Category Archives: nc internet sweepstakes

Now the State Wants To Regulate the Sweepstakes Industry with HB-547


..HB-547 May Legalize the Sweepstakes Cafe Business in North Carolina..

Charlotte, NC – Upon reflection, 2013 may be remembered as the year when law enforcement began enforcing the state’s ban on internet sweepstakes game-rooms,55mpg but as for 2014, the games are back running strong in certain parts of the state, partly due to the function of the games and the legality of some games are unclear. The N.C. Supreme Court upheld the latest legislation taking aim at the gaming industry but Internet sweepstakes operators have been able to tweak their software to follow the letter of laws aimed at putting them out of business. The latest ‘tweak’ is a software called PreReveal Sweepstakes, where the customer doesn’t enter the sweepstakes in a manner that HB-80 descibes as illegal nor does the games  ‘reveal’ in a manner that the law describes as illegal. The court challenges and victories for the sweepstakes industry happen on a regular basis. Internet sweepstakes operators continue to fight the state in court, and their chances of reopening increase with every software change and appeal. Casey Rooks, a spokesperson for Carolina Sweepstakes Group says  “It’s pretty simple, laws have definitions and if the action does not fit the definition then there’s no violation, some call this ‘circumventing the law’ but we look at it like going 54mph in a 55mph zone, in this instance, the preReveal games were launched years before the sweepstakes ban law went into effect and they do not violate the text as it is written” If the Supreme Court’s 2012 ruling can keep Internet sweepstakes

Casey's Facebook Page

Casey’s Facebook Page

cafes closed once and for all, then the N.C. General Assembly succeeded where 20+ years of legislatures have failed but since the gaming industry has so many different types of video games, its hard to ‘outlaw’ them all. But if the internet sweepstakes industry finds enough loopholes and concessions to reopen cafes, then perhaps it’s time for North Carolina lawmakers to look for ways to tax and regulate the industry (SEE HB-547). HB-547 takes steps to finally get the NC gaming industry under control, Sponsors Wray, Collins, Floyd, Lucas, Malone, Richardson, Szoka have taken steps to in ending the confusion. NC547The North Carolina educational lottery and Internet sweepstakes seem to prey upon people who can least afford to gamble away their paychecks. But since its going to happen either way, NC should put some of that money to good use in schools and other areas of need.

Behind Several Court Wins, Sweepstakes Operators Quietly Changing Their Game


..Showing The Prize Before The Entertainment; The Pre Reveal Way..

CHARLOTTE, N.C. — Into the second year after the state Supreme Court upheld a North Carolina law banning sweepstakes cafes, some of the places where people play fast-moving computer games that mimic Vegas-style slots are still open for business after they changed the business model to another type of game.


Over the last year sweepstakes cafes have been shut down by police, and their owners and employees have been charged with violating the law. But some of those arrested have been acquitted of criminal charges.

A few of the operators have turned to the courts for help. They’ve asked judges to issue orders preventing law enforcement from closing their stores, saying they have new software called “preReveal”  that puts them in compliance with the statute.

The strategy has created an air of uncertainty in some communities that have been trying to close sweepstakes parlors because it makes the entertaining value of the game optional and thus not against the law.

While some cities and counties are trying to close the businesses, other communities are allowing them to stay open until key issues are resolved.

Attorney General Roy Cooper said it’s clear that sweepstakes cafes are illegal. He said his office is working closely with local law enforcement and prosecutors, providing legal advice and assistance to close the operations.

But he said sweepstakes owners have been pushing back.

pp“I think law enforcement and prosecutors are just going to have to keep plugging away at this,” Cooper told The Associated Press. “I think overall you’ve seen a reduction in the number of these businesses in North Carolina either who voluntarily go out of business or who have been shut down by law enforcement. I think it’s just going to take a period of time before its eradicated.” “You still may have them popping up like we did with the payday lending industry. They come up in different kinds of forms. It’s sort of like whack-a-mole. They come up with a different kind of nuance,” he said.

But he warned: The sweepstakes industry might change the games to comply with the law.

North Carolina lawmakers first passed a ban on video poker and all other electronic gambling in 2006. The industry quickly adapted, introducing new sweepstakes games they said complied with the law.

Lawmakers responded with new legislation in 2008 and 2010 making it unlawful to possess game terminals that simulate slot machines or are used for the display of electronic sweepstakes. The makers of sweepstakes software then sued the state, saying the ban violated their Constitutional free speech rights. The resulting court fight dragged on two years, culminating in the December 2012 Supreme Court decision upholding the ban.

After the ruling, law enforcement agencies began raiding cafes, seizing computers and making arrests.

But sweepstakes owners protested, asking lawmakers to look at new software that reveals the winners in advance, a move they say keeps them in compliance with the law.Pre-Reveal-Gold

With most sweepstakes operations, patrons buy Internet time that gives them the opportunity to uncover potential cash and prizes with mouse clicks on a computer screen.

To play at the cafes, customers get prepaid cards and then go to a computer to play “sweepstakes.” Winners go back to a cashier with their cards and cash out.

The pre-reveal system software allows participants to find out if they’ve won before they play the game.

That issue was a key part of a recent Duplin County case that involved a Charlotte-area attorney.

Gardner Payne was charged in October with six counts each of gambling, and the illegal use of electric machines and devices for sweepstakes.

He said he used the sweepstakes to promote his businesses, and that customers purchasing Internet time could find out in advance if they won.

The state law makes it illegal to conduct a sweepstakes through the use of an “entertaining display” to reveal a prize. But Gardner said the new pre-reveal software did not use an entertaining display to conduct the sweepstakes.

Prosecutors said buying Internet time was just a pretext.

But in late December, Judge Henry Stevens IV agreed with Payne, and dismissed the charges.

However, the judge’s ruling only applied to this case. So a year after the Supreme Court ruling, the issue is being played out in other counties — one case at a time.

Telephone messages left for Payne were not returned.

Sweepstakes owners also are going to court in their own communities to stop law enforcement from closing down their businesses.


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NOT GUILTY Verdict in North Carolina Pre Reveal Sweepstakes Case


..Not Guilty Verdict Brightens The Day for Sweepstakes Operators..

Duplin County, NC – In a Eastern Carolina district court hearing a case about new ‘Pre Reveal” sweepstakes the trial came back with a not guilty verdict.Pre-Reveal-Gold

According to District Attorney Ernie Lee, Gardner Payne was arrested September 5th and charged by the Duplin County Sheriff’s Office with six counts of gambling and six counts of video sweepstakes violations.

Payne was in charge of a Sweepstakes business on NC 41 in Wallace.

On Wednesday Judge Henry Stevens found Payne not guilty of all 12 counts.

Not Guilty Verdict In New Sweepstakes Case

A law enforcement official suggested that the state will continue to enforce the law and that many places that are still open are doing so by running ‘pre-reveal games’

Sweepstakes in North Carolina Get a Random Win


..Injunction Granted In North Carolina PreReveal Case..

ASHEVILLE — A video sweepstakes operator says a court order in eastern North Carolina will allow him to expand in North CarolinaPre-Reveal-Gold

A preliminary injunction was issued against the Onslow County by a Superior Court judge and ruled his preReveal sweepstakes machines are legal and prohibited the sheriff from seizing them or arresting those who were operating them.

PreReveal Sweepstakes machines are operated in over 40 counties in North Carolina.

“We’ve proclaimed that our games were good to go from the start” Casey Rooks says.

The ruling marks the first Superior Court win for sweepstakes operations since the December 2010 ban and the seventh sweepstakes-related win, including charges dismissed in District Court across the state.

Superior Court judges have jurisdiction statewide. The injunction is for the Onslow County sheriff though Rooks did suggest that many jurisdictions may use this as precedent until told otherwise. “We are following the text of the law and today it shows”Rooks says that this ruling will expand PreReveal into other markets “all around the state”


1-877-WIN-CAFE Players

1-877-WIN-CAFE Players

Buncombe County Sheriff’s Office spokeswoman Natalie Bailey said officers would continue to investigate gambling machines when they receive complaints.

Rooks said “Apparently the judge ruled the machines are legal sweepstakes because they are depended on skill and dexterity.” The judge also ruled the promotional and management practices fit with how other sweepstakes (preReveal) are administered, he said.

The argument has been consistent throughout the state, where the games a dependent on skill and dexterity. “We’ve said from the begining that our PreReveal games would stand up to the letter of the law”

Dozens of NC Lawsuits Filed Against Municipalities For High Sweepstakes License Fees


..In other similar court cases, the cities and towns were forced to refund business license fees..

MAGGIE VALLEY – The town joins the queue of communities in North Carolina facing threats of lawsuits for collecting over-priced business permits for sweepstakes.

Pre-Reveal-GoldThough non-prereveal video gambling was already outlawed in NC earlier this year, business owners were demanding to get their money back after paying thousands of dollars for license fees.

The town consulted with North Carolina’s League of Municipalities whether to refund the license fees amounting to more than $18,000 or fight the battle in court.

According to the Pinters who manned Vegas in the Valley, Torry Pinter and Jo Pinter, they were on their third month of operation when the law shut them down. Pinters said that aside from the dollars spent in establishing the business, they paid the town $18,250 for licensing fee.

The Pinters claimed they did not get a return of investment from the business.

“I’m still in the hole, way in the hole,” declared Torry Pinter.

In a letter sent to Maggie Valley on behalf of the Pinters, Attorney Steve Agan of the Hyler and Lopez stated that people were coming out of the woodwork to get them to try to help them with everything related to sweepstakes machines.

City of Maggie Valley May Refund Sweepstakes License Fees or Fight it in Court

The same letter was sent to Franklin with a threat of a lawsuit if the town does not reimburse Mark Berry of Dowdle Mountain Pit Stop the $13,000 license fee.

Meanwhile, to avoid the cost of lawsuits, the town of Highlands who also received the same memo from Hyler and Lopez and decided to pay back $13,000 to Highlands Wine Cellar.

Town Manager Marcy Onieal of Waynesville pointed out that towns do not refund license fees to business owners who went out of business.

Similar lawsuits across North Carolina have resulted in the cities refunding all or partial license fees.

Some NC Parlors Conform To New Law, Some Do Not


..Latest Bust Show the Benefits of Compliant Games..

Havelock, NC – A truck loaded full of illegal internet gaming equipment from Havelock area businesses after a day full of sweepstakes bust.

A total of 7 businesses were raided on Thursday, all along East or West Main Street and U.S. 70.

Havelock police worked with members of the Craven County Sheriff’s office to serve search warrants on seven businesses known operating the illegal gambling devices.

Havelock Police Bust Game Players

Police say the following businesses were found to be in possession of gaming equipment or relevant evidence:

- Food Fare at 227 West Main St.

- Mr. P’s Sweepstakes at 900 U.S. 70 West

- Internet Connections at 1329 East Main St.

- B&B Internet Access at 925 East Main St.

- Jean’s Place at 220 East Main St.

- Super Expressway at 807 East Main St.

- Ben’s Beach Bingo at 1333 East Main St.

- U.S. Mini Mart at 221 East Main St.

Police seized hundreds of pieces of evidence during the raids, arrest are pending review from the District Attorney’s Office.

Sweepstakes Games With Pre-Reveal Spread Into Western NC


Pre-Reveal and Skill Games Intergrat The Gaming Industry In NC

WAYNESVILLEInternet sweepstakes with yet another win, 4-0, as the court dismissed another case on Monday.
Tami Nicholson of Winner’s Circle Sweepstakes Parlor was the fourth defendant found not guilty, this week. Nicholson who declines to comment looks very glad with the outcome of the proceedings.Pre-Reveal-Gold
According to Attorney George Hyler, Nicholson’s legal adviser, the court is consistently siding with his arguments that the new breed of sweepstakes machines which involves skills and dexterity are legal.
Those games are found to be legal, says Hyler.
After the case was dropped, Nicolson is likely to be one of those operators who would re-open another sweepstakes business.
In fact, pre-reveal sweepstakes businesses are already in a boom across the region with its remodelled version of machines. Various sweepstakes machines are spread out in gas stations across Sylva, Waynesville, Macon, Swain, Jackson and Haywood.
However, District Attorney Mike Bonfoey states the dismissal of those charges does not guarantee that the remodelled machines are legitimate.
Bonfoey says, it always a case-to-case basis and it is not precedent.
Meanwhile, law enforcement says remodelling sweepstakes machines are just gimmicks to circumvent the law passed by the Supreme Court in January to ban sweepstakes.
Though prosecutors have dismissed four sweepstakes charges in a row, DA still urges authorities to enforce the law. “The issue seems to be that the games do not violate the text of the law. A law has definitions and games seem not to violate those definitions.”
Waynesville Chief Bill Hollingsed says the statute is valid until then and they will continue to enforce it until they are told by courts to stop.
Hollingsed adds that the DA has the final say judgement on the issue.

Legal Skill Game And Pre-Reveal Open A New Chapter In North Carolina Gaming Saga


NORTH CAROLINA – Despite a misconception of a statewide ban on video sweepstakes machines, the video gambling industry introduced new games that do not violate the law to get the machines back into Western North Carolina, apparently emboldened after the 3rd straight district court judge have dismissed a series of criminal charges against sweepstakes operators.Pre-Reveal-Gold

It’s been less than a year since the N.C. Supreme Court shut down the sweepstakes-style machines, declaring them illegal under the state’s standing ban on electronic gambling machines that use ‘entertainment displays’ to enter a sweepstakes or show results of entries.

Some businesses decided not to shut down their operations however, so police brought criminal charges against more than half a dozen establishments in the region, including some in Maggie Valley, Waynesville, Canton, Sylva and Franklin.

Some of those charges have been tossed out as they have come before local district court judges, however. Namely, cases in Waynesville, Sylva and Franklin heard by Judges Donna Forga and Monica Leslie have either been dismissed or ruled not guilty.

The latest to be fond not-guilty was Angela Davis Nicholson, a 43-year-old employee at Winner’s Circle on South Main Street in Waynesville. Nicholson, as with others who were found not-guilty,  contended that the newest version of sweepstakes games require skill and dexterity, and yet also offer a pre-reveal option and therefore the state’s ban on “games of chance” doesn’t apply.

“The whole issue of these cases revolves around whether they have a skill or dexterity component,” said George Hyler, the Asheville attorney who represented Nicholson.

Prosecutors were unable to definitively prove otherwise.

“The judge thought that the evidence was insufficient to go on. She dismissed the case,” said District Attorney Mike Bonfoey.

Hyler made the same successful argument to get sweepstakes operators off in Franklin and Sylva, with the sweepstakes manufacturers bankrolling his attorney fees.

Now, the ongoing battle between state legislators and the video gambling industry appears headed for another chapter.

However, unless there’s an official decree from the state or a higher court deeming the games legal, the Waynesville police department will continue to cite violators even if it cost tax payers money on unsuccessful court cases.

“I really think we are going to push back,” said Waynesville Mayor Gavin Brown. “We have taken the position that these are not legal.”

Brown, along with leaders from other towns, were surprised to hear that the sweepstakes machines were creeping back into the area, however.

Canton Town Manager Al Matthews broke the news during a quarterly Council of Governments meeting Monday night, sharing a couple of recent sighting of the new-style pre-reveal sweepstakes machines being rolled into gas stations.

“They are trying to run what they argue is a legitimate game,” Hyler said. “So far, they have been proven right on three different occasions.” The legal skill game seems to be gaining in popularity.

Hyler added that Winner’s Circle owner Tami Nicholson placed stickers on her machines to denote that players must use skill or dexterity to win.

Charging High Fees On Sweepstakes Cafes Comes Back To Bite NC Municipalities


North Carolina – A budding number of cities are facing lawsuits after the North Carolina Supreme Court ruled that the business licensing tax charged by Lumberton on sweepstakes operators was 59,900% higher than what the constitution requires.

Excessive Fees Scrutinized In North Carolina

Among these cities are Macon County, Hickory, Newton, Syla, Haw River, Highlands and Lenoir. Most cities are expected to pay the fees back with interest on what was considered the excessive amount, that amount is predicted to cost individual municipalities hundreds of thousands of dollars.

Reports say that Lumberton has taxed sweepstakes owners $135,000 per machine, a very high price compared to what the law requires which is $12.50 per machine annually. Likewise in Lenoir, the tax imposed has doubled from $500 to $1,000 per machine.
Clark Consulting Group which operated Highway 18 Sweepstakes in Lenoir filed a lawsuit against the city and demands $22,000 paid for franchise fee, legal fee and tax. It also has a pending case against Newton, Conover, and Hickory.
To keep their sweepstakes operation going, business owners pay steeply. Back in 2012, Granite Falls suggested to increase their tax by 500%.
According to Director Jeanette K. Doran of the North Carolina Institute of Constitutional Law, a careful balance must be struck between the right of the people to be free of abuse from taxing power and the power of the government to impose tax for legitimate reasons.
Doran added that there is no set amount necessarily unconstitutional and unreasonable. She mentioned that the emphasis is on fair play and equality, citing that what constitutes an unconditional tax may vary based on the circumstances of the tax required. Furthermore, she explained that what constitutes a constitutional tax will inevitably bear the hallmarks of fairness and freedom.
In addition, Mitch Kokai of John Locke Foundation declared that increasing tax can be justified if it pays for additional services. He also emphasized that the tipping point for deciding what is just or lavish is a gray area.
As per Kokai, cities should be allowed to charge a higher fee for business operations that generate a higher cost to the city like for example if a certain business requires more public service like fire protection and police sweep. Kokai said a business fee scale that incorporates more taxpayer costs makes sense.

Internet Cafe Not Using New Pre Reveal Shut Down

TARBORO – The District Court convicted the proprietor of Past Times Internet Café together with two of his staff for engaging in illegal electronic sweepstakes last Wednesday.
Judge William Farris of the District Court sentenced Richard Conoley Chapman, 66, business owner, Kwana Spruill, 37, manager, and Gwenette Mills, 35, staff, to 30 days suspended jail time  and fined them $200 for court costs.Pre-Reveal-Gold
The trio have been arrested and charged after a search warrant was conducted by Tarboro Police Department on April 15.
According to police reports, Chapman has already been warned several times to shut down. Back in December, when North Carolina Supreme Court ordered a ban on internet sweepstakes cafes that use entertainment displays, Past Times Internet Café has already shut down. However, it has reopened which forced authorities to serve a search warrant.
The Judge also ordered authorities to return all items seized which includes cash, a cash register, hard drives, computer screens and chalk board with recent winning amounts. The winner’s board indicated that the top prize amounting to $1,971 had been won 10 days earlier.
After the verdict, the defendants’ lawyer filed for an appeal which means that they will have a jury trial in the Supreme Court.
According to Chief of Police Damon Williams, the business operators did not take them seriously when they entered the building. The patrons playing sweepstakes games cooperated and immediately left the premise.
Chief Williams said they will not tolerate anyone to publicly violate the general statutes. After the ruling last December, business owners with large scale operations filed lawsuits to keep their business running when software companies attempted to reprogram the software to comply with the law by displaying pre-reveal winners. Past Times internet cafe was not using the pre-reveal software.
The Chief mentioned during that time that he would abide by the laws and close those establishments inside city limits.
During the trial to keep the business open, some internet café went back to operation. Williams said that it was up to the discretion of authorities in each county on how they wanted to handle it.
Reports say that there are eight internet cafes operating in Edgecombe County at the time the ruling was passed, yet, only Past Times Internet Café was served a search warrant. Reports also indicate that at least half of the existing cafes were running the believed to be compliant pre-reveal software.