Despite ban, sweepstakes cafes fight to stay open
Posted January 1, 2014
Updated January 2, 2014
Raleigh, N.C. — A year after the state Supreme Court upheld a North Carolina law banning sweepstakes cafes, some of the places where people play fast-moving computer games that mimic Vegas-style slots are still open for business.
Over the last year, sweepstakes cafes have been shut down by police, and their owners and employees have been charged with violating the law. Cumberland and Durham counties are among the jurisdictions that have cracked down on the gaming parlors, but some of those arrested have been acquitted of criminal charges.
A few of the operators have turned to the courts for help. They've asked judges to issue orders preventing law enforcement from closing their stores, saying they have new software that puts them in compliance with the statute.
The strategy has created an air of uncertainty in some communities that have been trying to close sweepstakes parlors they say prey on the poor.
While some cities and counties are aggressively trying to shutter the businesses, other communities are allowing them to stay open until key issues are resolved.
Wake County is one of the locales that has taken a wait-and-see approach, and that aggravates Garner resident Zelda Smith, who has four sweepstakes cafes within a mile of her home.
"They get out of hand. I try to stay as far from it as possible," Smith said Thursday. "Every time I look, I see blinking lights everywhere."
One of the Garner businesses was robbed recently. Police investigated the robbery but left the sweepstakes parlor open.
"Each individual jurisdiction has to set priorities. Unfortunately, law enforcement and prosecutors are underfunded," Attorney General Roy Cooper said.
Most communities want to enforce the ban, Cooper said, but many cases end up in court. There's so much money in video gambling that the industry can afford long, expensive legal fights.
"They know that, if they create enough turmoil, that sometimes law enforcement and prosecutors can be discouraged from going after these industries," he said.
The Attorney General's Office is working closely with local law enforcement and prosecutors, providing legal advice and assistance to close the operations.
Parlor owners and sweepstakes industry representatives didn't respond to requests for comment.
North Carolina lawmakers first passed a ban on video poker and all other electronic gambling in 2006. The industry quickly adapted, introducing new sweepstakes games they said complied with the law.
Lawmakers responded with new legislation in 2008 and 2010 making it unlawful to possess game terminals that simulate slot machines or are used for the display of electronic sweepstakes. The makers of sweepstakes software then sued the state, saying the ban violated their Constitutional free speech rights. The resulting court fight dragged on two years, culminating in the December 2012 Supreme Court decision upholding the ban.
After the ruling, law enforcement agencies began raiding cafes, seizing computers and making arrests. But sweepstakes owners protested, asking lawmakers to look at new software that reveals the winners in advance, a move they say keeps them in compliance with the law.
With most sweepstakes operations, patrons buy Internet time that gives them the opportunity to uncover potential cash and prizes with mouse clicks on a computer screen.
To play at the cafes, customers get prepaid cards and then go to a computer to play "sweepstakes." Winners go back to a cashier with their cards and cash out.
Judges have dismissed charges against a Duplin County sweepstakes operator and have stopped Onslow County deputies from seizing sweepstakes machines that promote the sales of gift cards.
Ernie Lee, the district attorney for both counties, said he was disappointed with the recent cases but said it wouldn't stop them from "enforcing the law."
"I think law enforcement and prosecutors are just going to have to keep plugging away at this," Cooper said. "I think it's just going to take a period of time before its eradicated."
Wake County Sheriff Donnie Harrison said he doesn't think the law is so clear, so county prosecutors are sending cases to a grand jury.
"I think the DA's office has been very cautious about it. They want to make sure they've crossed all the T's and dotted the I's, and that's the reason we're going to the grand jury," Harrison said. "Let the courts settle it."