..HB-547 Would Regulate and Tax Lucrative Sweepstakes Industry in North Carolina..
Rockingham County, N.C. – On the Rockingham County line there’s something that you don’t always see in North Carolina anymore: Internet sweepstakes cafes.
It’s hard to find a parking spot at Village Business Center on N.C. 87. Customers come from miles around to try their luck at online games that could pay a little, a lot, or nothing at all. The sweepstakes centers front door is a 2-mile drive from the Alamance County line.
A state law was thought to have put all Internet sweepstakes businesses out of business when the district attorneys were given the OK by N.C. Attorney General Roy Cooper to enforce it in early 2013. But the businesses are opening up again in various parts of the state where district attorneys and judges have found that new software called “pre reveal” apparently makes the games legal.
At Village Business Center, the machines run on a “pre-reveal” system. With the click of a mouse, players can see their winnings before they play, The argument that makes this game legal is that “it doesn’t violate the NC law the way it is written” says Casey Rooks, a spokesperson for Banbuster Games in Dallas, Texas.
Don Bullis, owner of Village Business Center, says he runs his business by the letter of the law. He previously ran the Village Marketplace Sweepstakes in Haw River before the law went into effect. Rockingham County officials checked Village Business Center out before it opened in August and gave him the go-ahead. Bullis paid for a privilege license and taxes on the machines.
Rockingham County District Attorney Phil Berger Jr. didn’t return calls this week seeking comment on his stance on the sweepstakes law and the legality of pre-reveal software.
Rockingham County Sheriff’s Office spokesman Kevin Southern said Berger’s office determined that pre-reveal software doesn’t violate the law, based on that determination the sheriff’s department is following that advice “What we’re told is, as long as it’s in compliance with pre-reveal, it doesn’t violate the law,” Southern said.
But sweepstakes businesses remain illegal here, Alamance County District Attorney Pat Nadolski said Friday.
“Alamance County law enforcement and the DA’s office are united on this front,” Nadolski said. “At the end of the day, I have a constitutional requirement to enforce the law as it’s written by the legislature. I don’t get to pick and choose.”
Nadolski wouldn’t comment on what other district attorneys are doing.
What makes pre-reveal different ?
Casey Rooks explains “simply, the sweepstakes prize is shown before the game result or what the state would call the entertainment display (slots, cards or keno)”
Nadolski has been approached by sweepstakes gaming software companies who want him to take a look at their software and several have asked for an opinion.
“We don’t give advisory opinions,” Nadolski said. “I’ll meet with and talk to anybody, but I’m not going to look at their software.”
The N.C. Attorney General’s office considers the law and N.C. Supreme Court ruling definitive on Internet sweepstakes as video gambling. The office continues to “defend their enforcement vigorously” and argue against sweepstakes businesses in civil court actions, said Noelle Talley, public information officer for the N.C. Department of Justice.
In interviews with other news outlets, Attorney General Cooper has consistently said sweepstakes are illegal, regardless of software changes. He described the process of eliminating the businesses as “whack-a-mole” to the Associated Press last year.
It’s up to County and City law enforcement to enforce the text of the law.
“Law enforcement agencies and District Attorneys set their own enforcement priorities within their jurisdictions and have powers, duties and prosecutorial discretion, and they are always welcome to consult with our office as needed,” Talley wrote in an email.
She pointed out that some districts have successfully prosecuted the businesses under the law.
But within the last six months, the businesses and the new pre-reveal games seem to be making a comeback and have several district court victories.
An Onslow County judge granted a sweepstakes business an injunction against that county’s sheriff’s office. The judge found that a software change required skill and dexterity to play the games and that the machines were a “lawful promotional device” for selling gift certificates. So far, these ‘banbuster games’ have found a way to be successful and more importantly compliant.
Village Business Center is open at 9am and closes when the last customer chooses to leave.
“We’re normally open 24 hours. Business is that good,” said Carissa Stanley, a manager there. “We have people come in from everywhere: Alamance County, Greensboro, Virginia.”
The customers at business center, many of whom are seniors, chit-chatted. Several lined up at the window for their free play $5 bonus, good on the first $20 with a swipe of their membership cards. A signed informed the patrons that Tuesday is Men’s Day, Thursday is Women’s Day.
“It’s generally an older clientele,” said Stanley. “They know they’re not going to win big. They come out to spend time with each other and socialize. It’s a place for them to come and see their friends.”
Bullis is weary of the controversy and opposition to Internet sweepstakes.
The majority of NC voters (along with Bullis) believe sweepstakes should be allowed, but fairly taxed and regulated. Before the sweepstakes law went in effect, cities and towns began charging thousands of dollars per computer and license fees. A state law that lost steam (HB-547) would have mandated thousands of dollars in charges before sweepstakes could open.
Bullis takes offense when people accuse him and other sweepstakes operators as preying on the poor or causing harm to communities.
“It’s absolutely not true,” he said. “I employ 10 people. I do all my business locally. When they shut us down in Haw River, it put 10 people on unemployment. … We put money back into the community. We’re never recognized for that.”
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