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The "True" Legality of Sweepstakes Centers...

THE LEGALITY OF VIDEO SWEEPSTAKES IN NORTH CAROLINA

As the debate over the legality of video "sweepstakes" parlors rages across the state of North Carolina , the age old cliché that "perception is reality" seems more accurate every day. It has become evident to me that a great number of North Carolinians are forming their opinions on this topic without any true personal effort to gather the facts. Rather, many people seem content to pass condemnation on sweepstakes parlors, and the people who frequent them, with little forethought or data.

Of course, the debate over "gaming" machines in North Carolina is hardly a new debate. Video poker games were legalized in North Carolina in 1993. In 2006, in a nearly unanimous vote, lawmakers decided to place a ban on the very same machines they had approved over a decade earlier. By July of 2007, the last remaining machines were supposed to be unplugged, offline and fade into history.

Not long after the establishment of the North Carolina Education Lottery in 2005, North Carolina representative Earl Jones (D-Guilford), filed the Video Gaming Entertainment Act (H1537). Mr. Jones felt that, in light of the new state lottery, it was a discriminatory action of the state to deny other forms of gaming. He proposed that that the new act would not cause problems for local law enforcement agencies because it would be administered and governed by Department of Revenue which would collect licensing fees from game manufacturers and operators as well as 20% of all proceeds. His realistic estimates meant that North Carolina would receive approximately $300 Million dollars a year from gaming establishments with half of this windfall earmarked for the state’s General Fund and the other half divided among all of North Carolina's poorer county school systems.

Recently, the video gaming industry has begun to flourish in North Carolina once again. However, none of this success has been due to any sort of deal that was struck with the state of North Carolina . The main reason for the comeback is that this new form of gaming is a different altogether. Although there is an incredible amount of resistance by authorities, the games are in complete compliance with existing North Carolina laws. The laws that govern sweepstakes parlors are actually the very same laws that currently allow you to go online and type in the printed code found under your soda cap to win a prize or, for that matter, to peel game pieces off your fast food restaurant cups to see if you are the next big winner.

Even though it may feel as if you have stepped in to a mini casino when you enter a sweepstakes center, it’s not really gambling. It may look like it. It may feel like it. But what apparently nobody seems to understand is that under North Carolina law, it's not gambling. Gambling is defined by the state of North Carolina as a "game of chance" that allows you to win money. However, sweepstakes parlors do not offer games of chance because the machines do not include random number generators like those found in places like Las Vegas , Nevada . Sweepstakes machines are all connected to an internet based server, often in another state, that has a pre-determined number of winners. This is absolutely no different from a fast food company deciding how many winning game pieces are going to be released throughout the country for their latest sweepstakes contest. So, if you remove the element of pure, random "chance" from the equation...
then the games are NOT gambling in the eyes of the law.

Most sweepstakes centers sell a "tangible" item. They sell an actual product that you may keep and, because you purchased the item, you are given sweepstakes entries as a free bonus. The majority of the sweepstakes centers in North Carolina sell phone cards. When a customer enters and purchases a $20.00 phone card (just like purchasing an item such as a drink at a fast food restaurant) you get FREE sweepstakes entries with the purchase. The amount you pay for the phone card determines the number of “entries” you receive. So, going back to the food chain sweepstakes analogy…if you buy five drinks, you will then receive five accompanying game pieces and therefore have five chances to win.

Unfortunately, many city, state and county officials in North Carolina seem very confused about what the definition of "gambling" actually is and, for that sole reason, they are attacking an industry that they do not understand. In the process, they are truly practicing a form of pure discrimination against owners, vendors, operators and the customers of such establishments.

It is quite evident that state of North Carolina understands that they have no legal authority to shut down sweepstakes centers. To demand such a thing would be a violation of the personal rights and liberties of all involved in the sweepstakes industry. However, many city and county governments have decided to take matters into their own hands and try to pass legislation to, in effect, profit from the proceeds from these businesses.

In Wilmington , North Carolina , the city officials recently debated charging operators a fee of $3,000.00 per machine! However, if they truly understood that all sweepstakes centers are simply retail stores like any other establishment; they would quickly realize that these fees are both discriminatory and most likely illegal. If fees of this magnitude could be levied on any business that showed sudden success…where would it stop? In fact, through research I have discovered that many sweepstakes centers that do sell phone cards as "tangible" items are now looking in to the legality of "moratoriums" placed on their businesses and researching lawsuit potential against various city and county agencies. They feel this restriction is a violation of their rights as they are in compliance with North Carolina state law, however, have been placed on hold in ways that no other business must endure.

Then, there is the moral question. The media constantly speaks about people worrying that sweepstakes centers draw more than a fair share of “less desirable” individuals. People keep talking about how such establishments are predatory and tear at the moral fibers of their communities. However, those worrying and complaining don’t seem to realize that the people who frequent these establishments ARE the community. They are the same people who already live next door.

I became more curious about the type of people who actually frequent sweepstakes centers. Were they really undesirable people who were better off having no place to go? I decided to do a little of my own research to find out. I visited the “Triple 777” sweepstakes center located at 5214 Market Street in Wilmington , North Carolina . It was about eight o’clock in the evening and, even though the establishment had 44 machines, there were only fourteen players. I walked around the room and struck up conversations and told each of them about my personal research. Although a few seems slightly annoyed by my approach, most were agreeable and willing to speak to me with ease.

The sweepstakes center consisted of the following:

(2) elementary school teachers ( mid to late 40's)

(1) Vietnam veteran (60’s)

(3) hotel workers (30's - 50's)

(1) real estate agent (mid 20’s)

(1) insurance salesman (40+)

(3) retired female church friends (70+)

(1) car salesman (50+)

(1) "big box" store salesman (30+)

(1) film industry worker (40+)

When I asked these customers what it was that brought them in that night the responses were all generally the same in nature. It always went something like this: "Well, I like to play the North Carolina state lottery...and I like buying scratch-off tickets at the gas stations. I figure if I am going to spend my money anyway this is a lot more fun. I can bring $10 dollars in here and play for hours...or...scratch off a ticket and it's all over."

At this point, I could tell that none of these people were the "seedy" or "shady" types I had heard so much about. These were ordinary, hard working people who all appeared to be well educated and simply had a little extra money that they, as Americans, had the right to spend as they saw fit.

I believe that people have a right to their own opinions on any subject. Everyone’s feelings are indeed valid and important. However, if an opinion is formed with no personal experience or basis in facts or evidence...it must be questioned. I urge you to visit one of these sweepstakes centers for yourself even if you have no intention of playing. Go inside, ask the manager the "hard questions" and see what the answers are.

In my personal experience, if you are afraid of being attacked by a wild pack of wild bingo playing grandmothers...then you might wish to bring a friend along for protection.

Thanks for your time and attention.

Christopher

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