Lawmakers consider ban on Internet sweepstakes games

June 25, 2010

_{This first appeared in the McDowell News}

Legislation banning Internet sweepstakes games breezed through the N.C. Senate by a 47-1 vote Monday, but may not have the same smooth ride in the N.C. House.

Other lawmakers said they'd like to slow down, look more closely at the issue and consider taxing the games, as the industry itself has suggested. Others said they want to ban the computer games now, criticizing the games for targeting the poor.

Rep. Mitch Gillespie, R-McDowell, said he's voting in favor of the ban.

"I plan on voting on banning them," said Gillespie from his Raleigh office. "I think the decision has been made today to bring it up for a vote. I think the majority of the people are going to vote for the ban."

Gillespie said that he and other lawmakers have been "bombarded" this week by people lobbying against the ban. They argue that the "sweepstakes" cafe create jobs and the ban would do away with that.

"I understand the argument that it is your money and you should do what you want with it," said Gillespie, adding that this is a form of gambling that takes advantage of the poor.

Sen. Joe Sam Queen, a Democrat, was one of the many state senators who voted in favor of the ban on the sweepstakes games.

The bill makes clear the ban on video poker machines that became law four years ago includes so-called sweepstakes cafes appearing in strip malls across the state. They have been operating within a legal loophole and this legislation closes it.

Earlier this year, a 61-year-old Madison County grandmother was arrested for robbing the Wachovia bank in Marshall after she ran up debts at sweepstakes cafes. She told authorities she felt robbery was her only recourse, according to a news release from Queen’s office.

"Let me be clear, I will do everything I can to support legitimate businesses," said Queen. "However, sweepstakes cafes are nothing more than casinos operating outside the law. We outlawed video poker and that's all this is, but worse. These places are popping up overnight and taking and people are losing their life savings. I stand firmly with the sheriffs and police chiefs across the state have asked for us to tighten the law because an increase in crime comes along with them."

The Senate bill approved Monday also faces the near-certain continuation of court challenges that have stymied past efforts to ban these and similar games.

"It's in the court system now," state Rep. Larry Womble, D-Forsyth. "So we should wait until the courts make a decision on it."

Sweepstakes supporters have said the state could bring in $500 million a year by taxing the industry. Already, at least 28 North Carolina cities want to tax the Internet cafes. Winston-Salem, for example, stands to bring in as much as $700,000 on existing machines in the coming year under a measure the council has approved.

The industry also points to the jobs sweepstakes "cafes" create, something Womble and state Rep. Earline Parmon, also a Forsyth County Democrat, mentioned.

Parmon said jobs in such cafes pay an average of $10 an hour, well above minimum wage.

"We really need to look at the impact (of a ban)," she said.

Speaker of the House Joe Hackney has said he favors an outright ban, which is contained in House Bill 80. Several Republicans said they had mixed feelings on an outright ban, but they leaned toward it anyway.

State Rep. Brian Holloway, R-Stokes, said he doesn't like the fact that the state runs a lottery, but won’t let private businesses run their own games. Holloway also said that sheriffs in the two counties he represents - Stokes and Rockingham - feel the games are a problem, so he'll vote for the ban.

"If we're opposed to video poker, I think we need to be opposed to this as well because I think they're one and the same," Holloway said.

State Rep. Larry Brown, R-Forsyth, said he's likely to support the ban as well. He said legislators who want to "allow it and tax it to death" want to use the new money "for pork barrel projects more than anything."

"I think the disadvantages outweigh the advantage," Brown said. "And, if people disagree with me, I'd like to hear from them."

Brad Crone, a consultant for The Entertainment Group of N.C., which is basically a trade association for sweepstakes cafe owners and similar electronic games, said he expects an uphill fight against the ban. But he called for regulation, saying a ban would simply force the games underground.

"If you think that banning it's going to solve the problem, you're kidding yourself," Crone said.