Lottery warns retailers about gaming

The North Carolina Education Lottery has sent warning letters to retailers who operate video gaming devices.

Lottery director Tom Shaheen said that any retailer convicted of a felony or gambling offense would have his or her license to sell lottery tickets revoked.

The letters were issued as municipalities crack down on so-called "sweepstakes cafés."

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.

House Speaker Joe Hackney said lawmakers will likely move to outlaw sweepstakes cafés when the 2010 session of the General Assembly opens in May. He said the businesses are trying to get around the state's 4-year-old video poker ban.

The gaming industry argues that there's a clear distinction between sweepstakes cafés and video poker parlors.

Cities have begun adopting zoning rules to control the proliferation of sweepstakes cafés.

Rocky Mount City Council on Monday approved zoning regulations for the businesses and instructed planning officials to look into enacting even tighter controls in the coming months.

The restrictions, which passed by a unanimous vote, bar new sweepstakes cafés from opening within 500 feet of schools, churches, residential neighborhoods or other gaming parlors. They don't limit hours of operation or set a minimum age limit for customers.

Many of the cafés are open 24 hours, and a few allow children as young as 14 to enter.

Wilson also has enacted restrictions on sweepstakes cafés, and Wilmington and New Hanover County are looking to follow suit.