Saga continues in sweepstakes games

By DeeAnna Haney | Feb 05, 2013

The ongoing saga on video sweepstakes in North Carolina has often been described as a ‘whac-a-mole’ game, because as soon as one legal loophole is closed the industry quickly finds another.

The issue continued this week as store owners and law enforcement struggled to get a grasp on what is legal and what’s not after the most recent court ruling in Davidson County.

Officers in Haywood County began enforcing a N.C. Supreme Court decision in December to uphold a ban on sweepstakes parlors. In response, store owners across the county pulled the plug on their machines in early January.

But over the weekend, some of those stores were back up and running after obtaining new software they thought complied with the law.

In the most recent turn of events, sweepstakes software distributor International Internet Technologies, sued Gov. Pat McCrory and other state officials claiming its software had been updated and now complied with state law.

On Friday, a Davidson County judge issued a restraining order preventing police from seizing sweepstakes software provided by IIT pending a court hearing on the issue.

The lawsuit occurred after Davidson County deputies charged a business with possession of sweepstakes machines although the business had IIT software.

During a court hearing Monday, though, the Lexington Dispatch reported that another judge allowed a motion to dismiss the lawsuit, therefore allowing authorities to once again enforce the ban.

According to the statute, it is illegal to operate an “electronic machine or device” to “conduct a sweepstakes through the use of an entertaining display.”

That includes video poker, bingo or "any other video game not dependent on skill or dexterity that is played while revealing a prize as the result of an entry into a sweepstakes."

Previous games made by IIT were revealed to customers through a game display. But new “pre-reveal” games supposedly skirt the law.

Waynesville Police Chief Bill Hollingsed said the new software could skirt the law because the screen doesn’t reveal the prize to the player.

“He or she plays the game as usual, but at the end of the game, the screen goes blank. The player then has to go to the clerk where it is revealed to the clerk, not to the player, whether or not they won and how much their winnings were,” said Hollingsed.

Other companies are coming out with their own version of the pre-reveal software, such as the one IIT brought into question.

Tami Nicholson, who manages two sweepstakes establishments in Haywood County and one in Cherokee, was forced to close her doors following the ban. But, she said she is planning to roll out new machines this week that she believes are legal.

"Yes, we have new software that is legal and compliant under the Supreme Court's ruling," she said. "It has the features in place needed to make it legal. How law enforcement will handle it, they are not willing to tell us. Our attorneys have deemed our software legal. If that’s the case we should not be bothered by law enforcement."

What’s legal and what’s not?

Now that the lawsuit has been dismissed, law enforcement agencies are free to continue enforcing the ban, which it turns out, expired only for a weekend.

Canton Police Chief Bryan Whitner said a handful of stores carrying the machines turned them back on over the weekend, but he currently does not know exactly which ones. He said he will be sending officers out to inspect those machines this week.

In Maggie Valley, all three of the original sweepstakes locations remained closed since authorities began enforcing the ban last month.

“We shut them all down, and we have none right now,” said Maggie Valley Police Chief Scott Sutton. “They called and touched based with us and asked questions but all my business owners have been really good about it. I’ve been fortunate that everybody’s been so cooperative.”

In Waynesville, the 777 on South Main Street was up and running over the weekend. Hollingsed said because of the most recent court action, his department will enforce the ban as before, but he knows the issue is not over yet.

"And the Whack-A-Mole continues," said Hollingsed.