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Issue Date: Vol. 51, No. 1, January 2011, Posted On: 12/23/2010

NC Governor Mulls Sweeps Games Legalization; Many Sweeps Cafes Stay Open

Marcus Webb
Sweepstakes video game, North Carolina sweepstakes ban, Governor Bev Perdue, Attorney General Roy Cooper, Chris Heagarty, Chase Brooks, video game, gambling machine, online sweepstakes game, Hest Technologies, Internet International Technologies, online gambling

RALEIGH, NC -- Gov. Bev Perdue told reporters that to resolve North Carolina's 2011 budgets deficit, expected to be $3.1 billion, she may support legalization of Internet sweepstakes videogames. But she also seemed to indicate that she is leaning against legalization for now.

The governor's rambling and self-contradictory remarks came during an informal press conference on Dec. 16. Taken as a whole her statements failed to provide much, if any, additional clarity to an already-confused legal environment for the controversial games.

Calling sweepstakes videogames "a snake we haven't beheaded yet," Perdue said she finds the current lack of regulation of this thriving market "personally offensive," adding: "If you're going to have it, it has to be controlled."

Perdue added that she is not philosophically opposed to gambling, recalling that as lieutenant governor she cast the tie-breaking vote some years ago to authorize a state lottery.

However, that remark -- equating sweeps games to the lottery, which is a form of gambling -- seemed to miss the point that district courts in North Carolina have ruled repeatedly that sweepstakes promotions are not gambling under state law.

Despite saying that she is considering sweepstakes videogame legalization, the governor also seemed to admit that she is leaning against that position at this time. Specifically, she said, "I am looking for honest revenue that may be controversial. Anything that is an option is on my plate. But do I think I am going to go there? I don't have a clue. I don't think so."

A new state law intended to shut down Internet-based sweepstakes videogames took effect on Dec. 1, but in November a superior court ruling held that the machines are legal if they depict amusement videogame entertainment rather than casino-style games as a means of revealing the outcome of a sweepstakes promotion.

State Attorney General Roy Cooper has appealed that ruling. At the same time, an official in Cooper's office issued guidance to local law enforcement that seemed to suggest that police could seize games with casino-stye "outcome reveals" but not those machines with amusement videogame-style presentations.

Consequently, a number of sweepstakes game manufacturers that supply the North Carolina market have simply modified their equipment to use amusement-style "reveals" and many Internet cafes around the state continue to operate. In one county, for example, local newspapers report that "most" sweeps parlors remained open in mid-December.

Rep. Chris Heagarty (D-Wake) said he expects state lawmakers to pass yet another law in 2011 aimed at shutting down all sweepstakes videogames for good.

Chase Brooks, a spokesman for the North Carolina Internet Sweepstakes Organization, said the industry would be able to keep modifying the technology of sweeps games to remain in compliance no matter what laws may be adopted.

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