement officials prosecuted several owners of such cafes last year and forced one out-of-state manufacturer to promise not to sell products in Ohio.
Ameet Patel, general manager of the Columbus Hollywood Casino, was recently asked about that operation’s profitability.
He answered, “We clearly have made it very public knowledge that there are pockets of pleasant and not-so-pleasant surprises. Our table-games business, our event business, our food and beverage business have exceeded our expectations. Our slot business has not met our expectations. Slot volume is a very critical part of our business model.
“Would we have loved to do better and perform better? Yes. Are we happy with at least what we see right now? We publicly say that we are about 20 percent cash-on-cash return in year one, and that is an absolutely fantastic benchmark for any other casino operator to use throughout the country,” he said.
He believes the casino has room for growth and expects much more of the property to be developed in the future.
Meanwhile, the racinos that have been steadily coming online in the Buckeye State have had a big effect on a $1.1 billion gaming market that some say is close to saturation.
Last year between them the four casino resorts and four racinos, two of which opened in December, generated more than $1 billion. The state collects 23 percent from casinos and 36 percent from racinos.
