Sweepstakes cafes played the game, and lost

The Daily Advance

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When Internet sweepstakes cafes were first permitted by local governments a couple years ago, the operators knew there would be a risk that the fun and games might not last forever.

Now, it appears that time has come.

The state Supreme Court on Dec. 14 ruled that a 2010 state law banning sweepstakes machines as a form of gambling — passed to close a loophole since video poker machines were outlawed in 2007 — is legal and constitutional.

The court rejected the industry’s argument that video sweepstakes parlors have the same free speech protections given to video games. The court overturned Superior Court and state Court of Appeals decisions that found laws banning the games violated free speech rights.

Thus when the ruling takes effect on Jan. 3, sweepstakes parlors will presumably have to be shut down for good. The N.C. Sheriff’s Association has directed the state’s 100 county law enforcement officers to enforce the state law on that date.

Industry lawyers vow to examine their options. But the only apparent one we see is getting the U.S. Supreme Court to overturn the N.C. Supreme Court. That is less likely than winning a royal flush at the parlor.

The ruling will no doubt anger many players and operators, many of whom are probably in denial.

Jim Sutherland, owner of Past Times Internet Sweepstakes Café, informed City Manager Rich Olson that its software vendor has made modifications that he believes makes them compliant with state law.

But while the issue of software was addressed by the Supreme Court, the overarching effect of its ruling was that online sweepstakes games is gambling, and is illegal.

Olson said the city’s view is that unless sweepstakes owners can provide a letter from the Attorney General’s office or a court that the software is compliant with state law, the city considers the Supreme Court ruling final.

The conditional use permits approved by City Council — which govern all sweepstakes cafes — requires them to abide by all local, state and federal laws, “with which they are now not in compliance.”

Just two days before the Supreme Court ruling, the city approved a fifth Internet sweepstakes café permit for a place at South Park on Weeksville Road.

Now the city plans to start the process of revoking the permits of approved cafes — a process similar to the approval process that involves public hearings.

Police Chief Eddie Buffaloe has been instructed to meet with all café owners to make sure they shut down Jan. 3. Those that don’t will be considered lawbreakers.

Elizabeth City is not alone. Currituck County has its share of sweepstakes cafes that will have to comply, and the sooner the better, according to a recent survey of Moyock residents who ranked Internet sweepstakes operations as their second biggest dislike. Their first dislike was battling beach-bound traffic through Moyock during the summer.

In the past, we’ve made the argument that as long as the cafes were legal, they should be taxed like any other business and generate revenue for the state’s cash-starved budget.

But that didn’t happen, and now with the high court’s ruling, this latest chapter of gambling will soon be closed.

That is for the best. Just ask Lisa Scalder of Elizabeth City, who now attends Gamblers Anonymous meetings after experiencing the pitfalls of losing everything she had.

“I’ve seen people go into these sweepstakes cafes happy and come out sad and depressed because they lost everything,” she wrote in a recent letter. “I’ve seen people whose children suffer because their parents gamble away everything and there’s no money left for food or normal expenditures … Trust me, I’ve been there and being out on the limb all by yourself is a lonely place to be.”

Comments

Sweepstake / Internet Cafes

I find it amusing that the state government declared and made illegal sweepstake cafes and yet some are still in operation. Not in Elizabeth City ... but Ahoskie has at least one still up and running. Is the City of Ahoskie not a part of North Carolina? My understanding is that the enforcement is up to each locality. I guess it is not so much what the law says as to how it is interpreted.

NO STATE AND COUNTY TAXES

Players enjoy Internet sweepstakes games at the Triple S Cafe in 2010. The N.C. Supreme Court has ruled the games illegal as of Jan. 3. They have bingo,NC Lottery and they are concerned about the poor people who buy beer and addicted to tobacco that are killing In the USA, about 438,000 people die from smoking-related illnesses per year!This is a big lie from Hell! The truth is that the County and State are not getting ANY TAXES from Internet sweepstakes games! That is the problem,they do not give a damn about the poor people! The bottom line is MONEY the root of all EVIL!

Did you elected officals ban Wheel Of Fortune to?

As I understand it you cannot hold a sweepstakes in NC, using an electronic device and reveal the prize in an entertaining way. So when I watch Wheel of Fortune (which is using an electronic device) and they announce the winner of their SPIN ID (which I believe to be a sweepstakes), and hey it is the most popular tv game show in america (wouldn't that be revealing the prize in an entertaining way)? So are the local tv stations that air Wheel of Fortune breaking NC State Law? If so will they be treated like the sweepstakes locations and all their equipment seized? Just one person's question and opinion. Thanks This video link is an example of an AllState Sweepstakes, we believe also might break NC SweepStakes law. http://youtu.be/zCMvvS1S0ow

Gambling promoters SUCK...money from people.

Wheel of Fortune doesn't require a participant to invest any funds. They have nothing to lose and everything to gain. Sweepstakes cafes take money from players, something "Wheel" doesn't do. I just thank God the damned things are found to be illegal and if that makes sweepstakes cafe owners unhappy, fine. :)

What doesn't

I am not big on opinions, but i'll appease you. But I'll throw facts in as well. First to be leagl in NC or any state a sweepstakes cannot require a purchase. Everyone of these places will tell you how you can partipicate for "No Purchase Necessary". However just like monopoly at McDonalds you may have to jump thru some hoops, like send in a Self Addressed Stamed Envelope. But you are wrong is saying they require a purchase. Next, So should we shut down everything thats "Sucks" your money? Like movies, or that $12 popcorn. Maybe we should stop people from attending pro football games or concerts, where they can spend hunderds just on a ticket, not to mention the almost $20 beer. The list goes on and on and you know it. Last, you odds of winning in most sweepstakes locations are better than Vegas. How is that??? I am glad you asked. Nevada state law requires a slot machine to payout atleast 75% (granted most casinos pay better), however I have not seen a sweepstakes company whose odds were below 90%. So why would they do that, it's simple they do need some winners, or no one will ever come back. Maybe you like gov't controlling your life, but as for me i'll take freedom. BTW, the Wheel of Fortune part does look like it breaks state law, along with most every other sweepstakes/contest on tv.

Terrible Reporting

You are a terrible reporter. First you said the court deemed it gambling, but they didn't. Actually the NC Supreme Court said it wasn't gambling. Next you said the NC Sheriff's Assoc. directed law enforcement to enforce the law, but that's not true. They can give advice, but they have no power to direct anyone to do anything. The Sheriff's association does say enforcement can begin on Jan 3rd, but they contridict themselves when they said before that they were requesting advice from the NC Attorney General. Last you quote the city manager as saying unless they can provide a letter from the attorney general or a court the city considers the supreme court ruling final. He then goes onto say "requires them to abide by all local, state and federal laws, “with which they are now not in compliance.”". Well unless he has a side job as a prosceutor or law enforcement, what legal grounds does he base that on. The NC Supreme court actually said to the sweepstakes company if you can find a way to play the games and reveal the prize in a non entertaing way, you have found a way around the law. So if the City Manager doesn't respect the courts ruling, I would guess he is opening the city up for a big liability. And likely violating 1st amendement rights.

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