CHARLOTTE, NC -- The North Carolina Court of Appeals ruled on March 6 that the state's ban on Internet-based sweepstakes videogames is unconstitutional because it restricts free speech. The law's vague language also improperly restricts amusement-only videogames, the court said.
Two of the court's justices signed the ruling that stated, "The General Assembly cannot, under the guise of regulating sweepstakes, categorically forbid sweepstakes operators from conveying the results of otherwise legal sweepstakes in a constitutionally protected manner."
The panel's third judge dissented.
State Attorney General Roy Cooper said he would appeal the decision to the North Carolina Supreme Court.
North Carolina banned video poker in 2006 and the state Legislature tried to outlaw sweepstakes games in 2007, but two separate district court rulings in 2008 have kept the market open. Lawmakers finally banned sweepstakes videogames in 2010. | SEE STORY
Operators of the games are "extremely pleased" by the Appeals Court verdict, said Internet Based Sweepstakes Organization president Chase Brooks of Front Edge Marketing (Chapel Hill). IBSO has been lobbying for two years to have sweeps games regulated and taxed.
Observers estimate that North Carolina has 1,000 sweepstakes game locations. A year ago, Brooks widely estimated that the state's sweepstakes industry generated gross revenues between $500 million and $1 billion a year.