The Daily Southerner, Tarboro, NC

January 2, 2014

Despite ban, sweepstakes cafes fight to stay open

By VAN HOLLAND
Associated Press

TARBORO — A year after the state Supreme Court upheld a North Carolina law banning sweepstakes cafes, some of the places where people play fast-moving computer games that mimic Vegas-style slots are still open for business.

Over the last year sweepstakes cafes have been shut down and raided by police and their owners and employees have been charged with violating the law. Some of those arrested have been acquitted of the criminal charges.

But not in Tarboro.

Past Times Internet Cafe was raided and computers and money were seized.

Two people that had been charged with operating the illegal games in that Tarboro raid were recently convicted in Superior Court after they appealed their District Court ruling over to the higher court.

The conviction in Edgecombe County occurred Dec. 18 involving the illegal games when the owner of Past Times, Richard Conoley Chapman, 66, and his manger, Kwana Spruill, 37, were convicted by a jury for operating an illegal Internet Cafe.

Chapman and Spruill were both sentenced to 45 days in jail, which was suspended for 36 months of unsupervised probation and he had to pay the cost of court. Chapman was also ordered to pay a $200 fine.

The Superior Court judge ordered that the money be turned over to the school system and that law enforcement return the computers to the owner.

Since the law came into effect that banned the sweepstakes cafes, at least five sweepstakes businesses have since opened back up throughout Edgecombe County.

Since the conviction in the Past Times case, Edgecombe County Sheriff James Knight has conferred with prosecutors and has began an investigation into the sweepstakes businesses that are currently operating inside the county.

"We've talked to the district attorney's office and have decided to look into the businesses that have opened back up in the county," Knight said. "We've started our investigation and have decided to move forward with it after talking to the district attorneys."

There have been five more that have inquired about opening a sweepstakes business up in the Tarboro city limits, but they were turned away, according to Chief Damon Williams.

"I told them if they come here, we will prosecute," Williams said. "I hope that my department's case will set a precedent to ban other sweepstakes businesses in the county and the state."

A few of the operators have turned to the courts for help such as the Lucky Land Internet Cafe owner, which is located on N.C. 33 just outside of Tarboro.

The owners have asked judges to issue orders preventing law enforcement from closing their stores, saying they have new software that puts them in compliance with the statute.

The strategy has created an air of uncertainty in some communities that have been trying to close sweepstakes parlors they say prey on the poor.

While some cities and counties are aggressively trying to shutter the businesses, other communities are allowing them to stay open until key issues are resolved.

Attorney General Roy Cooper said it’s clear that sweepstakes cafes are illegal. He said his office is working closely with local law enforcement and prosecutors, providing legal advice and assistance to close the operations.

But he said sweepstakes owners have been pushing back.  

“I think law enforcement and prosecutors are just going to have to keep plugging away at this,” Cooper said. “I think overall you’ve seen a reduction in the number of these businesses in North Carolina either who voluntarily go out of business or who have been shut down by law enforcement. I think it’s just going to take a period of time before its eradicated.”

But he warned: The sweepstakes industry might not completely go away.

“You still may have them popping up like we did with the payday lending industry. They come up in different kinds of forms. It’s sort of like whack-a-mole. They come up with a different kind of nuance,” he said.

North Carolina lawmakers first passed a ban on video poker and all other electronic gambling in 2006. The industry quickly adapted, introducing new sweepstakes games they said complied with the law.

Lawmakers responded with new legislation in 2008 and 2010 making it unlawful to possess game terminals that simulate slot machines or are used for the display of electronic sweepstakes. The makers of sweepstakes software then sued the state, saying the ban violated their Constitutional free speech rights. The resulting court fight dragged on two years, culminating in the December 2012 Supreme Court decision upholding the ban.

After the ruling, law enforcement agencies began raiding cafes, seizing computers and making arrests.

But sweepstakes owners protested, asking lawmakers to look at new software that reveals the winners in advance, a move they say keeps them in compliance with the law.

With most sweepstakes operations, patrons buy Internet time that gives them the opportunity to uncover potential cash and prizes with mouse clicks on a computer screen.

To play at the cafes, customers get prepaid cards and then go to a computer to play “sweepstakes.” Winners go back to a cashier with their cards and cash out.

The pre-reveal system software allows participants to find out if they’ve won before they play the game.

That issue was a key part of a recent Duplin County case that involved a Charlotte-area attorney who was charged in October with six counts each of gambling, and the illegal use of electric machines and devices for sweepstakes.

But in late December, Judge Henry Stevens IV agreed with Payne, and dismissed the charges.

However, the judge’s ruling only applied to this case. So a year after the Supreme Court ruling, the issue is being played out in other counties — one case at a time.



(The Associated Press contributed to this story.)