Utah legislators are looking to close one loophole in Utah’s total gambling ban but may open another.
They want to eliminate vague wording that some Internet cafes have claimed allows them to operate games of chance — as long as it isn’t their primary business — which made some look like casinos.
Meanwhile, one lawmaker wants to legalize raffles by nonprofit groups to stop what he says has probably been widespread but fairly innocent lawbreaking. That likely will require a tough-to-pass constitutional amendment that would need approval by voters.
Rep. Don Ipson, R-St. George, pushed through the Judiciary, Law Enforcement and Criminal Justice Interim Committee last week a bill to tighten definitions of which types of “fringe gambling” are banned, and which are not. It goes to the Legislature early next year.
Layton City Attorney Gary Crane said the Legislature a couple of years ago enacted a bill to allow cities to prosecute and close Internet cafes that he said were popping up widely as fronts for gambling. The cafes would technically sell computer time or phone cards, but cities said that was used to play casino-style games for chances of winning sweepstakes or money.
Crane said the law allowed cities to close down many such cafes. But Ipson said some Internet-cafe attorneys started claiming they were legal under a loophole in that law — and he wants to close it to stop such legal defenses.
“They claim that what they do is similar to McDonald’s offering its Monopoly game for prizes,” Crane said.
The law currently allows promotional games of chance, for businesses such as McDonald’s, that are “clearly occasional and ancillary to the primary activity of the business.”
Crane said, “The Internet cafes claimed their real business was selling Internet time, and they just had a sweepstakes as a promotion to attract business. But in one case in Taylorsville, the business had 20 computers — but only four were actually connected to the Internet,” and the others merely allowed playing sweepstakes games.
Ipson’s bill gives a much lengthier definition of how to determine whether an allowed promotional game of chance is “clearly ancillary to the primary activity of a business.”
It includes looking at whether options to play the game for free are available, how the game and business is marketed, whether goods or services promoted for purchase are on terms that are commercially reasonable and whether any prize may be parlayed into additional opportunities to win more prizes.
Crane said the better definition helps prevent issuing business licenses to “bad actors,” and shuts them down quickly if they do emerge. “Even if they operate for only a few weeks, they can make a lot of money.”
He adds, “Utah has to be careful not to allow any forms of gambling. If we do, it opens us up to being forced to accept such things as gambling on Indian reservations,” Crane said. Utah and Hawaii are the only states that technically have total bans on gambling.
Meanwhile, Rep. Kraig Powell, R-Heber, says he is exploring how to legalize raffles that he says are frequently held by nonprofit groups.
He said the idea came when he read last year that police in Highland and Alpine were trying to raise $10,000 to buy and train their first drug dog. They were holding a raffle with a chance at a $1,000 shopping spree — but canceled it after they figured raffles were illegal under state law.
Later, Utah Attorney General Mark Shurtleff created a stir when he urged people on Twitter to buy $5 raffle tickets to the Utah Meth Cops Project for chances to win a trip to Hawaii or an autographed Real Salt Lake soccer ball.
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