N.C. Senate rejects sweepstakes parlors

RALEIGH The Senate resoundingly rejected the argument that sweepstakes parlors are a harmless cash generator for the state, voting Monday night to ban the industry.

The Senate voted 47-1 in favor of the ban bill, which now heads to the N.C. House where the debate on the parlors - cash cows or dens of sin - will continue.

The sweepstakes industry, which estimates its annual sales at $2 billion, has vowed to continue the fight in legislative committee rooms and in court. The industry wants to be regulated and taxed, not prohibited, and its backers estimate it could raise nearly $500 million in taxes yearly.

In the Senate, Democrats who pushed the ban bill said they were trying to protect the state's poor and vulnerable from the addictive machines. Supporters of a ban say there is no real difference between the sweepstakes machines and video poker, which the state banned in 2006.

"They represent gambling on a massive commercialized scale," said Sen. Josh Stein, a Raleigh Democrat, who pushed the ban bill.

Sweepstakes games mimic the look and feel of poker machines and video slots. The key difference: The games are technically a "marketing prize" awarded to customers who are actually paying for Internet time, phone cards or movie rentals. The outcome of all of those spins of the slots or hands of poker is predetermined in the same way as fast-food restaurant game pieces or sweepstakes entries under bottle caps.

The legislature tried to ban the sweepstakes games in 2007, but court rulings have allowed the parlors to continue operation. There are 932 parlors in the state, which employ 10,000 people, according to Brad Crone, a consultant for an industry association. Annual sales are approaching $2 billion a year - a sign, supporters say, that the operators are satisfying public demand.

Monday in Charlotte, Charles Forte, 55, won $30 at the Brookshire Business Center, a sweepstakes parlor on Brookshire Boulevard.

Dozens of cars were parked at the stand-alone building Monday afternoon. A security guard unlocked the door for customers to enter and leave. The main room was filled with 30 computers, and customers sat in groups or by themselves in front of colorful screens.

"It's a nice place to occupy your time," Forte said. "No one is doing anything wrong. They should open one downtown. People need things to do."

Forte said he used to travel to South Carolina to play before sweepstakes locations began opening in Charlotte. Forte, who is unemployed, figures he's probably made about as much money as he's lost.

He disagrees with criticism that the sites exploit people in poorer communities. He said no one forces him to play, and asked what the difference was between sweepstakes gambling and people buying state lottery tickets at the gas station across the street.

In Raleigh, Chase Brooks owns several parlors. He said the government has no business telling people how to spend their time and money.

Monday afternoon at his sweepstakes room on Capitol Boulevard, about eight people sat in front of computer screens, clicking away at the card games, slot wheels and lotto-style drawings.

"I don't come in here to try to make a living. I have a job," said Malissa Vanderver, 29, a customer service representative for a cell phone company. "This is a fun-filled way to go out. If you don't go to bars, there aren't a lot of options."

Vanderver said she spends about $30 a week on the games and can get two hours of play time for $10 or $15. She said she isn't trying to win big, but is paying for entertainment.

On the Senate floor, the talk was of poor people squandering the utility bill money on gambling. Even a small city such as Hendersonville has 12 parlors.

"This is just a scourge," said Sen. Tom Apodaca, a Hendersonville Republican.

Only a few lawmakers in either chamber appear willing to vote against the ban. Sen. Julia Boseman, a Wilmington Democrat, voted against it Monday because she supports legalizing the games and placing them under the wing of the state lottery.

In the House, the Democrats who control the chamber have not yet come to an agreement on how to handle the issue.

House Speaker Joe Hackney, an Orange County Democrat, supports the ban and said only a few members in the chamber support regulating and taxing the machines.

The bill targets only the sweepstakes machines. Other marketing sweepstakes games would still be legal.

Originally in the Charlotte Observer