NC Supreme Court upholds video sweepstakes ban

Posted December 14, 2012

— The North Carolina Supreme Court ruled Friday that the state's ban on video sweepstakes games isn't an infringement on free speech.

The decision reverses a March ruling by the state Court of Appeals, which said the move to outlaw the games in 2010 was written too broadly and was unconstitutional.

Sweepstakes halls have proliferated statewide since the state outlawed video poker machines six years ago, and operators said they plan to stay in business.

"We maintain that video sweepstakes games are no different than traditional sweepstakes games offered by restaurant chains, soft-drink companies and publishing houses," Chase Brooks, president of Internet Based Sweepstakes Operators trade group, said in a statement.

Operators will try to adjust their software to comply with the law, Brooks said, as they have in the past in response to previous court rulings.

"We will look at morphing into whatever we need to be under the rule of law to continue our business," he said.

Rudolph Morton opened the Chapanoke Square Business Center in south Raleigh only nine days ago for people to redo their resumes and play sweepstakes games.

"It's been a miserable day," Morton said after learning of the court's ruling. "We employ 18 people here. That's 18 lives that are going to be affected if we close the doors tomorrow."

Sweepstakes operators have argued that the games were simply a marketing tactic to encourage people to buy Internet time and didn't amount to gambling.

The Court of Appeals backed their stance that the ban violated the operators' First Amendment rights since sweepstakes games use "entertaining displays" to tell customers whether they had won or lost.

In a unanimous ruling, however, the Supreme Court said informing winners and losers was inextricably linked to the game and wasn't a separate act of speech.

"Operating or placing into operation an electronic machine is clearly conduct, not speech," Associate Justice Robin Hudson wrote in a 23-page ruling.

"The interest in combating the social ills of gambling and gambling-like activities is unrelated to the suppression of free expression," Hudson wrote. "The restriction imposed here is no greater than necessary because the statute burdens only sweepstakes conducted in a manner that encourages repeated, addictive, gambling-like play through the video display; the statute does not burden or ban any video games outside this context of sweepstakes operations."

The gaming industry has urged state lawmakers to legalize video sweepstakes and then regulate and tax the games, which they say would provide needed revenue.

"It benefits schools. It benefits the state. It helps create jobs for the state," Morton said.

Legislative leaders weren't receptive to that stance Friday.

Senate President Pro Tem Phil Berger applauded the Supreme Court's ruling, noting the sweepstakes ban had overwhelming bipartisan support in the General Assembly.

“Now that the question is settled, I expect our law enforcement officials will begin enforcing the law,” Berger, R-Rockingham, said in a statement.

Before law enforcement agencies can begin cracking down on sweepstakes businesses, a Guilford County judge needs to lift a stay of the law he issued when operators first filed suit.

Pam Walker, a spokeswoman for the state Department of Public Safety, said lawyers for her department will have to consult with the Attorney General's Office regarding actions after that point. The Division of Alcohol Law Enforcement, which is part of DPS, is the state agency tasked with enforcing gambling laws in conjunction with local sheriffs and police.

"I stood with law enforcement to push for a ban on this kind of gambling, and our lawyers have argued for years for the right to enforce it. The Supreme Court got this one right,” Attorney General Roy Cooper said.


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  • yyyyy Dec 19, 2012

    I can not understand in this day and age why this issue of Sweepstakes is even being addressed,. With all the problems in this state this is what we are worried about. I have lived in N.C for 19 years and still do. I have worked in the Casino industry for 23 years.Sweepstakes IS NOT THE CASINO INDUSTRY I have seen the good and the bad of this industry. IT IS NO SECRET THAT GAMBLING CAN DO HARM TO FAMILY'S WE ALL KNOW THAT CAN YOU PLEASE COME UP WITH SOMETHING BETTER THAN THAT IT'S VERY OLD. However N.C feels That the lottery, drinking THAT COULD KILL AND SMOKING THAT COULD KILL is OK as long as they get there $$$MONEY$$$. Am I missing something here. From what I understand the sweepstakes industry on several attempts tried to be regulated and help the state's deficit so what could the problem be. Could it be that N.C. is worried about your HEALTH and the HEALTH of your family ? Who are we kidding here do they really think we are that uneducated.

  • mac240 Dec 18, 2012

    Bring in casinos and get rid of these seedy joints!

  • wrals5u Dec 14, 2012

    I want to thank all of those who belong to the American version of the Taliban for watching out for me. Heaven knows I'll easily succumb (I can use that word, right?) to those evils of gambling that aren't link to those sacred words, "North Carolina Education". Praise be to the General Assembly and all of its hypocrisy under the name of freedom.

  • philipw Dec 14, 2012

    The lottery needs to be shut down, too. It won't be because a third of its money goes to news media, to "advertise" the lotteries and the results. A third goes to prizes and salaries; and the last third (eventually) goes to schools - but is largely send to make up for other funding cut out by the State. Lotteries and gambling are taxes on people who are bad in math.

  • tatermommy52 Dec 14, 2012

    The courts this week banned sweepsteaks, banned right to life license plates, and banned cop killers from death row. We need to tell the courts that killers ban their right to life and welcome to death row.

  • Crumps Br0ther Dec 14, 2012


    Can we get the lottery shut down now, too?

    Why do you want to deny the children of this state an education

  • 007_Bat Dec 14, 2012

    The bottom line is government has took it upon themselves to take away AGAIN a freedom of decision the American people should be responsible for making. But to read some of your posts here, you want someone to do your thinking for you.

  • jillianbluiz Dec 14, 2012

    Sweepstakes facilites employ people. Has anyone considered those losing their jobs right before Christmas? Unemployment is rampant, but let's send some more folks home. And yes, I know people have gambling problems, I was married to one such rocket scientist; that was his problem. But now my daughter, a college student, doesn't know how she will support herself through school. Geez, how bout a strip club? NOBODY blows money in THOSE morally upstanding, completely legal businesses.

  • Brian Jenkins Dec 14, 2012

    So I can scratch off a piece of cardboard but I cant click a mouse to gamble? Republicans are here to save us! "Small gov" and all. vinylcarwraps23

    How does this make the size of the government any bigger? Pretty sure this makes it neither bigger nor smaller. When people refer to "big government" they mean the government spending excessive amounts of money. They don't mean "doing their job makes them big".
    December 14, 2012 2:20 p.m

    Everytime a law is created or upheld gov grows. Someone has to enforce the "new" laws correct?

  • bgibson3 Dec 14, 2012

    If you think Harry Brown (Onslow County), who was on his honeymoon (in Charleston??) didn't know what was going on then you're naive. A car dealer from the Jacksonville area... When the Legislature didn't adjourn immediately after the other voting, everyone knew something was up. After the final Budget approval, they always close session and get the heck home. And, this time they did not. Harry could have proxy voted, I think, and chose not to, as did the other Republican. In this day and age, no one is out of touch that much.

    The State Lottery is for a bunch of losers. The process is exactly opposite for which we honor "Robin Hood". He took from the rich (few) and gave to the poor. The NC Lottery takes from the many (many of whom are poor) and gives to the few (who quite often squander their new found riches). And in the process a large percentage of the income gets siphoned off.