Internet Sweepstakes Cafes Blog

Your source for current news about internet sweepstakes cafes!

Internet Sweepstakes Cafes Blog - Your source for current news about internet sweepstakes cafes!

Raleigh North Carolina Police Await Opinion On Internet Sweepstakes Cafes

RALEIGH, N.C. — While police in Durham recently raided several Internet sweepstakes parlors suspected of operating illegally, Raleigh’s parlors won’t get a visit from the law just yet.


City Attorney Tom McCormick has told the Raleigh City Council that he’s waiting for guidance from Wake County District Attorney Colon Willoughby. Until then, Raleigh police won’t be cracking down.


The General Assembly banned sweepstakes cafes more than three years ago, and five months have passed since the state Supreme Court upheld the ban, yet some of the parlors remain open.

Raleigh’s deputy police chief, Joseph Perry, said his officers are ready to take action once the legal issues are clarified.


Councilman Eugene Weeks said he’s eager for a solution. While the city’s statistics don’t show a high amount of crime at the sweepstakes businesses, Weeks said he thinks operators are sending problem customers to hang out across the street instead.


“They’re finding ways to circumvent everything we’re talking about in here,” said Weeks, whose Southeast Raleigh district is home to numerous parlors. Neighbors are hearing noise “all times of the night. How do we help the citizens?”

North Carolina Internet Sweepstakes Cafes Banned in 2010 but Remain Open

RALEIGH, NORTH CAROLINA – It’s been three years and five months since the state General Assembly banned internet sweepstakes cafes and five months since the state Supreme Court upheld the ban, yet some of the cafes remain open.


A Winston-Salem attorney who represents the New Jersey company that makes the software for the internet sweepstakes cafes says the businesses are not violating state law because the software has been updated.


John Morrow said the law bans internet sweepstakes games that use an “entertaining display” to entice customers to play and that the company’s new software doesn’t do that.


“The statute says you can’t use entertaining displays with actual or simulated game play,” Morrow said. “The company, VS2, created a system that has no entertaining displays.”


That argument isn’t flying with local law enforcement agencies in North Carolina, which have been enforcing the ban in fits and starts since the Supreme Court ruling.


Durham County Sheriff’s deputies raided two internet sweepstakes cafes in the northern part of the county on Thursday, and Wake County District Attorney Colon Willoughby said earlier this week that county law enforcement authorities are planning to launch an investigation into the internet sweepstakes cafes that remain open in the county.


“I have talked with the Sheriff’s Office, and we believe they are operating illegally,” Willoughby said. “I have asked the sheriff to determine if they are in violation of state law.”


The General Assembly banned internet sweepstakes cafes effective Dec. 1, 2010. The bill defined “sweepstakes” as “any game, advertising scheme or plan or other promotion” played on an electronic machine with an “entertaining display” that simulates gambling games such as poker, craps, keno or lotto and that award prizes based on chance.


After the Supreme Court upheld the law, some cafes shut down on their own, including two on South Saunders Street south of downtown Raleigh that closed on March 21. But behind those cafes, Total Rewards Sweepstakes is open 24 hours a day at 2608 S. Saunders St., while Paradise Bingo operates just yards away.


It is not clear if the machines at Total Rewards use VS2 software, but they operate much like Morrow described. A customer purchases time at a terminal from a cashier.


When a player logs in, the word “Reveal” appears in the lower right-hand corner along with the number of points allotted to the customers based on how much money they paid.

If players hit the Reveal icon, then a prompt appears asking customers if they want to play a game. If the player chooses to play, then a series of game icons appear on the computer screen with names such as “St. Paddy’s Payday,” “Frozen 7,” and “Pirate Booty.”


Depending on the game, a row of spinning numbers or icons appears, as on a slot machine. It costs 27 points, or about $1.43, for each play. At the game’s end, the player can win anywhere from 15 cents to $2.


Odds attract customers


Phillip Welch ran an internet sweepstakes cafe, “Lucky Inc.,” in Haw River until March when police arrived and handed him a letter that ordered him to cease operations immediately.


That day, Welch said, he started a new business, “Electronics Plus,” that sells and repairs computers. He thought about waiting to see if a judge would rule that his business was in compliance with state law but opted to instead protect the $25,000 to $30,000 he had spent in equipment that local authorities would have confiscated.


“I don’t have deep pockets,” he said. “It’s not the cash cow like everybody thought it was. What made it so attractive to people around here was the Internet time and the calculated odds of winning. It was so much better here than buying a lottery ticket and not winning anything. Quite a few people would enter the sweepstakes, but they get on Facebook and check their emails, too.”


Welch thinks what attracts people to internet sweepstakes cafes is small-time recreation, even though some critics describe the establishments as predatory ventures that prey on low-income people.


“It’s not like that,” he said. “Granted, there’s crime in a few places, but I’d say 80 percent or better of the people came here because it was like a community center. For people around here 50 years or older, this was their recreation to come out and socialize.”


Deputies bust stragglers


Many of Durham’s internet sweepstakes cafes closed after sheriff’s deputies shut down the H&S Internet Cafe on N.C. 98 early last month and seized 108 computers and $2,500 in cash. But at least two remained open until Thursday.


“The process of investigating sweepstakes cafes is no easy task,” Sheriff Mike Andrews said in a statement.


Deputies raided Big Pay Day Sweepstakes on Guess Road and EZ Biz Sweepstakes on 3500 North Roxboro Road and charged the owners, Erik Mac Lohela, 44, and Hoa Thi Lohela, 40, both of Chapel Hill, with “promoting, operating, or conducting a server-based electronic game promotion,” a misdemeanor.


Deputies also cited 11 customers with misdemeanor gambling and seized 70 computers and more than $7,400 in cash. Article source:

Internet Sweepstakes Cafe in North Carolina Takes Different Legal Tack

An internet sweepstakes cafe is attempting a new tack after the North Carolina Supreme Court rejected similar cafes’ arguments that sweepstakes amount to free speech rather than gambling.


Matchpoint Internet Cafe, in Lumberton, is asking courts to block Robeson County Sheriff Kenneth Sealey from enforcing North Carolina’s gambling laws against it. A sheriff’s detective warned cafe owner Debbie Barnes on April 15 that she was at risk of having her business raided and being charged with a gambling violation.


Internet sweepstakes cafe owners and state officials have been in legal skirmishes for years over whether internet sweepstakes run afoul of state gambling laws. In 2010, the General Assembly outlawed any internet sweepstakes based on an “entertaining display.” The state Supreme Court upheld that law in December of 2012, following lawsuits involving cafes in Wake County and Guilford County.

But Matchpoint’s video games have no bearing on whether or not customers wins internet sweepstakes prizes, the cafe and Barnes argue in their lawsuit. Rather, customers pay 10 cents a minute for internet time, then have the option to “reveal” their sweepstakes result and then, finally, can play an optional video game.


The lawsuit was filed in Robeson County Superior Court on April 30 and transferred to the North Carolina Business Court on Monday.


Matchpoint attorney Ron Charlot of Nelson Mullins in Raleigh declined to comment on the case. Robeson County attorney Hal Kinlaw didn’t return a call seeking comment Tuesday.


Matchpoint is not the only internet sweepstakes cafe tangling with government agencies in Lumberton. Four similar companies won a victory against the city government in March when the N.C. Supreme Court struck down a new local tax on them. Article source: