- Associated Press - Saturday, October 11, 2014

DENVER (AP) - The Colorado Attorney General’s office has issued a legal opinion concluding that cybercafes are a form of gambling requiring approval from voters before they can continue to operate, and they do not qualify for an exemption as sweepstakes.

It will be up to local law enforcement to decide whether to take any action against the businesses. The opinion, issued Friday, was prepared for the Colorado Department of Revenue’s gaming division.

Cybercafes sell Internet access to customers and make available a variety of computer games that give points good for cash or prizes. The attorney general says that to qualify for the sweepstakes exemption, customers need to be able to ask a business staff member, not a computer, to certify their winnings.

There are about 40 cybercafes in Colorado, industry consultant Dan Corsentino said. The businesses offer customers the opportunity, among many choices on the Internet, to play games and win prizes, he said.

Corsentino said the games are programmed to require a certain level of skill not typically associated with games of chance, the Denver Post reported Saturday (https://tinyurl.com/kyjab7m).

California, Ohio, Florida and Mississippi are some of the states that have prohibited Internet sweepstakes cafes.

The cafes, which more closely resemble retail outlets that sell a wide variety of goods in addition to providing online games, could be restricted from locating within a certain distance of casinos in the only three gambling communities - Black Hawk, Central City and Cripple Creek - that are currently licensed in Colorado, Corsentino said.

Corsentino wants to find state lawmakers willing to carry a bill that would regulate cybercafes rather than ban them. A bill was introduced in the Colorado legislature last spring that would have banned cybercafes, but it failed to pass.

“We believe regulation is better than express prohibition,” he said. “I’m hoping there is some middle ground.”

Earlier this year, the Lakewood City Council passed a one-year moratorium on the licensing of any such operations while the state figured out what to do about them.

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Information from: The Denver Post, https://www.denverpost.com

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