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NC Judge Mulls Sweepstakes Games; FL County Plans To Outlaw Them

Posted On: 11/23/2010

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Hest Technologies, Internet International Technologies, sweepstakes video game, North Carolina sweepstakes, Florida sweepstakes, Judge John Craig III, video game, gambling machine

GREENSBORO, NC -- A ruling is expected any day in a key Internet sweepstakes game case in which two operators, Hest Technologies and Internet International Technologies, are challenging North Carolina's ban.

On Nov. 18, plaintiffs' attorneys argued in Guilford Superior Court that server-based sweepstakes videogames deserve protection as free expression under the First Amendment of the U.S. Constitution.

According to one local press report, Judge John Craig III appeared to favor the operators' argument. On being told that the state was attempting to suppress the "expression" of a simulated casino game, Craig stated: "The First Amendment says you cannot do that."

The plaintiffs' case also made the familiar argument that videogame sweepstakes are essentially no different from promotional sweepstakes run by fast food restaurants.

If Craig rules in favor of the operators, it could block implementation of a ban imposed earlier this year by the North Carolina General Assembly.

The ban goes into effect Dec. 1. But many operators say they will modify their sweepstakes games to ensure that the devices technically conform to the language of the new law -- and thus may continue to be operated. [see story]

The Nov. 18 court session was actually the plaintiffs' second case before the same judge. Two years ago, Hest and IIT sued on the grounds that sweepstakes games conformed to then-current gambling laws.

At the time, Craig ruled in favor of the operators. He also issued an injunction against law enforcement's raiding locations with the plaintiffs' devices -- a move that both helped shelter the sweepstakes game industry across the state, and also helped prompt North Carolina lawmakers to pass the Dec. 1 ban.

In Florida's Seminole County, the county attorney has neatly sidestepped both the "fast food sweepstakes" argument with a proposed new ordinance that, if adopted by the County Board of Directors, would simply outlaw casino game simulators in public venues.

If adopted, however, the county's ordinance might not survive a Constitutional challenge like the one heard this month in North Carolina.