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Who Regulates Ohio Amusement Centers?

Q: I’ve heard there’s something called an amusement center in my neighborhood that allows customers to play sweepstakes games. How does this work?
A:
 An amusement center (also known as an amusement arcade or Internet café) is a business that provides machines for customers to play sweepstakes-type games. These machines vary in appearance and method of operation. Some look like computers; others may look like slot machines. They may be mechanically, electrically or electronically operated by inserting a coin, plate, disc, plug, key, card or token and may be used to play a game or engage in a contest. Most amusement center businesses operate by allowing customers to buy phone cards that provide them with computer time to play sweepstakes games. According to these business operators, winning is determined by chance and not skill.

Q: How do these machines differ from slot machines?
A:
 The most obvious difference between a slot machine and an amusement device is that money is not fed into an amusement device. Instead, amusement center customers pay for phone time or Internet time and are automatically entered into a sweepstakes in appreciation for their purchase. Amusement devices may provide many different games for a customer to choose from; slot machines usually do not provide options.

Q: How do amusement center games differ from lottery ticket sales, horse racing, and other types of gambling in Ohio?
A: 
Amusement center games are different from other legal gambling operations in Ohio because there is no state-sponsored agency exclusively responsible for regulating them and allotting licenses. In order to become a lottery sales agent, a person must be issued a license from the Ohio Lottery Commission. The Ohio Racing Commission issues licenses to persons who are engaged in gambling associated with racing. Bingo licenses are regulated by the Ohio Attorney General and are granted only to charitable organizations. Currently, amusement centers are regulated by the local municipality in which they are located. It is likely that the Ohio Casino Commission will soon have jurisdiction over amusement centers. Once the Ohio Casino Commission receives this authority, it will issue licenses to those who wish to operate amusement centers.

Q: Are these amusement center games legal and regulated?
A: 
Currently in Ohio, there is no law against businesses that allow patrons to play amusement center games. However, municipalities in which these businesses operate have the right to regulate them. Permits and licenses vary in cost and requirements according to the municipality. Most municipalities require the business owner to pay an annual permit or license fee as well as a municipal tax. The owner may be taxed on a monthly basis or annually for each of the sweepstakes machines.

Ohio Attorney General Mike DeWine has stated that he will support legislation to regulate these types of businesses. The pending proposal for new legislation would allow the Ohio Casino Commission to regulate amusement center sweepstakes games by limiting the number of machines per location; requiring certification and licensing for the machines; and requiring the business operator to be licensed.

Many municipalities across Ohio are waiting for the state to decide whether or not it will regulate amusement center games. Some municipalities will not grant any more amusement center permits until it is clear whether the state will regulate this industry. Other municipalities are continuing to grant permits. If you wish to make your opinion known about whether permits for amusement center games should be granted in your municipality, contact one of the members of your city council.

7/11/2011

This “Law You Can Use” column was provided by the Ohio State Bar Association (OSBA). It was prepared by Kira S. Kittoe, staff attorney for the City of Garfield Heights.  

Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.

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