North Carolina Sweepstakes Cases Cite Brown v. EMA

October 26, 2011 -

Yesterday we mentioned that the North Carolina Appeals Court would hear oral arguments about two different cases related to video-style sweepstakes games in the state. Today we know a bit more about what each side argued yesterday before the three-judge panel hearing both cases. The cases relate to an Internet sweepstakes ban that took effect last December and followed an earlier state ban on traditional video poker machines.

Acting Solicitor General John Maddrey gave arguments Tuesday in both cases before a three-judge panel of the Court of Appeals. In one case, the state asked the court to uphold a Wake County judge's ruling backing the entire law, and in the other case, it asked the judges to reverse a Guilford County judge's ruling striking down part of the law as a violation of the First Amendment.

"It's not a video-game regulation statute standing alone. It's a sweepstakes statute, a statute that defines types of sweepstakes that are not permitted or allowed," Maddrey said.

Lawyers representing business owners argued that Internet sweepstakes are legal based on a ruling that came after these two rulings came down. The case they are referring to is Brown v. the Entertainment Merchants Association.

"In that case, the U.S. Supreme Court said video games qualify for First Amendment protection, that video games are a form of speech," said Kelly Daughtry, a lawyer representing Sandhills Amusements, which was involved in the Wake County lawsuit.

Adam Charnes, an attorney for Hest Technologies and International Internet Technologies, argued that allowing people to click on computer screens to uncover potential prizes is simply a marketing tactic to encourage customers to buy Internet or phone time. The two companies market long-distance phone and Internet services sold at outlets across the state. These companies were involved in the Guilford County lawsuit.

While these two cases are sorted out by the Appeals Court, Prosecutors statewide have told police and sheriff's deputies to enforce only parts of the law that were upheld by both trial judges and to close down casino-style games and those "not dependent on the skill or dexterity of the player." Other sweepstakes outlets or retailers have continued to operate by getting rid of slots and Pot-o-Gold machines with cartoon-style games.

Source: WRAL

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