Sunday, September 24, 2017 Elyria 67°


Closing of Internet sweepstakes cafes hits cities’ funding


NORTH RIDGEVILLE — The shuttering of storefronts that once were full of customers playing sweepstakes games will have an impact on more than the property owners losing money in rent with their closure forced by a new state law.

Cities across Lorain County profited from the establishments as well in the form of licensing and machine fees paid to the residing cities. Now that they are closed, city officials must figure out how to get by without the thousands of dollars in additional revenue.

“By itself, the $100,000 we made each year in fees is not a huge part of our $12 million general fund, but when you start to add up all the hits cities have been taking — cuts to the Local Government Fund, repeal of the estate tax and personal property tax — it’s just more money we will have to do without,” North Ridgeville Mayor Dave Gillock said.

While some may oppose the concept of Internet cafes, calling them just smaller casinos that encouraged gambling, Gillock said he saw businesses serving a purpose — commonly entertainment — for their clientele.

“Those business filled locations that were once empty, gave people jobs, brought income to the city and we didn’t have any problems with them,” he said. “But they’re gone now, so we can’t worry about that anymore.”

North Ridgeville had seven Internet cafes up and running across the city when the venues were in their heyday.

Ohio Attorney General Mike DeWine has said now that there is a new law effectively keeping the Internet cafes closed — the rules limit prizes to the point where operating wouldn’t be profitable — his office actively will go after lawbreakers.

Elyria safety service director Mary Siwierka said the last four Internet cafes operating in the city — two near Midway Mall and one each on Leona Street and Chestnut Commons Drive — closed in recent weeks, as soon as it became evident that an effort to get the law put on the ballot for voters to decide had failed.

“Once that law went into effect, the owners realized they were not going to make enough profit or overhead,” she said. “But to us the loss is more monetary. We really didn’t have any problems or complaints from the businesses. I think it was more of an older crowd that was frequenting the establishments. ”

In Elyria, the city earned roughly $75,000 to $90,000 a year in fees. The money went into the city’s general fund.

“Making up $75,000 or $90,000 ... is small compared to what some communities will probably have to do,” Siwierka said.

The problems with Internet cafes in Lorain County — some statewide opponents argued they were havens for illegal activity —were limited to a few incidents.

The Treasure Island Internet Cafe in Grafton Township was robbed by two gun-wielding men in late September; a similar robbery took place in May at the Chestnut Commons Drive location in Elyria and a third such robbery happened in Lorain in January.

At the peak of business, Lorain County had the most Internet cafes in the state, according to a database released earlier this year by the attorney general’s office. There were 42 Internet cafes and sweepstakes parlors, or roughly 12 percent of the state’s 339 businesses. Cuyahoga and Summit counties had 22 each.

Gillock said it would not be easy for some business owners to find new tenants. A location in the 6200 block of Lear Nagel Road has the best chance of turning over quickly. It’s in a popular area on a main road, Gillock said.

Contact Lisa Roberson at 329-7121 or Follow her on Twitter @LisaRobersonCT.

Click to view comments
To Top

Fetching stories…