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Issue Date: Vol. 52, No. 3, March 2012, Posted On: 2/29/2012

Legal Struggles Continue In 9 States Over Video Pokers, VLTs, Sweeps Games

Marcus Webb
video sweepstakes game, sweepstake gaming, video game, video poker, video lottery terminal, VLT business, on-premise gambling, Ohio Coin Machine Association, Rep. Curt Schroder, gaming operation, coin machine business

The nationwide battle remains in full force between private businesses and state governments; both want the right to operate, control or receive the bulk of profits from risk-reward gaming machines that offer cash awards. Here's the latest update:

The town of Gurnee, near Chicago, became the latest jurisdiction to opt out of the state's forthcoming operator-run video lottery market. The five-person board of trustees voted unanimously on Feb. 20 to ban VLTs from bars and other locations. Local press outlets said 77 communities and four counties statewide had already opted out, taking advantage of a clause in the 2009 Video Gaming Act, which established regulations for the VLT sector. Chicago, the state's largest potential VLT market, has still not decided the issue.

The Ohio House voted 69-24 to pass HB 386, a bill that would permit casino gambling and video lottery terminals -- but not for amusement operators. VLTs would be confined to a few racetracks. The Ohio Coin Machine Association has been lobbying hard since late 2011 to convince legislators to include amusement operators in any gambling expansion bill, but so far without success. | SEE STORY

South Carolina
A Senate Judiciary subcommittee on Feb. 22 passed a measure that would explicitly outlaw sweepstakes videogames, which are popping up statewide. The full Judiciary Committee now has an opportunity to consider the bill. Gov. Nikki Haley opposes sweepstakes videogames and other forms of legalized gambling in the Palmetto State. As reported by Vending Times, South Carolina has recently seen legal warfare erupt statewide over the status of sweeps games. | SEE STORY

North Carolina. The state Court of Appeals on Feb. 22 upheld, by a vote of two to one, the right of local jurisdictions to impose special taxes on sweepstakes videogames. Local operators in Lumberton had sued the city after it imposed a $5,000 operating fee per location and a $2,500 per-terminal licensing cost.

The Legislature is facing a proposal for limited VLT legalization, but only the state lottery would be allowed to operate them. State Rep. Ron Stephens (R-Savannah) has offered a measure to allow the state lottery to operate VLTs in areas with high tourist traffic. Stephens cited a state lottery study that estimated the move could raise $1 billion to support Georgia's underfunded HOPE scholarship program.

Waynesville city leaders said they plan to join jurisdictions such as Maggie Valley, Canton and Franklin that charge up to $32,000 per location annually for Internet sweepstakes café licenses. Video gambling was banned statewide in 2007 and sweepstakes games were banned in 2010, but operators have challenged the latter with multiple lawsuits.

Rep. Curt Schroder (R-Chester County) has introduced HB 1893 to ban sweepstakes videogames in the House Committee on Gambling, which he chairs. Schroder told local press outlets that only 13 sweeps cafés are currently operating in the Keystone State but could proliferate if lawmakers fail to act. As earlier reported by VT, in 2009 Schroder asked the FBI, U.S. Attorney General Eric Holder and assorted Pennsylvania law enforcement and tax agencies to investigate the amusement industry. Two years later, the result was a massive bust of organized crime figures who were charged for operating a number of the state's estimated 17,000 illegal video pokers. | SEE STORY

State prosecutors rested their case in the second trial against electronic bingo operators and associates in late February. Meanwhile in the city of Oxford, a sweepstakes videogame parlor was preparing to open in early March, even while city officials said they planned to shut it down.

South Dakota
Senate Bill 167, which would raise the state's VLT bet limit from $2 to $5, lost a vote in the state Senate on Feb. 6. On Feb. 22, the $5 limit proposal lost a second vote in the House. Unfortunately for VLT supporters, when the House version of the $5 bet limit went down, it took with it a bill -- already passed by the Senate -- that would allow operators to expand the number of VLTs from 10 machines per location to 14. | SEE STORY

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