The Pew Charitable Trusts

States are starting to take a look at Internet cafes that offer games with prize money to see if these operations are actually illegal gambling parlors in disguise.

At issue in many states are Internet cafes that offer online "sweepstakes" with cash awards. Customers purchase time on a computer or, in some cases, long-distance phone time. When they do this, they are given free entries into a sweepstakes. They can see if they won by going online and playing a game that looks like a video slot machine operation.

Those in the gaming industry say this is no different from customers playing the McDonald's Monopoly game, which is a sweepstakes. Customers buy a Big Mac with fries or an order of chicken McNuggets. When they buy the food, they get a free entry into the Monopoly game, which offers prizes.

State gambling laws vary widely, but there is a growing effort by states to examine whether their current laws allow cafe gaming, and if so, whether they should.

The issue is big in Florida, where two state lawmakers have already laid out proposals for next year aimed at cracking down on illegal gambling at Internet cafes. The wrinkle there, however, is that other Florida legislators are in the Internet cafe business themselves, reports The Orlando Sentinel . State Representative Peter Nehr opened an Internet cafe last year in Palm Harbor, and State Senator Mike Bennett is part-owner of a sports club that houses one, the paper says.

In Georgia , Governor Nathan Deal and top law enforcement officials recently kicked off a new campaign aiming to close 100 Internet cafes that the state says are skirting state laws against gambling. "Establishments falsely claiming to be Internet cafes are not welcome in Georgia," the governor said . 

Some states have already acted and are seeing mixed results. A Virginia law that went into effect July 1 has not put Internet gambling cafes entirely out of business, The Richmond Times-Dispatch reported last month. The paper found at least two such facilities operating within that city. Similarly in North Carolina , several Internet gaming cafes continue to operate months after a 2010 law went into effect, thanks to software upgrades that they say allow them to comply with the law, The Mount Airy News reported . 

Meanwhile, the attorney general in Massachusetts issued new regulations this summer banning illegal gambling at Internet cafes while Ohio 's AG lent his support to legislation that would regulate gaming at Internet cafes and make it subject to oversight.

Critics say it's not hard to distinguish between legal Internet cafes and illicit operations. "You'll know it's a gambling operation," said Georgia Bureau of Investigation Director Vernon Keenan in The Atlanta Journal-Constitution . "It is very evident. There are legitimate Internet cafes and their business is information access. But that is much different than commercial gambling."