From The Sip Trunking Experts

TMCNet:  Internet sweepstakes businesses lose this round

[December 18, 2012]

Internet sweepstakes businesses lose this round

Dec 17, 2012 (Sun Journal - McClatchy-Tribune Information Services via COMTEX) -- Scott Singleton of New Bern has been cooking pigs for Moore's Bar-B-Que since he was 18 years old and about two years ago, he made a bet on his own business and took over an internet sweepstakes business he named Good Times.

Little by little, he used the money he made with the business as a second job to decorate and expand the U.S. 70 East location, buying a few new computers at a time up to the 50 now in operation on which customers can buy time to use however they choose, including playing internet sweepstakes while they drink free coffee and play other games of chance he has installed.

With Friday's N.C. Supreme Court decision upholding a law banning the video games with sweepstakes run by businesses like his set up across the state, including 10 in Craven County, Singleton is getting the feeling he may have lost the bet.

Others like 70 Connections, Glenburnie Internet Cafe, and probably the largest -- New Bern Business Center on Neuse Boulevard -- may be holding the same hand with the ruling on two cases in which amusement machine and other companies sought to have overturned a 2010 law that banned sweepstakes machines as a form of gambling.

Amusement machine companies, a software developer, and firms that market long-distance phone and internet services argued in court there is no gambling because prizewinners are predetermined. They also argued that the video gaming enjoyed free-speech protections just like books and films under a U.S. Supreme Court ruling last year.

State attorneys countered that no one has a right to run a gambling business operation.

The court ruled that state law regulates the conduct of playing the sweepstakes games, which opponents say feed the same gambling addictions as video poker machines.

"While one can question whether these systems meet the traditional definition of gambling," Justice Robin Hudson wrote for the court, "it is clear that the General Assembly considered these sweepstakes systems to be the functional equivalent of gambling, thus presenting the same social evils as those it identified in traditional forms of gambling." "Playing the sweepstakes is no different than buying a scratch-off ticket," said Singleton. "There is a predetermined number of winning numbers just like are sold in the North Carolina Education Lottery. How can the government do the same thing and tell us we can't do it anymore " "We also have other games and activities here," Singleton said, spinning the wheel on his Moonlight Madness game that works something like Wheel of Fortune and pulls multiple participants into a game of chance with interaction.

"We give things a game show feeling and have the results revealed in an entertaining way," he said. "People get to spin the wheel or pop a balloon; there's a green glow with the black lights and they get a chance to win things like that TV over there." "This is entertainment; it's not all about sweepstakes," said Singleton. "A lot of folks have never been in a place like this and have a preconceived idea of what it is -- the wrong idea about it." Singleton has set up a two-side operation -- one for non-smokers, the other for smokers -- with separate heating and air conditioning systems and glass windows so both sides can still feel like they are together.

"Some people come in and buy online time to do work while they are away from their computer or to stay in touch with family and friends if they don't have internet at home," he said. "About 60 percent of the people who come here are 40 years old or older; the others are 18 and up." No alcohol is served and no inappropriate behavior tolerated, he said. "Most of the people who come here don't spend any more than they would to go to the movies. They're just having fun." Sweepstakes operators have found ways around the laws in the past and an industry spokesman said following this ruling that owners will try to stay open by making adjustments to their business model to meet the letter of the law.

"I may have to adapt," said Singleton. "It's too soon to tell yet how this is going to play out. We have 20 days to comply. I have a lot of time, effort and money invested here that I hope I never lose." The Associated Press contributed to this report.

___ (c)2012 Sun Journal (New Bern, N.C.) Visit the Sun Journal (New Bern, N.C.) at Distributed by MCT Information Services

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