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Wednesday, 01 May 2013 01:16

Sweepstakes industry chalks up tiny victory with uncertain bearing

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A convenience store owner in Macon County was let off the hook by a judge for four misdemeanor charges of operating illegal sweepstakes machines — but it will have little or no bearing on the state’s ban on the machines.

 

The outcome of the single case also will not affect other similar cases cropping up across the state nor how police enforce the law against rouge sweepstakes operators flaunting the ban.

In December, the North Carolina Supreme Court ruled that the video sweepstakes are a form of gambling and thus illegal under state law, despite protests from the gambling machine industry that the law didn’t apply to sweepstakes.

In January, law enforcement slowly began shutting down sweepstakes parlors and issuing cease and desist notices to gas stations sporting the machines.

Those who kept running the games were charged.

Police in Waynesville, Maggie Valley, Sylva, Canton and deputies in Macon County made arrests.

Among those charged was Mark Berry, a convenience store owner in Macon County. Attorneys George Hyler and Steve Agan of Asheville represented Berry, who has four machines from the Georgia-based company Gift Surplus in his store.

The machines are different from previous incarnations of sweepstakes gambling. Instead of winning cash payouts, players only win prizes.

Once someone is done playing, a receipt prints out with his or her winnings, which may be redeemed for a prize. The idea is similar to playing games at an arcade, where kids received tickets that they can trade in for prizes. 

During Berry’s court hearing, an expert witness was called in to testify and claimed the specific brand and type of machines in Berry’s business were legal. 

District Court Judge Donna Forga, who heard Berry’s case, declined to comment on her decision.

“I don’t think I could do that,” Forga said. “Especially because there are other cases that are so similar that are still pending.”

Although she found Berry not guilty, certain facts surrounding the other pending cases may be different and sway another district judge to rule differently.

“This is one judge’s interpretation of the law,” said Brian Welch, attorney for the Macon County Sheriff’s Department. “Other district court judges could see different.”

As a district court judge, Forga’s ruling has no bearing on the law, and it does not mean that sweepstakes machines offering prize winnings are now legal. For example, just because a judge finds someone not guilty of robbery does not mean robbery is deemed legal.

“She did not make any findings of fact of the legality of the machines,” said District Attorney Mike Bonfoey. “(The verdict) could mean that the state did not prove its case or she had a reasonable doubt.”

However, it is clear that sweepstakes manufactures and parlor owners are gearing up for a legal challenge over the ban in a higher court, which could have future implications. A judge from a superior court would need to rule in favor of sweepstakes owners and conclude that the new machines are legal before it impacts the state law.

After the verdict, Berry is once again operating the sweepstakes machines. Welch admitted that some might take the not guilty verdict as license to turn their video gaming machines back on if they believe they will face little or no repercussions. But he said the sheriff’s department will not change how it enforces the current ban on the contraptions.

“We are still going to investigate any complaints and reports we get,” Welch said.

Although the legality of the new machines is still up in the air, it is clear that law enforcement agencies are once again being forced to wade into murky waters when it comes to whether certain video gambling machines are permissible.

“We are still in a grey area. The same grey area we have been in for years now,” Welch said.

Judges will hear similar sweepstakes cases — a routine proceeding where a judge hears the facts of a misdemeanor charge before rendering a verdict and sentence — in Jackson, Haywood and Macon counties in May. The expert who testified in the Macon hearing, Nick Farley, owner of a regulatory compliance test laboratory that inspects sweepstakes machines in Ohio, will also star in an upcoming Haywood County case.

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