NC lawmakers approve ban on Internet sweepstakes, sending bill to Gov. Perdue’s desk

NC Legislature passes ban on Internet sweepstakes

RALEIGH, N.C. — The North Carolina Legislature voted Wednesday to attempt to make clear again that a 2006 ban on video poker also applies to computer-based sweepstakes games found at businesses inside strip malls and old storefronts statewide.

In an 86-27 vote that gave final passage to the bill, the House agreed to the Senate’s plan to eliminate by Dec. 1 the games that gambling opponents say seduce players and take their money.

The measure now goes to Gov. Beverly Perdue. Press Secretary Chris Mackey said late Wednesday the governor is expected to sign the bill into law.

The vote followed more than two hours of impassioned debate that crossed party lines.

Sweepstakes centers have proliferated since at least two trial judges blocked state agents and police from seizing the machines. The judges ruled that the video poker ban and an ensuing 2008 law designed to close a loophole don’t necessarily apply to the games. Those cases are pending.

Sweepstakes opponents said the Legislature meant to get rid of these kinds of machines, too. Wednesday’s bill, they said, should leave little doubt of its intention.

“I’m tired of playing whack-a-mole with this industry,” said Rep. Ray Rapp, D-Madison, one of the House’s chief supporters of the ban. “We’re trying to come back to you with a clear directive saying, number one, it’s gambling … and number two, it’s banned.”

The industry has said getting rid of the games could do away with up to 10,000 jobs during the ongoing economic slump. Supporters of the games say they’re not gambling but a form of entertainment and marketing for Internet or phone time or office services. Machine opponents say the games, found at more than 900 places statewide, are designed to get around the 2006 ban.

Neil Hoover of High Point, says the games enable his company’s 10 business service centers in the state to keep their doors open as they compete with places like The UPS Store. His outlets face an uncertain future.

“Without our sweepstakes, we probably won’t be able to compete with those businesses. They’re so much bigger than us,” Hoover said. “There are other states that actually welcome our industry.”

Still, a large majority of lawmakers joined local law enforcement officers and religious leaders in arguing the sweepstakes centers are essentially casinos with dozens of computer screens where customers lose money in only a few clicks of the mouse.

“This is an industry for people who do not have a choice, who are addicted on gambling,” said Rep. Grier Martin, D-Wake.

Lawmakers on both sides of the political aisle questioned whether lawmakers should outlaw something that appeared to be a harmless form of entertainment to some but gambling to others. Rep. Becky Carney, D-Mecklenburg, tried unsuccessfully to get a motion heard that essentially would have delayed the bill until next year and avoided a tough vote.

“I’m tired of being judged on whether I’m moral or not depending on whether I support this bill,” said Rep. Carolyn Justice, R-Pender.

Sixteen of the 18 black Democrats present voted against the ban. Many were among the most vocal opponents and complained the Democratic leadership didn’t give them the option to consider the letting the state regulate the machines and collect revenues that will be sorely needed next year.

Sweepstakes machine operators argue lawmakers should have left the games in place while the General Assembly studies the issue and return next year to pass a law that would generate state revenues by licensing machines and owners. Amusement machine owners also argue it would be better to replace the video poker machine ban that took effect in July 2007 with legislation that would revive the industry and give the state 20 percent of the revenues.

“We’ve not had an opportunity to look at some legislation that some would consider relevant,” said Rep. Alma Adams, D-Guilford. “I’m just really disturbed at what I’ve seen in some ways.”

House Speaker Joe Hackney, D-Orange, voted for the ban and expressed his position to fellow House Democrats this week. Hackney told reporters the ban was the only option that had the support of a majority of members. Waiting until next year would have allowed the industry to expand even more, he said.

“I didn’t intimidate anybody. I jut announced my position, and the majority ruled,” Hackney told reporters after the vote.

The measure now would make it a misdemeanor for anyone to operate a game. Repeat offenders could be found guilty of a low-grade felony punishable by eight months to 2 1/2 years in prison.

The bill’s language would not outlaw arcade games and marketing games by soft-drink companies and other retailers that require the consumer to type in a code at a company’s website.