Rethink Internet Cafes in Ohio
Though government too often competes with private-sector businesses, it should not do so. And government certainly should not set itself up as a monopoly.
Yet that is precisely what some Ohio officials want to do with some forms of gambling.
Revenue from the Ohio Lottery’s ticket-based gambling operation has declined during the past year. Income is down about 1 percent in comparison to prior years.
Gambling income for the state is up in general, however. With a month left in the fiscal year, the Ohio Lottery has brought in $741 million, about $30 million more than during the same period in the past, thanks largely to slot machines at racinos.
One reason why lottery ticket sales have lagged is because of competition. Some of that is, in essence, the state competing against itself: Instead of indulging their gambling habit by buying lottery tickets, some people are patronizing the new state-licensed casinos or playing video lottery machines at racetracks.
Then there have been the “Internet cafes.” Thinly disguised gambling operations, the privately run cafes have siphoned some business away from the lottery, said Mike Petro, the lottery’s Internet technology director.
That will end soon. Earlier this month, Gov. John Kasich signed into law a bill outlawing the more than 600 Internet cafes in Ohio. That came as good news to state officials seeking to maximize their “take” from gambling.
Clearly, Internet cafes as they now operate in Ohio should be shut down. They are unregulated and not subject to the kinds of taxes levied against state-recognized gambling such as the four casinos and video machines at racetracks.
But by banning the Internet cafes, Ohio officials have set themselves up in a gambling monopoly.
As we have pointed out, some other states, including West Virginia, have recognized that simply is not right. The private sector should not be shut out of any type of business simply to protect government’s monopoly.
Ohio officials should consider allowing privately owned gambling operations – but only under tight regulation and only if they pay fees or taxes to the state.
In all likelihood, that would increase state government’s take from legalized gambling. It would allow some or all of the Internet cafes to reopen and provide jobs. Perhaps most important, it would eliminate the government monopoly in gambling.