A ruling Nov. 18 by the N.C. Court of Appeals, which upheld a state statute banning video sweepstakes businesses, also introduced games that used skill and dexterity may not violate state statue.
PreReveal Skill Games
Gibsonville informs sweepstakes operators their games lack skill and therefore illegal.
SALISBURY – New Pre-Reveal Skill Games have law enforcement shaking their head because they look exactly like the old ‘now banned sweepstakes games” with one catch, they’re not. Salisbury police are starting to enforce the use of sweepstakes machines but would not comment on if the new ‘pre-reveal skill games’ were legal or not. In a letter, the department gave businesses until the end of the year to cease operations or face possible prosecution.
Capt. Melonie Thompson with the Salisbury Police Department looks through a folder devoted to the sweepstakes investigation. She said undercover officers went into multiple internet cafes and what they found is against the law.
“It’s a game of chance. You’re pushing a button, you hope that you’re winning, and that’s what makes it illegal,” said Thompson.
The North Carolina Court of Appeals upheld North Carolina General Statute 14-304.6 in 2012. That statute “bans the operation of electronic machines that conduct sweepstakes through the use of an ‘entertaining display.’” Rocky goes on to explain “the legality comes down to several factors, one, does the player enter the sweepstakes by use of entertaining display ? and two, is the prize shown by use of the entertaining display ? If so, then its illegal.”
“There’s not any specific thing that the letter states other than this broad spectrum of the statute has from 2010,” said Pruitt. “It’s devastating because you’re now looking at here at the holidays. Not only will I be out of work and not have a business but my staff.”
Ironically, counties across the state are catching up to the North Carolina Supreme Court’s decision to uphold the statute regarding sweepstakes that use entertaining displays but with the introduction of the new skill games it makes enforcement blurry and unclear. “If it’s gonna be on the books it should be spread across the entire state not pick and choose,” said Pruitt.
Entertainment Display Defined By State
According to the letter from police, businesses in violation of the statute will be charged with breaking the law on or after Jan. 1. The statute reads that it’s “illegal” to operate any computer game of chance associated with a price of “value.” That uses a “entertainment display”
“I just feel like right now Salisbury has enough crime and enough problems,” said Pruitt.
Pre-Reveal Skill Games Seem To Get Nod In Appeals Court Decision ?
RALEIGH, NC - An appeals court in North Carolina upheld the convictions of two people for violating a state ban on video sweepstakes games (NON-PRE-REVEAL SKILL) in what state Attorney General Roy Cooper’s office said was the first such ruling in a criminal case.
The three-judge panel of the state Court of Appeals gave a unanimous decision which means the Edgecombe County case can’t be automatically appealed to the state Supreme Court, although the higher state court can choose to review the case.
Up and Down
The decision comes after 8+ years of back-and-forth between lawmakers, the video sweepstakes industry and the courts.
State lawmakers first passed a ban on video poker in 2006. The industry quickly adapted, introducing new sweepstakes games that operators said complied with the law. State lawmakers banned Internet-based sweepstakes games with entertaining displays in 2010 at that time the industry had already adapted to the “Pre-Reveal” Games and thus have won multiple court cases across the state.
With most sweepstakes operations, patrons buy prepaid cards giving them Internet time/ phone time/ or other products and the opportunity to uncover potential cash and prizes with mouse clicks on a computer screen. Winners take their cards to a cashier and cash out. No different than buying french fries at McDonald’s and peeling the tab to reveal your prize.
In the past two years, police in many municipalities have shut down sweepstakes cafes and arrested owners and employees. Some of those arrested have been acquitted of criminal charges because the Pre-Reveal games have been found not to violate the text of the law.
Some lower court judges have disagreed about the law and its application, leading to uneven law enforcement and the likelihood that appeals courts will again have to weigh in.
Skill and Dexterity
The Court of Appeals ruled that the convictions of sweepstakes cafe owner Richard Conoley and store manager Chapman Kawana Spruill should stick because the “video games offered at their location revealed a prize that didn’t depend on any skill or dexterity”, Judge Wanda Bryant wrote for the court and therefore violated the text of the law. Both were sentenced to 45-day jail terms, with Chapman’s sentence changed to three years of probation and Spruill given a year of probation.
Nayer played once a week for six months, dropping up to $10 a visit, before hitting what he thought was a $4,800 jackpot on a progressive Keno game. However, before he could collect his prize, the gaming cafe in a Santa Rosa storefront packed up all its computers and moved out.
“It would have been a hell of a lot better if they paid me all my money. I’m finding out they are a real scam,” said Nayer.
Back in December, the California Bureau of Gambling Control issued a memorandum claiming sweepstakes games as illegal under state laws.
In order to wipe out internet café operation across the state, California Assemblyman Rudy Salas, D-Bakersfield authored the Assembly Bill 1439.
According to Salas, the cafes violate anti-gambling laws while victimizing people and causing other types of crime.
“These Internet sweepstakes are thinly veiled gambling operations that establish themselves in an economically depressed area, accrue hundreds of thousands of dollars through online gambling and close when apprehended by law enforcement. Often, these illegal gambling cafés will then re-open in a new location, threatening to negatively impact another neighborhood in the community. Recently, there has been a growing proliferation of these gaming operations throughout the state,” AB 1439 stated.