Forest Park Issues Moratorium on Internet Sweepstakes Establishments

Forest Park, Ohio has become one of a growing number of communities who are starting to address the growing trend of Internet Sweepstakes Establishments. Earlier this year, we became concerned about this relatively new digital twist to the age-old problem of gambling. There are variations concerning how Internet sweepstakes establishments operate, but they can first appear so inconspicuous, in terms of gambling, that they may have already crept into a few communities. It has been reported that one variation of the Internet sweepstakes establishment (or café as they often refer to themselves) is where customers purchase pre-paid phone cards at the café which provide them with Internet access time on computer terminals at the café to play cards, horse races, slot machines, or other games over the Internet. Winning or qualifying in these games then allows the player to win additional minutes or points that in turn may give them chances in a sweepstake where they could actually win money or other prizes of greater value. The bottom line is that these Internet sweepstakes concepts and related Internet gaming offshoots appear to be just a creative form of gambling. In most cases, operators come into a community and open up shop with a bunch of computer games that allow “winners” to acquire prizes that could be as innocuous as telephone airtime. The concern of public officials is that it would not take much effort to convert these airtime prizes by reselling them, trading them in lieu of cash or leveraging them to participate in a larger “sweepstakes” type of Internet drawing where participants could actually win money or other prizes of greater value. According to Chris Anderson, Forest Park’s Community Development and Zoning Director, “What seems innocuous on the surface could quickly snowball into a full-blown gambling parlor.”

In March of this year, Forest Park’s administrators discussed various Internet gambling concepts with its City Council with the initial idea of adopting legislation to regulate it using communities such as Liberty Township, Butler County as models. We understood at that time that we must be proactive to make sure that we understand and prevent what appears to be a growing trend to circumvent laws that are designed to prohibit gambling and other illegal activity. We also determined that we needed to spend more time just studying and better understanding the concept. Consequently, in March Council passed a resolution to establish a six months moratorium for use and occupancy applications and permits for such operations.

Since the moratorium has been in place we have received at least two inquiries about operating Internet sweepstake cafés. By mid-September we were prepared to present a code amendment to address the concept of Internet sweepstakes games and establishments at the end of the initial six months moratorium...

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Forest Park
October 2011
From the desk of Ray Hodges