Lawmakers seek new crackdown on video sweepstakes

Posted June 14, 2017 6:43 p.m. EDT
Updated June 15, 2017 9:53 a.m. EDT

— Some state lawmakers are trying again to limit video gambling operations in North Carolina while struggles over the games' legality crawl through the courts.

An amendment added to House Bill 577 in the Senate Judiciary Committee on Wednesday would make it a felony to possess more than four such machines within 100 feet of any other electronic machine or device.

The 100-foot provision, says sponsor Sen. Andy Wells, R-Catawba, "is so you couldn't take an old grocery store, cut it up into cubicles and put four machines in each one.

"This doesn't change the legality of anything," he explained. "It just says you can't have that many of them."

Several times in recent years, legislators have tried to outlaw video gambling in its many guises, from video poker or bingo to video sweepstakes, a "server-based promotion" in which players buy a prepaid card with a number of entries that are then revealed one by one "using an entertaining display" as if the player were gambling.

Each time lawmakers have tried to ban the games, the game makers and business owners have fought the latest law in court on a variety of grounds, winning legal injunctions against its enforcement. In some cases, they've reinvented games to narrowly skirt the statutes as they change.

"These big game rooms aren't going in Raleigh and Charlotte. They're going into smaller towns where [local officials] think they're getting business that they need, and what they're doing is getting the money sucked out of their community," Wells said. "I think this is a way to get them down to a size that the small towns can manage, can handle."

Wells said one small town in his district has two large video gambling "rooms."

"I dug into it a little bit and found out [local officials] were getting an inspection fee from the rooms for $70,000 to inspect their machines. Now, we've never authorized it, but we never told them we couldn't," he said.

Wells said in another town in his district, a sweepstakes business was turned down for an occupancy permit because city leaders found it wasn't registered with the Secretary of State's Office as it claimed.

"They opened anyway. So, the city's hired an attorney to get an injunction to shut them down," he said. "I couldn't conceive how somebody could just move into a building where you don't have the right to open a store. You just don't do that."

Wells added that internet sweepstakes businesses in Fayetteville, Burlington and Wake County have been linked to gang activity.

The measure will be heard next in the Senate Rules Committee, mostly likely on Thursday.