WRAL Investigates

Lawmakers to take aim at 'sweepstakes cafés'

Posted March 5, 2010 5:07 p.m. EST
Updated March 5, 2010 6:45 p.m. EST

— House Speaker Joe Hackney predicts state lawmakers will quickly outlaw so-called sweepstakes cafés when they reconvene in May.

The businesses, which are sprouting up in strip shopping centers across North Carolina, sell players blocks of time to play games of chance on computers or cell phones. The odds are long, but players who win can get a cash payout.

"We think it's illegal," Hackney said, noting the General Assembly banned video poker in North Carolina four years ago. "It's not what the legislature intended."

Sweepstakes café owners argue their business is different than video poker. They compare it to a scratch-off prize game at fast-food restaurants.

"If the state has some concerns about it, tax it (and) regulate it," said Chase Brooks, who owns a sweepstakes café in Fuquay-Varina.

Some legislators said they are willing to entertain Brooks' suggestion.

Senate Finance Committee Chairman Clark Jenkins said the state should "take a serious look" at regulating the businesses because they could produce needed revenue.

Sen. Dan Blue, D-Wake, said he's "exploring" the idea, and Rep. Nelson Cole, D-Rockingham, said he could go either way on the issue.

Hackney said he doesn't think those views will carry the day.

"I believe the prevailing view this time, as before, is to ban it entirely," he said.

Sheriffs statewide oppose the sweepstakes cafés and don't see any difference between them and video poker operators, said Eddie Caldwell, executive vice president and general counsel of the North Carolina Sheriffs Association. His members say the new cafés create the same financial hardships for customers and their families, he said.

"Their spouse or their parent got paid, went to a place that had these type (of) gambling machines, lost their week's wages gambling (and) they can't pay the rent," Caldwell said.

Sheriffs haven't run across the same problems with the state lottery, he said.

Some municipalities already have adopted zoning rules to slow the proliferation of sweepstakes cafés. Wilson has such rules in place, and Rocky Mount and Wilmington are drafting regulations.