(Star-News (Wilmington, NC) Via Acquire Media NewsEdge) Jan. 01--When North Carolina outlawed video poker in 2007, a loophole gave rise to sweepstakes. Now, with a ban on sweepstakes set to take effect on Thursday, a crafty gaming industry may have already found a way to skirt it.
Attorneys for two companies that provide gaming technology wrote in a letter to law enforcement last month that their clients planned on converting their sweepstakes to a "non-entertaining reveal system." The letter noted that one state court ruled that such a system did not violate the ban on sweepstakes, which only prohibits using "electronic entertaining displays to reveal sweepstakes winnings."
Sweepstakes parlor patrons buy pre-paid Internet and phone time that gives them the chance to win cash by playing games on an arcade-like computer screen. Some games are similar to slots and poker. It was not clear what a non-entertaining system would look like.
"Every time a law comes into effect there's a loophole that they try to lasso," said Capt. David Ciamillo, commander of New Hanover County's Vice and Narcotics Unit. "Whether that loophole is legal is something lawyers are going to have to hash out."
Local governments have tried for years to staunch the proliferation of sweepstakes through zoning regulations and fees. But the ban, passed by the N.C. General Assembly in 2010, was the first statewide initiative to shut down the parlors.
Last monht, the N.C. Supreme Court upheld a ban on sweepstakes as constitutional. Now law enforcement is trying to figure out how and when to begin enforcing it.
Eddie Caldwell Jr., executive vice president and general counsel for the N.C. Sheriff's Association, sent a letter informing sheriffs that enforcement can begin as soon as the court's decision takes effect on Jan. 3. He advised law enforcement to consult with their legal advisors and respective district attorneys if they run into machines converted to a non-entertainment reveal system.
But some counties said they are likely to hold off entirely.
Driving their hesitation is the fact that the gaming industry asked the state supreme court to stay its judgement until the U.S. Supreme Court decides whether to hear the case. Even if that request is denied, some counties say they will wait until the federal justices render a decision before cracking down.
New Hanover County plans on sending out letters telling sweepstakes halls they have until March 18 to shut down. Sharon Huffman, an assistant county attorney, said the grace period will give time for the legal process to run its course.
After that date, though, law enforcement is expected to begin bringing criminal charges against sweepstakes halls that are still open.
In neighboring Brunswick County, officials will probably discuss what action to take after the holidays, said county manager Marty Lawing.
"It's been kind of a tricky situation," Lawing said. "There always seems to be loopholes that they find in any legislation or court order that's handed down. So it may be the same this time."
Sweepstakes supporters point to the tax revenues parlors generate and the jobs they create as reasons to keep them open.
"That's something that nobody ever thinks about -- putting more people out of work," said Leo Daniels, who operates two parlors in New Hanover County that together count about 10 employees.
"Our customers, they don't appreciate the state government trying to tell them what they can and can't do with their own money, especially when the state is selling lottery tickets," Daniels added, referring to the N.C. Education Lottery.
Brian Freskos: 343-2327
On Twitter: @BrianFreskos
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