Video sweepstakes finds victory in Macon County case

Still illegal in Haywood County
By DeeAnna Haney | Apr 23, 2013

Some video sweepstakes games are up and running again in Macon County following a court case last week, but they’re still illegal in Haywood — for now.

District Court Judge Donna Forga found sweepstakes store owner Mark Berry not guilty of four misdemeanor charges of operating illegal sweepstakes machines.

But a local store manager that has been cited for running the same type of game will still be heading to court for her own verdict.

Tami Nicholson, manager of the Winner’s Circle in Waynesville, was cited for operating an illegal sweepstakes machine in February after installing $20,000 worth of new machines that she believed to be legal.

In a February article, she said the software she chose requires the player to use “skill or dexterity” in order to play, which she says is legal as interpreted in the law.

It’s been a roller coaster ride of events when it comes to sweepstakes games in North Carolina.

Numerous laws have been passed by the General Assembly to ban most forms of video gaming, but a Court of Appeals ruling in March 2012 determined the law violated free speech, making it legal once again.

A recent court ruling upheld the state law that made video sweepstakes illegal again in December, but many sweepstakes distributors have come out with new software that they claim is in compliance.

According to the statute, it is now illegal to operate sweepstakes through the use of an entertainment 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."

Berry had opened up his store using the game and kiosk provided by Georgia-based company, Gift Surplus, LLC.

During the court case, Berry’s lawyer, George Hyler, brought in expert witness Nick Farley, who works for Eclipse Compliance Testing of Ohio. According to a news release issued by Hyler, this is one of the only three labs in the U.S. that certifies such games for regulatory compliance. Farley testified that the game in question cannot be manipulated to increase or decrease the chance of winning by the player or store owner and that it requires skill in order to be played.

In the end, Berry was found not guilty and the charges were dropped, giving him the freedom to re-open his store.

Hyler is also representing Nicholson and another store owner in Jackson County, but says each case is being heard in their respective counties. He said the district court decision in Macon County will not necessarily be the same in Nicholson’s case in Haywood County.

“When you have a district court judge in a district make a finding, that’s not binding on every other district court judge. Each particular case would have to be viewed by a different judge on its merits and determined by its particular set of facts,” Hyler said Tuesday.

Nicholson has continually stood by the fact that her games are legal under the same section of the statute that require skill, but whether she will be able to open again is in the hands of the court.

Pending legislation with House Bill 547, which was introduced in early April, could legalize and tax video sweepstakes games if signed into law. But until further legislative action, Berry's case could make an impact on the sweepstakes industry across the state.

"The case represents a significant development in the evolving landscape of sweepstakes gaming laws in North Carolina," Hyler said in a press release.

"At the end of the day, we were able to show the judge that the game used to reveal winning sweepstakes entries on this kiosk was designed to fit within the exception that was carved out by the legislature..." Hyler said.


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