Sweepstakes Lawsuits Dropped

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Sweepstakes Lawsuits Dropped

Special Report - October 26, 2010
Two Internet sweepstakes companies have dropped their lawsuit challenging fees assessed on their operations by the cities of Fayetteville, Lumberton, Pembroke, Morganton, and Wilmington. The suit was originally filed by attorneys for International Internet Technologies Inc. and Hest Technologies in Burke County Superior Court in August 2010. It alleged that the cities’ implementation of licensing fees on Internet sweepstakes gambling businesses constituted a violation of the Internet Tax Freedom Act. According to the Fayetteville Observer, “lawyers for both companies voluntarily dismissed their suits without prejudice, according to Burke County Superior Court records provided [October 19] by the city of Fayetteville.” By dismissing the suits without prejudice, the attorneys may choose to pursue the claims in court sometime in the future.

As we recently reported, more than a dozen Internet sweepstakes businesses won a request for a Cumberland County judge to issue an injunction preventing Fayetteville from collecting fees on the operations until after a separate lawsuit on the merits of the fees concluded. Fayetteville was one of a number of municipalities across North Carolina to recently institute fees on Internet gambling. The General Assembly passed HB 80—Ban Electronic Sweepstakes this summer. The ban prohibits conducting or promoting sweepstakes activities that involve gambling, and goes into effect December 1.

Related resources:
Injunction On Internet Gambling Fees - October 18, 2010