"Sweepstakes" Gambling Bill Moves Forward

Special Report - July 7, 2008
A bill moving through the North Carolina House is aimed at closing a loophole the gambling industry has exploited to skirt the state’s ban on video poker. On July 1, the House Judiciary 1 Committee replaced the contents of SB 180 with provisions that would make it unlawful to “promote, operate or conduct a server-based electronic sweepstakes.” The bill also would ban the possession of any game terminal “with a display that simulates a game ordinarily played on a [video gambling] slot machine.”

The North Carolina General Assembly banned the possession and operation of video poker machines in North Carolina in July 2007. Since that time, however, a new industry has cropped up that is circumventing the video poker law. This industry sells phone cards, which are redeemable for phone or Internet services, but the cards also allow the purchaser to enter a sweepstakes game that is played on a video terminal resembling a video poker or slot machine. The industry claims the video machines are not illegal gambling devices, because the sale of the phone card provides the purchaser something of value and the sweepstakes is just an added benefit, similar to the sweepstakes offered by soft drink and candy manufacturers.

A similar “phone card” ploy was used by the gambling industry before the lottery was enacted in North Carolina, when certain convenience stores were selling phone cards that looked like lottery scratch-off tickets. SB 180–Prohibit Certain Sweepstakes is scheduled for consideration by the State House on Monday, July 7.

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