The Demise of the Internet Cafe

Tuesday, March 26, 2013 - 3:33pm

Not so long ago, the phrase “Internet café” brought to mind a coffee shop-type establishment in which visitors could order a cup of tea and a pastry with a side order of time online. In the days when solutions like dedicated Ethernet were neither as common nor as affordable as they are today, quick and easy access to the Internet in a comfortable setting was a big draw. Those without Internet access could find a local café to use as a base for email communications, research and other online tasks. And, those away from home in the days before smart phones and wireless access could spend a few dollars to check in along the road.

However, in a matter of a few years, Internet access became widespread in homes and offices across the country. Dedicated Ethernet became widespread and affordable, along with options like public wi-fi and free Internet access at public libraries and restaurants or traditional coffee shops. Laptops became ubiquitous, along with a wide variety of access solutions for people away from home and office. The number of people seeking out access via cafés diminished, and what had briefly appeared to be a business on the verge of explosion turned out not to be the wave of the future after all.

It’s still possible to find Internet cafes of the old model, frequented by students, travelers and a handful of people who don’t have Internet access but need to find an article or send an email. At the same time, though, a new brand of Internet café has sprung up and they’re so very different.

These new cafes sell Internet access in blocks of time just like the old ones, but with an added twist — sweepstakes offerings that make frequenting the cafes more attractive, even for those who may have Internet access at home..

Exactly how the sweepstakes element operates in an Internet café varies from establishment to establishment and perhaps by geography. The one thing they have in common, according to law enforcement officials in several states, is that they amount to an illegal attempt to circumvent state gaming laws. That’s important to state governments, as legalized gambling in casinos provides substantial state revenue.

At least one local governmental unit that investigated the issue decided the Internet café model granting “chances” for each hour of Internet access purchased and letting customers find out whether they’d won through games like digital slot machines was not gambling. But in other areas, the tide seems to be sweeping the other way. Lawmakers who view Internet access, telephone time and other services offered by these cafes as a cover for the alleged gambling operation are cracking down, and new legislation could impact all Internet café owners.

Between the decline in demand brought about by dedicated Ethernet and other access solutions and the legal complications increasingly associated with the industry, it’s easy to foresee a time in the very near future when the number of Internet cafes will diminish even further. In some states, it even seems possible that new regulations will shut down the industry entirely.


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