Cover Story: Video gambling debate

By Jeff Atkinson - bio l email

CHARLOTTE, NC (WBTV) - In the midst of North Carolina's biggest fiscal crunch in history there's a half-billion dollar cash cow sitting across the computer screen.

But before lawmakers can tax it someone has to decide whether so-called "sweepstakes cafes" are legal or not.

They operate in relative obscurity across North Carolina, stores with dozens of computer terminals with screens that light up with slot-machine-type video games.

Customers pay to play and sometimes they get paid.

If you think it sounds a lot like video poker, which the state outlawed.. you're right on both accounts.

It's like trying to kill a vampire one official told us.  You can't get a stake in its heart.

Three years after North Carolina outlawed video poker the games are still here, unregulated and law enforcement's hands seems to be tied.

Say video poker and this is what comes to mind.  Law enforcement confiscating old worn out machines - hauling them away.

Meet the newest version of video poker.  Though the name's changed (they now call them sweepstakes cafes) the aim's the same.

"This place has got some excitement in it. It's fun," said one player.

"We definitely have nothing to hide here. We welcome everyone that's going to come out and play," said Precious Batts a sweepstakes cafe manager in Wilson, NC.

How are they able to operate?  A year ago, a judge in Wake county threw out the state's ban on video poker.  He ruled North Carolina must allow the machines because it allows the Cherokee Indians to run the games and operate casinos on their reservation in western North Carolina.

While the case is being appealed more stores keep popping up.

"As I understand it.. it's still the same old game. It's just dressed up in a different dress."  Mecklenburg sheriff Chipp Bailey and other sheriffs in the North Carolina Sheriff's Association have taken the strong stance to have the games outlawed period.. believing they leads to a host of crime problems.

Over the years we've reported on husbands gambling away their entire paychecks.  And mothers leaving their babies out in hot cars while they gambled.

Meanwhile, law enforcement in many cases sits by not sure what law to enforce.  It can be frustrating.  Quipps Sheriff Bailey, "Why not put casinos up and down Wilkinson or Independence Boulevard and we'll just have us a little Las Vegas?"

He's joking of course but the frustration's reached the General Assembly where some lawmakers are saying if they can't stop it at least let's tax it.

"If it is going to be continued in the state we need to get our share of the revenue from it," said state Sen. David Hoyle, a Democrat from Gaston county.

Some states have taxed it and put it under the lottery's authority.

In West Virginia, which has regulated video terminals for years, they account for 88 percent of the nearly one and a half billion dollars that state's lottery takes in every year.

North Carolina Lottery officials estimate video poker here could bring as much as $576 million in tax revenue within four years.

Said Sen. Hoyle, "I think that we've got to have an open honest debate about the legality of the issue."

But that's probably not going to happen this year.  The legislature, which began this week, is in the short session and leaders say they're not going to tackle anything controversial.

Lawmakers hope to have their work wrapped up by the first of July.  It's an election year and they have to go home to campaign.

Can they close the loophole?  They might, they're still waiting for the courts to rule on the initial law but since these sweepstakes cafes are tied into the internet there's debate on whether the state can regulate that or not.

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