January 30, 2013

NC sweepstakes parlors circumvent law

The (Smithfield, N.C.) Herald

The (Smithfield, N.C.) Herald

It's business as usual at video sweepstakes parlors, despite the fact that the N.C. Supreme Court has outlawed them.

The Supreme Court's decision in December to uphold a ban on sweepstakes parlors went into effect Jan. 3. That day came and went, and the parlors are still open.

One parlor, H&L Business Centre on Town Center Boulevard in Clayton, has posted a sign outside its building that says the store has updated its games to bring them into compliance with state law.

“Our promotional software has been updated and is compliant with all current North Carolina laws,” the sign reads.

But Noelle Talley, spokeswoman for the N.C. Department of Justice, said it is unlawful for sweepstakes parlors to try to circumvent the ruling. “We aren't surprised that this industry may be trying to claim they have found ways around the law,” Talley said in an email.

“We believe the law and the ruling are clear,” she said. “Law enforcement is welcome to consult with our office about what kinds of sweepstakes games and software they are finding operating in their communities.”

In other words, the state is relying on local law-enforcement agencies to enforce the ban. The Attorney General's office is directing law enforcement officers to seek legal advice from its lawyers. David Adinolfi has been one of the main attorneys fielding questions from law enforcement.

Adinolfi declined to comment, saying he could “provide legal advice to government officials only.”

Talley said: “Our attorneys are fielding questions from local law enforcement and district attorneys about how to enforce the recent Supreme Court ruling and how the law applies to changes the sweepstakes industry claims to have made to games.

”We're recommending that law enforcement investigate video sweepstakes operations in their area to determine what games are being played and then take any enforcement action they think necessary against violators. We believe the law and the ruling are clear, and we're ready to defend their enforcement.“

Johnston County Sheriff Steve Bizzell said he's waiting on guidance from state agencies, including the Department of Public Safety's Alcohol Law Enforcement division. ”I'm not going to be the guinea pig,“ he said. ”When I go, I know that we're going to have full leverage on enforcing the law.“

But Bizzell said he would like to begin moving forward with enforcement. He's spoken with ALE agents and is waiting for them to take the lead.

”Right now, if they're in violation, they could be shut down and charged and the machines seized,“ Bizzell said.

Smithfield Mayor Daniel Evans said he'd like to bring town and county leaders together to discuss the issue. He wants everyone to be in agreement on what Internet cafes can and can't do. That would allow officials and business owners to avoid confusion.

”They're going to have a tough time enforcing it if we all have a different set of rules,“ Evans said.

To stay open, parlors are changing their games to reveal winnings before a hand is played. It's called ”pre-reveal,“ and lawyers for sweepstakes parlors say the change brings the games into compliance with state law.

In Clayton, one sweepstakes parlor is reminding its customers that they don't have to pay to play. There is ”no purchase necessary for the sweepstakes,“ according to documents available from behind the desk at P&K Internet Cafe, a sweepstakes parlor center on U.S. 70 in Clayton.

Here's how the parlors generally work: A customer buys Internet time and, by doing so, is entered into a sweepstakes. But like traditional sweepstakes, no purchase is required, and customers at a parlor can enter the sweepstakes by filling out a form.

Armed with ”pre-veal“ and ”no purchase necessary,“ parlors are staying open, and local law enforcement is awaiting state guidance on how to proceed.

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