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.”