LPD spreads the word to gaming operators

Jan. 11, 2013 @ 07:45 AM

Since a ban on sweepstakes gaming was upheld by the North Carolina Supreme Court, a few Lenoir businesses still operating the gaming machines have installed software that tells users before they play if they have a chance to win.
Software developers and lobbying groups behind Internet sweepstakes gaming feel this is outside of the prohibition, but law enforcement sees things differently.
Lenoir Police Chief Scott Brown said Thursday that officers were handing out notices to businesses still operating machines that the department would begin enforcing the law on Monday, Jan. 14. According to a statement from the department, the city currently has 15 locations that have or have had electronic gaming machines. Under the law, operation of five or more machines is a Class G felony.
“We understand that over the past two or three years, this activity has been legal, so we certainly don’t want to cause any more problems or inconvenience for those business owners than we have to,” said Brown. “It is now illegal, and it’s our obligation to make sure we enforce the law and shut these places down. What I expect is that once we’ve informed them of the law, our understanding of the law and our intent, they’ll close down voluntarily. I don’t anticipate search warrants and seizures and arrests or those kinds of things. I expect people will voluntarily comply with the law, and we’ll move on to the next issue.”
Brown said that compliance would, at some point, require the removal of the computers used to access the gaming network. For now, though, they have to be turned off.
“It’s not illegal to have them; it’s illegal to operate them,” he added.
Once the court ruled that the ban didn’t violate free speech, the gaming industry released updated software that gave players advance notice of their chances of winning. Industry attorneys also said operators could run sweepstakes games legally by disconnecting them from the network despite the court ruling. Brown said the groups associated with Internet gaming have had plenty of time to formulate plans to work around the law.
“Obviously the industry has had the last two-plus years to prepare for this ruling, so what they’ve developed is what’s been described to me by several business owners as a pre-reveal system,” he said. “That tells the player, before they play the game, whether or not they’re going to win. In the opinion of the software companies and the business owners, that skirts the law, so to speak. By notifying you whether or not you’re going to win, you can elect not to play. I’m of the opinion, and I believe the North Carolina Supreme Court is of the opinion, that it doesn’t matter. The statute is clear that whether or not the system is set up to pre-reveal, it’s still a violation of the law.”
The chief said his department has been in contact with the Caldwell County Sheriff’s Office as well as the police departments in each county municipality as well as the District Attorney’s office to make sure everyone is consistent in both plan and action to enforce the ban.
“That’s been one of the most interesting parts of this project — seeing how well we work together and the partnerships we’ve built over the years, how effective they can be,” Brown said. “We’re not doing anything in the City of Lenoir that the Town of Hudson, the Town of Granite Falls and the county of Caldwell are not doing. We’ve been on the same sheet since 20 minutes after the ruling, and we’ve work cooperatively to study the law and to make sure we understand what we can and can’t do.
“I can’t brag enough about the District Attorney’s office. We’ve met personally with Jay Gaither and Eric Bellas and several members of his staff to make sure we’re all singing off the same page. I believe we are, and I believe we’re prepared to prosecute these cases. I just hope we don’t have to.”
Lobbying groups and industry insiders say the court’s ruling will shut down a market potentially worth $1 billion. An industry web site, VendingTimes.com, reported that about 15,000 North Carolinians employed by the industry will lose their jobs and towns that license sweepstakes cafés will lose various revenue sources ranging from business license fees as well as taxes and other fees from each machine in a location.