Internet cafés and coffeehouses offering online sweepstakes games with big cash prizes are growing fast in these two southern states. Some individual venues host up to 48 terminals each and pay as much as $5,000 to winners, according to local press reports.
In North Carolina, the Legislature passed a ban one year ago that targeted "server-based electronic game promotions" that simulate slot play. But operators say their sweepstakes games -- despite being linked to slot, keno, or poker simulations -- don't award prizes based on server-based prize pools associated with such casino-style game programs. Instead, prizes are paid to winners based on predetermined sweepstakes systems like those used in many promotional campaigns by companies such as McDonald's Corp.
Sweepstakes businesses typically sell prepaid Internet access cards, although legally no purchase is necessary to enter; buyers are then given access to onsite computer terminals that have the slot-simulation software.
Operators are careful to ensure that winners of the (technically unrelated) sweepstakes can collect cash at the counter, not at the machine itself, which is prohibited by law. In December 2008 and June 2009, two different state court judges ruled that such sweepstakes games are legitimate under current statutes, and an appeal is pending.
As a result of these rulings, combined with sympathetic opinions rendered by leading law professors in the state, law enforcement and city officials across North Carolina have been unable or unwilling to shut down sweepstakes games. Certain municipalities, such as the city of Graham, have hiked license fees to $1,000 per establishment in an effort to discourage sweepstakes gaming, which one city councilmember denounced as "nothing but a loophole for legalized gambling."
Machine makers, like Titan Touch Systems out of Atlanta, are rushing to supply the burgeoning sweepstakes market. The Titan Touch System (see story below) features a 15" touchscreen in a single integrated unit, so that no bill acceptors or separate printers are needed. The sleek, flatscreen terminal issues "rechargeable" PINs from sister company Titan Time. Titan said the system is universally compatible with all existing PIN generator platforms on the market. The customer purchases phone time and redeems awards (if any) at the counter.
In Florida, nearly identical laws have led to the operation of Internet cafes statewide with nearly identical sweepstakes games and cash prizes for winners. But issues surrounding sweepstakes games in the Sunshine State are more contentious, and have led to numerous police raids and lawsuits.
One high-profile example concerns a nonprofit group called Allied Veterans of the World, which operates 25 Internet cafés statewide as fundraising sources for veterans. After police raided AVW's sites in four counties, a state judge ruled that the cafés must be shut down until the operator has sued each county separately. AVW sued over the ruling in a Circuit Court in the state capital, arguing that it was impractical to file separate lawsuits in 67 counties. But the Circuit Court rejected AVW's claims last week, saying it was not the proper venue. AVW's attorney said the group plans to appeal.
In another Florida case, an appeal has been filed in the Fifth District Court (Daytona Beach) by Cyber Zone E Cafés (Ocala). The owner said officials improperly shut down his operations, charging criminal gambling violations when in fact his games are in full compliance with state laws on sweepstakes.
Titan Phone Card System Interfaces With NC Sweepstakes Terminals
Titan Touch Systems (Atlanta) has introduced a state-of-the-art phone card system for the North Carolina sweepstakes market. Officials say the system is the only one of its kind to meet with favorable legal opinion in North Carolina.
An all-in-one computer with 15” touchscreen, which replaces bulky peripheral equipment, eliminates a central bill acceptor and the need for printers in each sweepstakes terminal. The new system can also incorporate a wireless solution based on customer preference.
Along with easy-to-recharge “phone time” PINs from sTTS's sister company, Titan Time, the menu-driven, user-friendly system offers detailed accounting reports and security, the company said.
Additionally, Titan Time phone time can be purchased and is universally compatible with all existing PIN generator platforms on the market.
Titan said it designed the sweepstake terminal to ameliorate existing issues with competitive products. It's hoping to set the new standard in the phone-time, sweepstakes arena in North Carolina. For more information, call (888) 789-TITAN (8482) or visit titantouch.com.