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Issue Date: Vol. 52, No. 3, March 2012, Posted On: 2/15/2012

A Sweepstakes Videogame War Erupts In South Carolina

Marcus Webb
electronic sweepstakes games, sweepstakes video game, Internet cafe, Internet sweepstakes, phone card vending machine, slot machine, casino style games, South Carolina sweepstakes games, State Law Enforcement Division, Mark Keel, sweepstakes law

COLUMBIA, SC -- Sweepstakes videogames in bars, restaurants, Internet cafés and even operators' trucks are being targeted for seizure by local sheriffs in South Carolina. Some local judges, who view electronic sweepstakes games to be illegal, are ordering them to be destroyed. But other judges assert they are legal under a state law that permits promotional sweepstakes games.

Surveying the confusion, one prominent state lawmaker predicts that the state Legislature will eventually fight a battle over the legal status of the profitable and highly controversial games. Other observers said the issue could wind up in the hands of the South Carolina Supreme Court.

No wonder the chief of the State Law Enforcement Division, based here, said he is holding off on a previously announced plan to raid video sweepstakes cafés statewide. Two months after taking the job last July, SLED Chief Mark Keel originally vowed that his department would forcefully crack down on sweeps games. Now Keel admits that further investigation, including a legal seminar that touched on the subject, has made him back off.

Simply stated, Keel is uncertain if sweeps videogames are legal after all, as maintained by industry members, according to a story in the State newspaper.

Ironically, Keel's SLED predecessor Reggie Lloyd is now a lobbyist for sweepstakes game companies. Lloyd argues that the devices are legal under state laws that permit promotional games.

In Kershaw County, Sheriff Jim Matthews calls the sweepstakes defense a "scam." County cops seized 10 games at c-stores and even from operators' trucks between Jan. 26 and Feb. 9, said a South Carolina TV news organization.

Police in other jurisdictions have been seizing up to 24 sweeps games at a time from a single Internet café. Raids in Bluffton and Hardeeville confiscated machines made by Texas-based Hest Technologies.

District judges continue to issue conflicting rulings on the legality of the machines. Three magistrates -- from Kershaw County, Georgetown and Greenville County --ruled sweeps games are legal. A judge in Horry County more recently ruled they are illegal. According to local press outlets, the question may eventually land on the docket of the state Supreme Court.

The cities of Greenville, Sumter, Beaufort, Bluffton, Port Royal, Hardeeville and Charleston have also seen actions by police, courts and local governments that either seized, approved or banned the devices over the past several months. In late January, the Charleston City Council imposed a six-month moratorium on new licenses for sweeps cafés.

The growing controversy over sweeps games is increasingly on the radar of state lawmakers. In January, state Rep. Phyllis Henderson (R-Greenville) sponsored a bill to outlaw "casino-type" games, a measure that she said should include sweepstakes videogames. In February, state Rep. Leon Stavrinakis (D-Charleston) predicted the state Legislature would erupt into a battle over the legality of the devices.

One locally produced sweeps game, which is part of a phone-minutes vending machine called Magic Minutes, is manufactured and operated by a former investigator for a South Carolina district attorney and his wife, a former police officer. These previous law enforcement officials said they agreed with sweeps operators and with any number of district judges across the state that sweeps games are legal promotions.

Hest Technologies has advanced another legal argument in favor of its devices, asserting that the machines are collection points for charitable contributions to benefit autistic children, not gambling devices. Some judges have apparently found in favor of Hest under this doctrine.

South Carolina banned video pokers in 2000, eliminating an industry that was variously estimated to generate between $2 billion and $3 billion in annual revenues. Legal poker machines had become a major cause of political controversy in a gubernatorial election campaign.

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