The city of Charleston is poised to step away from its moratorium on Internet cafes that resemble video poker arcades.

The key reason: The question over their status as games of fun or illegal gambling remains an unsettled state problem.

“To ban them outright places the burden on the city to defend the ban against the specialized interests of the industry,” the city’s legal office states in a letter to City Council.

The city would be best off regulating the cafes through zoning, where they could be considered adult-oriented businesses and situated away from churches and schools, the staff advised.

“To do nothing would open the door for these establishments setting up shop in virtually any commercial area,” the letter states.

Furthermore, lawyers advised that the industry is known to use a bevy of resources when it comes to defending itself, potentially meaning city attorneys could find themselves in front of county magistrates addressing state law.

“The industry comes to court loaded for bear,” the letter states.

Video gambling was banned in South Carolina more than a decade ago, but various attempts have surfaced to bring back arcade-style play. The latest version is through sweepstakes-style games where players buy screen time that links them to computerized gaming sites.

Months ago, City Council agreed to enact a temporary moratorium on granting business licenses for such Internet cafes, citing the unclear nature of their legal status. At the time, officials hoped the Legislature would better define the issue.

That didn’t happen by the end of the 2012 session in June.

Members of City Council expressed disappointment at the Legislature’s failure to act.

“By not taking any action, the state has referred this back to the counties and to the municipalities,” said Councilman Aubry Alexander, who has been council’s most vocal member about the issue.

The city needs to protect itself against an industry potentially set to expand, Alexander said, with zoning being the easiest method.

Charleston has three of the arcades in operation.

Recent estimates put the number of such games currently operating in the state at more than 1,000. A key difference in the current offering, versus the former video poker games of the 1990s, is that they are being billed as “sweepstakes” with pre-set winners.

Opponents, meanwhile, say the games are simulated gambling in a new Internet form, calling them “video poker 2.0.”

City Councilman Bill Moody, whose West Ashley district includes parts of Savannah Highway that saw a number of parlors during the video poker years, said he, too, is disappointed the Statehouse hasn’t provided better direction on whether the sites are legal.

He would like to see them outlawed, but if not, then taxed and controlled by the city. “If the state is not going to regulate them, then I think the city has got to do something,” he said.

On Tuesday night, the council voted to extend a city moratorium on such Internet-style cafes for another 90 days. Council will discuss the matter again next week.

Reach Schuyler Kropf at 937-5551.