Bill filed to tax, regulate sweepstakes
Posted April 3, 2013
Raleigh, N.C. — Reps. Michael Wray, D-Northampton, and Jeff Collins, R-Nash, have filed a bill that would legalize, tax and regulate video sweepstakes.
House Bill 547 would reverse course on the state's current policy.
Lawmakers have been trying to stamp out sweepstakes, which came into the state after stand-alone video poker machines were outlawed in 2006. After several legal setbacks, the state Supreme Court in December upheld a state law banning the games.
Sheriffs and district attorneys across the state, including in Wake and Cumberland counties, have stepped up enforcement against the games over the past month. However, enforcement is still spotty.
Under the Wray-Collins bill, sweepstakes would be regulated by the state Department of Commerce.
Sweepstakes parlors would pay an annual excise tax of $2,000 per establishment and $1,000 per machine. In addition, the bill would crate a 4 percent gross receipts tax.
The bill would also allow local governments to impose limited excise taxes on the machines but would prohibit cities from outlawing the machines.
Wray represents the area that includes the Royal Palace Theater in Roanoke Rapids, a building owned by the city that makes extensive use of sweepstakes machines to lure customers.
The state is missing out on a lot of revenue from sweepstakes games, he said, estimating that his proposal would raise $300 million to $400 million annually.
"This is America. This is North Carolina. People should have the freedom to do what they want," he said.
People have the option to play the state lottery or go to the movies, Wray said, and sweepstakes games are just another form of entertainment.
"At the same time, the companies need to do what they should," he said.
Legalizing and taxing the games would make sure all the games were "on the up and up" and obeying state rules, he said. Right now, there are different rules for the games in different cities, and law enforcement agencies are confiscating machines in still others.
"This is about jobs," he said, noting that sweepstakes parlors employ people directly and fill retail spaces that would otherwise be vacant.
The sweepstakes industry welcomed the proposal, saying it would end the "legal uncertainty" over the games and restore lost jobs.
Still, the bill will almost certainly face opposition – if it's heard at all.
Asked if thought the House would take up the sweepstakes bill, House Speaker Pro Tem Paul "Skip" Stam said, "I don't think so."