State News

Lawmakers ban sweepstakes games

Posted July 7, 2010 10:50 a.m. EDT
Updated July 7, 2010 6:55 p.m. EDT

— After several hours of fierce debate Wednesday afternoon, the House voted to ban video sweepstakes machines.

The Senate voted overwhelmingly last month to outlaw so-called sweepstakes cafes, which sell customers blocks of Internet time to allow them to gamble online or on cell phones.

The House, which narrowly defeated an attempt earlier Wednesday to send the bill to committee, voted 86-27 in favor of the ban, which would take effect Dec. 1.

The measure now goes to Gov. Beverly Perdue, who is expected to sign it into law.

Entertainment Group of North Carolina, an association of vendors of coin-operated and sweepstakes machines, issued a statement Wednesday evening saying that members planned to look at a possible legal challenge to the ban and other ways to get around it.

"We are certainly disappointed with the vote in the state House," the statement said. "We continue to believe that regulating and taxing video gaming is the best public policy for the state of North Carolina. We will look at all options available to us, including our legal avenues and the advances of technology as we follow the implementation of this law, allowing the industry to continue to do business."

Sweepstakes businesses have sprouted rapidly in strip shopping centers statewide in recent months after court decisions questioned whether the state's 2006 video poker ban applied to the computer-based games.

Operators contended a ban would eliminate thousands of jobs during the bad economy by getting rid of a game that's only a form of entertainment, not gambling. Opponents argued, however, that the games are designed to get around the video poker ban.

"It's highly exploitative, and we really think it needs to be banned," said Rep. Ray Rapp, D-Madison.

Gaming business owner and industry spokesman Chase Brooks said state regulation of sweepstakes cafes, not another ban, would better serve the state by providing millions of dollars in tax revenue and ending the constant cat-and-mouse game between operators and law enforcement.

"Without regulation, banning it creates an endless cycle of things that will happen," Brooks said. "Manufacturers adjust. They follow the law. They are still going to obey the letter of the law, but there are ways they can look at it. They can produce a new machine for the folks' entertainment."

A study by the North Carolina Education Lottery said regulating the sweepstakes cafes could net the state more than $500 million a year.

Rapp and other opponents said, however, that it was time for lawmakers to stand behind the video poker ban.

"I'm tired of play Whack-a-Mole with this industry," Rapp said. "The North Carolina General Assembly historically has spoken and said its illegal."