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Proposal to outlaw sweepstakes cafes submitted

Michael Schwartz January 10, 2011 1

A bill introduced last week in the General Assembly could signal that Internet sweepstakes businesses are running out of luck.

Del. Glenn Oder (R-Newport News) introduced HB 1584 to amend the state’s definition of “illegal gambling” to include the process that resembles the systems used by at least some of the Internet sweepstakes cafes that have popped up recently across the state.

If Oder gets his way, the definition would be changed to make it illegal to purchase Internet time that allows the user to receive points or credits that are then used to play, in many instances, casino-like computer games to potentially win more points redeemable for cash.

It could potentially set up a legislative battle over whether these establishments, which are growing in number across the state, should remain legal, be shut down or merely be regulated.

At question with this bill is not necessarily whether playing the games constitutes gambling, but whether it is considered an illegal form of gambling in the eyes of Virginia law.

As the summary text of the bill describes it, the amended definition of illegal gambling would include “the purchase of a product or other thing of value (e.g., phone card, Internet time), which purchase credits the purchaser with free points or other measurable units that may be risked by the purchaser for an opportunity to win money, is deemed consideration for the purposes of illegal gambling.”

Oder did not return a call or email by press time. See the full summary text of the bill here.

One of the main arguments in favor of these businesses is that the only things they are selling are retail products, most often Internet time. It just so happens that the computers in these establishments are outfitted with casino-like games through which users play out their sweepstakes points and potentially win more than they started with.

A law passed in the General Assembly last summer opened the door for this form of video game sweepstakes. About the same time, an opinion from Virginia Attorney General Ken Cuccinelli reinforced their legality.

BizSense recently reported on the rise of these sweepstakes establishments in area shopping center storefronts.

The first story was of Lucky’s Sweepstakes, which opened in September on Hull Street Road.

After just a few months, the growth of the industry can be seen across town, with well more than a handful up and running and more in the works.

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One Comment »

  1. Scott Burger January 10, 2011 at 1:42 pm - Reply

    Can’t have competition for the state lottery, now can we?

    If we were allowed competition, we could do prize linked savings accounts for banks and improve savings rates!

    http://freakonomics.blogs.nytimes.com/2010/12/02/freakonomics-radio-who-could-say-no-to-a-no-lose-lottery/

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