NC House pulls plug on Internet Cafes

Published 10:32 am Saturday, July 10, 2010

RALEIGH – By Dec. 1, a handful of local businesses will be forced to close their doors.

On Wednesday, members of the North Carolina House of Representatives crossed party lines to ban Internet Cafes that have been popping up statewide over the past year.

The House vote was 86-27 in favor of the ban. Local House members – Annie Mobley (D-Ahoskie) and Michael Wray (D-Gaston) – were divided over the issue. Mobley sided with the minority in an effort to keep the businesses open while Wray favored shutting them down.

All totaled, 38 House Democrats joined 48 Republicans in banning the cafes. Mobley united with 23 other Democrats and three Republicans in opposing the measure.

The NC Senate had earlier approved the ban, one that affects two Internet Cafes in Ahoskie, one each in Windsor and Rich Square and another in rural Northampton County just on the outskirts of Murfreesboro.

In May, the Northampton County Commissioners and the Murfreesboro Town Council respectively enacted moratoriums on the opening of Internet Cafes until the NC General Assembly decided how to regulate those types of businesses.

Two months earlier (March), members of the Ahoskie Town Council unanimously approved a zoning ordinance and business fee schedule for those operating an Internet Café.

Neil Hoover of High Point, representing H&L Enterprises, a firm that operates Internet Cafes across the state, including one in Ahoskie’s Newmarket Shopping Center, explained to the Ahoskie Council that these businesses operate by the means of patrons paying to use a computer, whether that usage is for access to the internet (for online games, visiting social networks, researching information, etc.) or to access computer programs (word documents, spreadsheets, etc.).

When asked if the patrons of his type of business were those without a home computer or those with such a device, but did not have access to the internet, Hoover answered, “Not necessarily. Some just like to come in and enjoy the social environment. The majority of our clientele are middle-age women.”

Hoover added that his business charges 20 cents per minute for computer access. The business also sells office supplies (notepads, pencils, pens, markers) as well as offering fax and copy service.

Internet Cafes are said to employ 10,000 individuals across the state.

Those opposing such places of business argued they were nothing more than gambling casinos.

Meanwhile, there are those that believe the state can profit from such businesses through regulation and collecting tax revenues. One such entity is the Entertainment Group of North Carolina. They support a legal version of video gambling and have estimated that the state could profit up to $500,000 annually by regulating these businesses.

In an e-mailed statement, William Thevaos, President of the Entertainment Group of North Carolina, said, “We continue to believe that regulating and taxing video gaming is the best public policy for the State of North Carolina. We will look at all options available to us, including our legal avenues and the advances of technology as we follow the implementation of this law allowing the industry to continue to do business.”

The approved bill now goes to the desk of Governor Bev Perdue who, according the statewide reports, is expected to sign the legislation, making it effective Dec. 1. Upon her signature, those operating such businesses after Dec. 1 would be charged with a misdemeanor. Repeat offenders could face felony charges, which may carry a prison term of up to 30 months.

According to the wording of the House bill, marketing games conducted by soft-drink companies and other retailers that require the consumer to enter a code on a company’s website are not affected.