State News

Sweepstakes cafes look for way around state ban

Posted November 29, 2010
Updated November 30, 2010

— Although a state ban on sweepstakes cafes takes effect Wednesday, the owners of the gaming businesses are trying to figure out a way to remain in operation.

The sweepstakes cafes sell blocks of time that customers use to gamble online or via cell phone for cash and prizes. An estimated 1,000 such businesses have sprung up in strip shopping centers statewide in the past year.

Two trial court rulings have left a ban on video-based sweepstakes machines in North Carolina largely intact, meaning games that have the look and feel of video poker are supposed to be unplugged Dec. 1.

A Wake County judge on Monday dismissed a lawsuit filed by an amusement machine company challenging the state law. Meanwhile, a judge in Guilford County last week upheld most of the law approved by the General Assembly in July but left the door open for some games when he ruled a portion of the law as too broad.

Superior Court Judge John Craig III ruled that video-game sweepstakes are considered free speech under the First Amendment, but he said the state has the right to limit games that mimic gambling.

Chase Brooks, who heads the North Carolina Internet Based Sweepstakes Organization, said he believes Craig's ruling opens the door for software changes that will allow the sweepstakes cafes to continue operating.

"Just because a place is open the very next day doesn't mean it's illegal. It means it's readjusted itself, and now it's running under the new conditions of the law," Brooks said. "It's an extremely muddied situation at the moment."

Many state lawmakers said they intended to clear away the mud when they passed the ban on video gaming last summer.

"I'm tired of play Whack-a-Mole with this industry. The North Carolina General Assembly historically spoke and said it's illegal," said Rep. Ray Rapp, D-Madison.

Player in sweepstakes cafe Sweepstakes cafes look for way around state ban

The estimated 5,800 people who work in the hundreds of sweepstakes cafes across North Carolina say they hope they won't be unemployed by the end of the week.

"I just don't see how the state can afford to put that many more people out of work," said Todd Hunter, who works in a Triangle-area sweepstakes cafe. "There's got to be a way they can come to some kind of conclusion and keep us all working."

Players also are fuming about the ban.

"A lot of people just want to come in here to play when they have free time. It's their money. They should be able to spend it how they want to," Dawn McLean said.

Noelle Talley, a spokeswoman for the Attorney General's Office, said the rulings weren't in writing yet, so she couldn't say how the state would proceed enforcing the law.

Many local prosecutors are waiting for guidance from Attorney General Roy Cooper. Talley said Cooper remains committed to banning sweepstakes cafes but wants to review the court rulings.

Brooks said industry representatives hope a new Republican majority in the General Assembly and the state's desperate need for revenue will ultimately lead to regulation and taxation of sweepstakes cafes. A ban isn't enough to hold them back, he said.

"(State officials) need to wake up and move into the 21st century. The industry will survive," he said.


This story is closed for comments.

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  • oleguy Nov 30, 2010

    Then why should I follow laws I dont like, Makes you wanta go out and break one. Lets see Jaywalking thats a good one...
    Our Govt is a waste of good money

  • dadsfavorite Nov 30, 2010

    (llf):As to your remarks,If someone has a heart attack from the state lottery,computers,or scratch offs,they are probably already addicted to them!As far as the infant that died from their parents being addicted it was the internet gambling from the computer shop,they blew all their money and did not have the money to buy food!!!! And well everybody that gambles probably don't go to church because their stuck at the computer shop's 24/7!! And by the way most people who go to church DO NOT GAMBLE!! Thanks and have a nice day!!

  • josephlawrence43 Nov 30, 2010

    Hey--just change the name to "Online Bingo"---

  • nighttrain2010 Nov 30, 2010

    >>Just the headline of this story say a great deal of the mindset of society today. Like little kids, tell us we "can't" and we will find a way.

    But the men who founded this nation weren't a pack of rule followers like you...ever heard of civil disobedience? If I don't infringe upon your rights for over half of this nation's history it was none of your business what I did. I would ask you why only in the 20th (and now 21st) century have we become a bunch of rule followers? Why aren't we more like our ancestors?

  • alwaysconcernedmom Nov 30, 2010

    With all this gambling, makes you wonder how the people that live in Vegas survive!

    Gambling is a personal choice! Period.

  • nighttrain2010 Nov 30, 2010

    >>.Let me get this straight, its ok to indulge in the State sponsored gambling activities but if any other entity other than the State/Gov. profits from Gambling just can't make this kind of stuff up....

    No, this has always been the case of the State vs. the free market and enterprising individuals. Unless the State, all hail to our leaders, get their cut, the service or product must be banned. Either 'running numbers' and gambling is moral and legal or it is not. It is not dependent upon who engages in the practice.

    Same with the ridiculous 'war on drugs'. Marijuana is only illegal because the State can not yet figure a way to tax the product. Too many seeds, opportunity to grow their own, are in the hands of the 'evil' citizenry. Give the State the opportunity to find a way to tax it and it will suddenly be legal with only 'minor' health concerns...

    If the State (in this case NC legislature) finds a way to tax these cafes, it will then be legal and only then

  • mikeyj Nov 30, 2010

    Just the headline of this story say a great deal of the mindset of society today. Like little kids, tell us we "can't" and we will find a way. My children did not act this bad at 3 years old. MJ is illegal. Let's market it for medical use only.
    The state has banned it. Suck it up and cope. States set speed limits. Society creates radar detectors. When your nailed on I40 doing 90 in a 70 zone pay the fines. How many accidents have been in the paper where "speed was a factor" is included. Mostly because some fool did not follow the yellow suggested speed limit sign going into an S turn. What about the WWII generation that was told to put blackout shades on their windows at night for fear of enemy aircraft hitting us here in the USA. Our parents followed rules. Why in this age do we as a society feel we do not have to?

  • karimquick Nov 30, 2010

    And the hypocrisy continues......absolutely hilarious.....Let me get this straight, its ok to indulge in the State sponsored gambling activities( lotteries), but if any other entity other than the State/Gov. profits from Gambling then it becomes addictive and a horrible activity of just can't make this kind of stuff up....

  • notagain1903 Nov 30, 2010

    All this and the NC LOTTERY just announce 3 NEW GAMES.... Talk about double standards!!!!!!!!!!!!!!!!!!1

  • smithla2008 Nov 30, 2010

    The lottery is gambling and "addictive" too. They even have 1-800 gambling hotline numbers printed on the lotto slips. So far as people pulling something over on the government-- look at what government has done to the people. Agreed just tax them and watch govt waste that money as well.