January 26, 2013

Leaders renew push for sweepstakes ban

After an attempt to ban sweepstakes-style video gaming machines failed last year, South Carolina lawmakers are trying again.

After an attempt to ban sweepstakes-style video gaming machines failed last year, South Carolina lawmakers are trying again.

The state Senate has passed a bill that would close a loophole that some say sweepstakes operators use to place the computerized machines in stores and bars. The bill is now being considered in the House of Representatives.

Lawmakers decided to act after judges across the state issued conflicting rulings about whether the machines, which offer games to customers who purchase Internet time or sweepstakes entries, were illegal.

Earlier this month, officers and agents from the State Law Enforcement Division seized multiple game systems from three shops in Horry County. At the same time in Georgetown, six shops were investigated and 28 machines were seized.

The games, Horry County Police Chief Saundra Rhodes said this week, are illegal because they pay out money.

On Jan. 15, officers and SLED agents went to Magic Minutes on Carolina Forest Boulevard and seized 21 screens, one tower, one monitor and more than $600, Rhodes said. The same day, police went to Alpha Omega Computers on U.S. 17 Business near Surfside Beach where 37 screens, 21 towers and more than $1,400 were seized, she said.

On Jan. 17, 21 computers were seized from the 5 Star Internet Cafe Sweepstakes on North Ocean Boulevard in Myrtle Beach.

No arrests were made in either Horry County or Georgetown County this month.

In Beaufort County, the 14th Circuit Solicitor’s Office successfully argued that machines seized in raids on businesses in Bluffton, Beaufort and Port Royal were banned under anti-gambling laws.

Since Judge Darlene Smith ruled against Hest, the local game operators, the sweepstakes machines have not reappeared in the county, Solicitor Duffie Stone said.

“We won our case, and that’s the reason you don’t see sweepstakes in businesses around here anymore,” Stone said. “But that didn’t happen everywhere.”

Smith also ordered that the machines, made by Texas company Hest Technologies, be destroyed. The Beaufort County Sheriff’s Office instead gave some of the computers to charity in July.

Since the ruling, Hest executives have been arrested in Texas on felony gambling, money-laundering and organized-crime charges, according to the Fort Worth Star-Telegram. Attempts last week to reach Hest executives and the company’s South Carolina attorney, Johnny Gasser, for comment were unsuccessful.

The bill in the legislature, which explicitly outlaws machines manufactured by Hest and other companies, is in a subcommittee of the House Judiciary Committee, whose members include new state Rep. Weston Newton, R-Bluffton.

Newton sides with law enforcement and prosecutors around the state who believe existing legislation already bans the machines.

He declined specific comment on the bill unless it reaches the full committee, saying only that sweepstakes operators are using a “creative argument” that’s not supported by law.

The operators compare their games to McDonald’s Monopoly promotion, saying customers pay for a product, such as Internet time at a cafe, and get to play video games for a chance to win prizes.

The loophole they point to is a provision in the state’s gambling laws saying businesses with beer and wine permits can hold promotional sweepstakes.

State Attorney General Alan Wilson and State Law Enforcement Division Chief Mark Keel have deemed the machines illegal. Both have said there is no loophole but have asked the legislature to clarify the law so sweepstakes operators no longer have that excuse to open. In the past year, SLED has confiscated more than 1,100 sweepstakes machines, Keel said.

South Carolina’s gaming industry has a history of hiring high-powered lobbyists to influence votes.

Lobbyists are on the payroll for gaming companies, but so far they have done little to slow the bill. Sen. Larry Martin, R-Pickens, the bill’s sponsor and chairman of the Senate Judiciary Committee, said the bill benefited from a blank calendar.

“In some ways, it may have caught them flat-footed that it moved as fast as it did,” Martin said.

The (Columbia) State and The Sun News contributed to this report.

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