Local lawmakers say they don’t see much hope for a bill filed to revive the Internet sweepstakes businesses in North Carolina.
State Representatives Michael Wray, for the 27th District, and Jeff Collins, for the 25th District, filed a bill earlier this month that, if passed, would legalize, tax and regulate Internet sweepstakes. The current bill was referred to the Committee on Commerce and Job Development.
In addition to these two taxes, the bill would impose, “An annual excise tax of four percent of the taxable gross receipts from operating an electronic sweepstakes device is levied on each electronic sweepstakes establishment.”
The bill would also require a disclaimer be displayed before the customer reveals an entry telling them that they have entered a sweepstakes games that has been predetermined.
The new bill would also limit the amount of money that can be won to no more than $10,000 and every 60 days after the winners have been determined, “… an electronic sweepstakes gaming device operator shall provide the Department of Revenue with a certified list of the names and addresses of all persons who have won prizes with a value of more than one thousand dollars ($1,000), the value of the prizes, and the dates when the prizes were won.”
State Rep. Kenneth Goodman told Scotland County leaders last week that he did not think the bill would ever make it to the House floor for a vote.
“I don’t think that bill is going anywhere,” Goodman said.
Rep. Garland Pierce agreed, but also acknowledged that, if legalized, the machines “could raise a lot of money” by way of taxation.
“The state is on the hunt, looking for sources of revenue, and I do know that some people like the machines,” Pierce said.
Pierce also asked county leaders if they would support legalizing the machines and making them taxable. County Manager Kevin Patterson said that the board had not discussed the matter since the bill was proposed.
“But last year (Pierce) actually filed a local bill on our behalf which would have effectively done the same thing,” Patterson said.
That bill was rendered moot when the North Carolina Supreme Court ruled against sweepstakes owners in a case regarding their legality.
Patterson said that the sheriff’s department is currently engaged in law enforcement activities against those businesses operating the illicit machines, in coordination with federal agencies.
But Patterson also said that the potential profit far outweighs the punishment.
“I know that there are still locations in the county that have them. It is only a $250 fine — a misdemeanor, and they can make literally that much in an hour with one (machine),” Patterson said.
The battle over sweepstakes legalization has been on going since 2010.
On Dec. 14, 2012, the state Supreme Court ruled that the 2010 law that outlaws video sweepstakes machines, G.S. 14-306.4, is constitutional and therefore can be enforced by law enforcement officers.
On Jan. 28, 2013, Superior Court Judge Robert Johnson signed a temporary restraining order that prohibited law enforcement agencies from taking action against sweepstakes business owners who use software made by International Internet Technologies. That temporary restraining order was dismissed in February.
Laurinburg Mayor Tommy Parker suggested that any legislation dealing with sweepstakes be free of ambiguity.
“Whatever you do, try to make it so that there is no grey area,” Parker said. “(The city) spends an inordinate amount of time listening to vendors who want to (have the machines) but the public seems against it, for the better part, and it directs the city’s attention in the wrong direction.”
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