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  States Sets New Rules For Internet Cafe Businesses  
  June 14, 2012 Edition  
     COLUMBUS---OHIO Attorney General Mike DeWine announced on Monday that new state legislation now effective bans any new openings of electronic sweepstakes establishments, commonly called ‘internet cafes.’ It also places filing requirements on any such internet cafes currently operating.
      “These places have popped up across Ohio and they have been unregulated,” said DeWine. “This is a step in the right direction toward protecting Ohioans who play these games.”
      In addition to the moratorium on any new internet cafes, House Bill 386 signed by Gov. John Kasich requires that any existing internet cafes must complete an affidavit containing their business information, locations, and additional information.
      The affidavit must be notarized and submitted to the Ohio Attorney General Charitable Law Section, 150 E. Gay St., 23rd Floor, Columbus, Ohio, 43215. All affidavits are due by July 11, 2012.
      A public listing will be compiled from submitted affidavits after July 11, 2012. The list will be available at the Ohio Attorney General’s website for use by consumers and law enforcement to ensure that new establishments do not open after the moratorium date.
      The new law also included changes to laws covering bingo, casinos, lottery terminals, and other related areas. New forms and processes are being put in place at www.OhioAttorneyGeneral.gov regarding changes to bingo laws in the bill.
      A copy of the required affidavit can be found on the Ohio Attorney General’s website.
      Internet cafes came under assault last week in Cleveland when ten people and seven companies were indicted for alleged involvement in illegal Internet Sweepstakes Cafes operations in Cuyahoga County.
      The ten defendants and seven companies were indicted on counts of engaging in a pattern of corrupt activity; conspiracy; gambling; operating a gambling house; and money laundering.
      Cuyahoga County Prosecutor Bill Mason said the individuals and companies named in the indictment are operating, or working in close cooperation with the owners of an intricate internet gambling system known as ‘VS2’ that is controlled by a computer server in the New Jersey headquarters of VS2 Worldwide Communications, LLC.
      The 14 internet cafes operating in Boardman have come under the scrutiny of at least two investigation conducted by the Boardman Police Department. Information compiled by the BPD has been presented to the Mahoning County Prosecutor’s Office that has shown a reluctance to take a legal stand on the internet cafes.
      Last week, Boardman Police Chief Jack Nichols said he was unaware of the VS2 systems, or if any local internet cafe operators use such a system.
      The Ohio Investigative Unit of the Ohio Department of Public Safety, working with the U.S. Secret Service, have identified the principal operators and account holders of the VS2 gaming system as Phillip Cornick, Edward Kaba, and Richard Upchurch.
      Over the last four years, these individuals have perpetuated the expansion of their VS2 gaming system into Ohio with the assistance of Ohio-based distributors and marketers of the system, the Ohio Attorney General’s Office said.
      “These people convinced many small business owners in Cuyahoga County that VS2 internet café gaming system operates as ‘sweepstakes,’ which are not illegal and unregulated in Ohio,” Mr. DeWine said.
      The ten defendants and seven companies were indicted on counts of engaging in a pattern of corrupt activity; conspiracy; gambling; operating a gambling house; and money laundering.
      “We are working hard with partners like Prosecutor Mason to crack down on illegal internet cafes in Ohio,” said Attorney General DeWine.
      “These businesses, hundreds across Ohio, are totally unregulated and can be a real consumer rip-off.”
      Mason said, “The end result is exactly what the members of the criminal enterprise intended - a complicated and elaborate, layered web of related companies dispersing and distributing money to each other with hopes of never being caught. The days of gambling with the law have come to a screeching halt.”
 
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