CMPD delivers notices to sweepstakes operators

CMPD delivers notices to sweepstakes operators


by APRIL BETHEA / Charlotte Observer

Posted on January 10, 2013 at 9:00 PM

Updated Friday, Oct 18 at 3:37 PM

CHARLOTTE, N.C. -- Less than a week after closing, some sweepstakes shops are re-opening across the area after adjusting the software behind the games enough to stay within the law.

But while the companies say they think they’ve found a way to stay in business, they’re hesitant about their future. And police and sheriff’s offices are trying to make sure operators know about the law.

Sweepstakes parlors across North Carolina shut down on Jan. 3 as a two-year-old law banning the games finally went into effect. The fate of the measure had been up in the air after a lawsuit was filed by two amusement machine and other companies, but the N.C. Supreme Court last month backed the state law.

On Thursday, the Charlotte-Mecklenburg Police Department began handing out notices to sweepstakes companies across the city as a way to ensure they know the law, said police Deputy Chief Vicki Foster.

Foster said there are about 100 sweepstakes parlors in the city, but so far the police have not run into any problems with the businesses.

Charlotte-Mecklenburg police have previously said the department would enforce the ban on a case-by-case basis. Authorities across the state say the wide variety of the sweepstakes software makes it difficult to make hard-and-fast guidelines on what does and doesn’t comply.

In its notice to sweepstakes operators, CMPD said it is aware of companies that have made upgrades to machines they believe will allow them to operate. For example, one of the software changes would tell a player whether or not they’ve won right away, before the game is visually displayed on the screen.

Police recommend that companies consult a lawyer if they have questions about their equipment. Violators of the law could face criminal charges.

“This notice is by no means to be construed as a moratorium on CMPD enforcement options or approval of any particular sweepstakes operation,” the notice reads. “CMPD will continue to enforce the laws related to these devices on a case by case basis.”

Sweepstakes games have cropped up in recent years, some say, because of a loophole in the 2007 law banning video poker. Patrons at the parlors buy Internet or phone time that gives them the opportunity to uncover potential cash and prizes with mouse clicks on a computer screen.

Critics say the games feed the same gambling addiction as video poker. But supporters say there’s no gambling because prizewinners are predetermined.

Enforcement of the sweepstakes ban has varied across the state, says Eddie Caldwell, executive vice president of the N.C. Sheriff’s Association. He said some law enforcement offices notified operators about the law around the time it went into effect, while others are taking more of a wait-and-see approach.

In Union County, Sheriff Eddie Cathey said investigators had already begun shutting down some businesses in the past six months that were operating illegally while the lawsuit was making its way through the courts. Others that remained open closed earlier this month.

Cathey said his agency has met with business operators who believe they have found a way to re-open and comply with the law. But so far, none of the businesses in Cathey’s jurisdiction have reopened.

“Our people have realized that we’re going to enforce the laws, and they’ve shut down,” he said.

Uncertainty ahead

Tom Wicker is among the many sweepstakes operators affected by the state law. He has three businesses in the area, and says he closed all of them by the Jan. 3 deadline.

But he said he was back up and running a few days later, after the manufacturer that he gets his machines from made an upgrade that authorities in some counties say complies with the law. Wicker said a Charlotte-Mecklenburg investigator visited his Pots of Gold Sweepstakes I location on Independence Boulevard this week and said he believed the revamped machines were fine.

Wicker said the new way the games work has received mixed reviews from customers, some of whom feel the “instant reveal” takes the excitement and anticipation out of the game.

Still, even with the software change, Wicker voiced uncertainty about the future of his business. He said he thinks most operators want to follow the law, and he would support some regulation and taxing of the games. But he wishes there were clear guidelines on what is or isn’t allowed, and worries about thousands of workers at sweepstakes shops who could lose jobs under the ban.

“It’s too hard to operate,” Wicker said. “Right now, I wouldn’t go out and buy another machine or anything because I might be thrown out next week.”

Caldwell, of the state sheriff’s association, said he has encouraged law enforcement agencies to look into any cases involving sweepstakes companies the way they would handle any other possible crime. “You have to investigate,” he said, which could include consulting with lawyers, state law and playing the games to see how they function.

Caldwell also voiced concerns about out-of-state operators who may be pushing companies to keep working, while local workers may be the ones to face punishment if the machines are found to be improper. “The people who are going to suffer the penalties are just good, everyday folks,” he said.