INTERNET CAFES GOOD FOR STARK COUNTY? NOT IF YOU ASK CANTON WARD 8 COUNCILMAN EDMOND MACK

UPDATED/REVISED:  10:58 AM

Editor's note:

Gonzalez has pointed out to the SCPR that townships are not part of the revenues that are dispersed to local governments throughout Ohio.

Some counties, cities and Ohio's schools are.

Gonzalez also looks takes a perspective different from that of The Report.  He sees the discussion solely about whether or not townships will loose money.

The Report extrapolated from the issue articulated upon in the Rink report and conjectured as to whether or not he, Giavasis as compared to DeWine and Mack favored or disfavored Internet cafes.

Gonzalez does not say one way or the other if he favors or disfavors Internet cafes.

The same appears to the SCPR to apply to Giavasis.

Gonzalez says he have never talked to Giavasis about the matter.  The SCPR in using the expression "Gonzalez joined with Giavasis" was not meant to imply that the two had had a discussion.  "Joined" as in the SCPR's take of their sharing a perspective.  Language in the original blog changed to make it clear that The Report's take is a matter of opinion.

UPDATE:  09:13 AM - RESPONSE TO BLOG FROM PLAIN TOWNSHIP TRUSTEE LOUIS GIAVASIS:

Martin,

At the time Plain Township went through the process to add zoning regulations for this internet sweepstakes they were not illegal at the time we did this. These business's were opening everywhere and the state did not regulate them so we went through what I believe was the proper process to try do it ourselves. We added language to our zoning text that outlined where they would be allowed to open and not in residential zoned area's, we wanted to make sure they met safety guidelines for buildings they opened in, we submitted that language to the Stark County Regional Planning Commission, public hearings were held, our zoning commission held a hearing and so did our board of trustees. The language was approved by all three board members not just myself.  

Now as the article you mention I state in it " I think we all were surprised at the amount of revenue they generated", and yes they amount was substantial but in no manner do I condone any illegal activity or some of the other things that you mention at times happens in some of these establishments such a tax evasion and some of the other things. The reason for our regulations was to try to curtail illegal activity by making the owner's and operators register with us, license with us, and follow the all county occupancy building codes fire safety codes. The other purpose was so we could provide this information to law enforcement.  We were doing something the State Could not or would not attempt to do, regulate them and that is what I believe the legitimate owners in this industry in Ohio was asking for, regulate us, tax us, force the illegitimate operations out of business, not all of us. Now I am sure no illegal activity happens in or around Ohio four casinos's as the honorable councilman from Canton states, I think those major casino's foster other elements he mentions such as prostitution, drugs and other criminal activities. 

As that articles also mentioned the State of Ohio could not get these owners to register and provide information about the number of machines among other things, our zoning department did. The hypocritical things is that Canton City benefits financially directly from Ohio's 4 casino's as non of the Townships in Stark County get a dime from their legalization in Ohio as the revenues that come back to the local level are only shared with the Stark County General Fund and Canton I believe?  I did not read anywhere that Mr. Mack is willing or wants to introduce an Ordinance to refuse those dollars from Ohio's 4 casinos because of the criminal element. I those 4 casino's in Ohio will not create very criminal activities mentions since Ohio says they are legal to operate and Canton benefits from. The bottom line is evident and does not change the fact the Ohio Gaming Lobby successfully lobbied to get skill games parlors eliminated and while doing it the leadership in the Ohio Legislature told everyone member to return any campaign contributions they may have received from the skill game industry or business owner, but only before passing a law to eliminate them? 

The bottom line is Plain and other townships will continue to take cuts in revenues in multiple area's and will comply with whatever the State of Ohio law says, Canton will continue to profit largely from this so called legal gambling industry and everything that comes with it while no other subdivision in the county gets a nickle. It's laughable, and Hypocrisy is what it is called Martin.

Lou Giavasis

ORIGINAL BLOG

A number of Stark County government officials do not share the the view of Ohio Attorney General Mike DeWine and Canton Councilman Edmond Mack that Internet cafes are not good for Ohio's localities.

According to Matt Rink of The Repository (Communities could lose funds if Internet cafes close, June 16, 2013), Stark County has a number of public officials, desperate for monies to fund their local governments, who do not share the DeWine/Mack viewpoint.

However, unless some kind of legal action prevents the enrolled Ohio House Bill 7 (HB 7) from becoming effective on September 4th (LINK), it appears that the end is near for the cafes in Stark County and, of course, all of Ohio.

The Stark County delegation split 50/50 on passage of the bill.

Republicans Scott Oelslager (Plain Township) and Christina Hagan (Marlboro Township) both voted for passage.  However, Republican Kirk Schuring (Jackson Township) voted against passage and thereby joined Canton Democrat Steve Slesnick in opposition.

The overall vote by the House (66 for, 29 against [LINK] and the Senate (27 for, 6 against [LINK]) was not close.

The likes of Schuring and Slesnick argued for tight regulation whereas most of the legislators constituting the majorities took a more moralistic and evangelistic approach (Christina Hagan but not likely the motivation of Schuring and Slesnick) in wanting to make it next to impossible for the cafes to operate profitably.

DeWine and Mack, in the view of the SCPR, took the appropriate tack.

For them it appears that law enforcement problems they associate with Internet cafes were persuasive that HB 7 should become the law of Ohio.  In fact, DeWine was very helpful to those opposed to the cafes' spread in terms of providing them with non-religious based support in their opposition.

The Ohio Legislative Service Commission (LSC) analyzed the bill thusly: (click on graphic to enlarge it)

Rink reported that Plain Township (to the seeming delight of Democratic Trustee Louis Giavasis) had revenue of $135,000 from licenses issued in December, 2012 and January, 2013.

Jackson Township fiscal officer and Stark Democratic Party chairman Randy Gonzalez appears to the SCPR to have joined Giavasis in the Rink piece as being in favor of the cafes for the revenues the produce to township operations.

The only other Stark County local government entity that realized meaningful revenue was Perry Township.

The SCPR thinks the neither understands the mentality that abounds in Columbus these days with the Republican religious right (exemplified in Stark by Christina Hagan) pretty much being in charge of Ohio's legislature.

Gonzalez, in particular, the SCPR thinks, is way off the mark in his posing that the passage of HB 7 was some sort of plan to deny a source of funding for local governments.

Duh.  Doesn't a major share of state revenues from the recently authorized casinos go to local governments?  [LINK]

Giavasis is much more credible in suggesting that perhaps Ohio's casinos were a significant factor in tapping into the inclination of religiously motivated legislators to place barriers to the spread of already profligate state sponsored/enabled gambling in Ohio.

Implicit in Giavasis' point is the hypocrisy among state legislators (including some of the religious right) in giving the go ahead for certain forms of gambling which serve as a "cash cow" for the coffers of state government.

But then he loses it in saying:  “Again, Columbus is giving a knuckle sandwich to the mouth of local government.”

Apparently, he had talked to Gonzalez.

The Internet cafe industry is poised to try to get Ohio's voters to overturn the work of the Ohio General Assembly.

For them to succeed, they will have to wage a successful "urban" versus "rural" political war.

The SCPR doubts that the pro-cafes can win that battle.

For there is another side to this story that is not bound up in taxing sin (notwithstanding Gonzalez's claim in Rink's writing:

Gonzalez said the Jackson’s ordinance “wasn’t really a money grab,” but rather an attempt at regulation done through its zoning department.

Gambling costs taxpayers, pure and simple!

Not only the gamblers and their families, but communities which have gambling establishments in their midst.

Canton Councilman Edmond Mack (a leader on Canton City Council in gaining passage of a moratorium on new permits to operate within Canton, pre-effectiveness of HB 7) in response to the Rink piece articulated compelling (non-religious) arguments why the passage of HB 7 is good for Ohio and derivatively for Stark County, to wit:

Mr. Olson,

I did read the [Rink] article with great interest.  My reaction is as follows:

There can be no doubt that the Ohio General Assembly placed a huge financial burden on municipalities by substantially eliminating our local government funds.  For this reason, I respect the views articulated in the article.  However, from the City of Canton’s perspective, just because municipalities are searching for new revenue sources does not mean we should embrace questionable and illegal industries within our jurisdictional borders.

With respect to internet sweepstakes cafés, I agree with Attorney General DeWine when he remarked: "The real purpose of these sweepstakes is not to promote the sale of a product; rather it is to get people to play the electronic machines. These operators answer to no one and often rip-off their customers.”  DeWine, M., Ohio Atty. Gen., Gambling in Ohio: A Guide to What is Legal, What is Not, and What Needs to be Fixed, [LINK substituted by SCPR for Mack's long form cite]. 

Keith Whyte, executive director of the National Council on Problem Gambling, continued:

“What we’ve seen a lot with these Internet sweepstakes cafes is it’s a way to get around gambling laws.   The only reason people are going to these facilities and spending so much time and money is because it’s gambling. If it wasn’t gambling, it wouldn’t be popular.”  [LINK substituted by SCPR for Mack's long form cite].

However, the potential for illegal gambling is only part of the problem.  In addition to tax evasion and other financial illegalities documented by the article, with internet café arcades comes a marked increase in incidental violent crime.  As examined by The New York Times, skill game and internet café arcades are considered “magnets for crime because they usually have large sums of cash on hand.”   [LINK substituted by the SCPR for Mack's long form cite]  This results in a significant burden on our already strained police and prosecutorial services.  This is likely the reason why Cuyahoga County Prosecutor Timothy McGinty issued a statement in support of the Ohio General Assembly’s efforts to end this illegal industry [to wit:] (click on graphic to enlarge it)

For the City of Canton, the Ohio General Assembly did the right thing by eliminating this illegal industry with the passage of HB 7.  I will not criticize this effort due to the fact that Canton can no longer tax this parasitic industry.  Canton would probably stand to financially benefit if we could tax illegal drug use or prostitution.  That does not mean that we should seek to have these indisputably destructive industries de-criminalized.  As with illegal internet sweepstakes cafés, from my perspective, the cost to Canton simply outweighs the benefit.

Edmond

Could it be that if Internet cafes were to become prolific enough in Plain, Jackson and Perry and turned out to be the source of a huge law enforcement problem, then, perhaps, maybe Giavasis and Gonzalez would not be so supportive of their spread?

Has their judgment of what is good for their respective communities been clouded by their incomplete take on the money issues?

Gaining revenues is one thing.

But ignoring the likely costs and potential attendant law enforcement problems is quite another, no?