NC Appeals Court Considers Sweepstakes Machines

6:30 AM, Oct 25, 2011   |    comments
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Raleigh, NC -- North Carolina law enforcement and business owners are seeking clarity whether all video sweepstakes machines are illegal, or whether a law trying to end their existence tramples on free speech rights.

The state Court of Appeals scheduled oral arguments Tuesday on two lawsuits after trial court judges gave different answers last year to the legality of the 2010 law approved by the General Assembly. Advocates for the law said the change was needed to end casino-style video games that were taking money from citizens three years after a ban on traditional video poker machines in the state took effect.

While a Wake County judge dismissed a lawsuit filed by an amusement machine company and upheld the law designed to eliminate video and Internet-based sweepstakes games, a Guilford County judge struck down a portion of the sweepstakes ban as too broad and violating the First Amendment.

A three-judge panel could spend up to two hours hearing arguments in each case, considered one after the other. The appellate judges likely won't rule for weeks, or perhaps months. It's possible one or both cases could ultimately reach the state Supreme Court.

The state Attorney General's Office is defending the state in both cases, asking the panel to uphold the law, most of which took effect last Dec. 1.

In the Guilford County case, Hest Technologies and International Internet Technologies software sued the state. They market long-distance phone and Internet services that are sold at outlets across the state. These and other sweepstakes proponents say the computer games are a marketing gimmick, not gambling, by allowing customers and others to uncover potential cash and prizes by clicking on computer screens.

Attorneys for the companies said in a court filing the appeals court should throw out the entire 2010 law because it actually criminalizes "story-driven, arcade-style video games that are wholly unrelated to gambling."

In the Wake County case, Sandhill Amusements argued the 2010 law made it illegal for the company to use video games to show the results of a sweepstakes related to sales of long-distance phone time.

As the law took effect last December, state attorneys told police and sheriff's deputies to enforce only parts of the law that were upheld by both trial judges -- and closing down casino-style games and those "not dependent on the skill or dexterity of the player." Other sweepstakes outlets or retailers continued to operate in the days following by replacing slots and Pot-o-Gold with cartoon-style games.


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