Legal Or Not? Gaming machine laws are vague

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By Landmark News Service

As local authorities deal with the sometimes vague laws involving Internet sweepstakes cafes, police in other Virginia localities have taken more definitive action.
And in North Carolina, authorities are dealing with the often confusing repercussions of a state ban on certain types of gaming machines.
Earlier this month, a special grand jury in Virginia Beach indicted the owners or operators of 10 Internet sweepstakes cafes on criminal charges of illegal gambling.
The defendants face indictments as the result of an investigation that culminated with police raids of the businesses in September.
The indictments appear to be the largest action in Virginia against sweepstakes businesses that have been popping up around the state.
"The grand jury determined that there was probable cause to believe that what was going on was in violation of the gambling statute," Virginia Beach Commonwealth's Attorney Harvey Bryant said.
Sweepstakes cafes occupy a murky area of state law. Some commonwealth's attorneys, such as Bryant, have said they're illegal, and some have said they're not.
The owners say they don't meet the legal definition of gambling.
What does meet that definition in Virginia isn't exactly clear. For example, Virginia Attorney General Ken Cuccinelli has issued two advisory opinions based on different hypothetical business situations and reached different conclusions.
Each operation needs to be "considered on a case-by-case basis," Cuccinelli wrote in an Oct. 15 opinion.
The General Assembly will likely take on the issue in the upcoming session.
"The whole thing is unclear and fraught with arguments on both sides, and until the General Assembly defines what is and what is not allowed, it will be very, very difficult to successfully prosecute these cases," said Suffolk Commonwealth's Attorney Phil Ferguson, who wasn't specifically reacting to the Beach indictments. Ferguson said he thinks the games are legal.
"My general rule is it's legal unless I can determine from the statute that it's illegal," he said.
Authorities will be notifying those who have been indicted and asking them to turn themselves in, Bryant said.
Some owners said they plan to fight the charges.
"A major injustice has been done against my rights," said Daniel Storie, who owns four cafes in Virginia Beach. "We have not stopped fighting since day one, and we plan on fighting the whole way."
"We knew this was coming," said Doug Harris, co-owner of another cafe. He called the indictments a "prelude to their filing for forfeiture for all our stuff."
Police seized about 500 computers from the 11 businesses raided in September.

North Carolina has banned several of the games that mimic gambling, and the state's experiences with the new law offer some insight into what Virginia can expect, should the General Assembly impose a similar ban.
Businesses still operating legally offer a mix of games that are less Las Vegas than Looney Toons. Duck hunting and penguin bowling had replaced slots and Pot-o-Gold.
“The games we have now really aren’t as entertaining. ... Some of the customers are saying they are boring,” said Desiray McLaurin, the manager at Summit Internet Services in Greensboro.
McLaurin said she expects to lose customers who would spend six hours a day in her store. Some customers already have threatened to take their business to illegal gaming parlors they know of that will still provide the newly banned games, she said.
In Rockingham County, John Flippen had a hard time finding even the modified games. He plays once or twice a month and doesn’t understand why the state had a problem with it.
“It’s just games,” he said. “It’s something to spend your time doing. You don’t win a whole lot, but it’s something to do.”
Just as owners and customers were confused, law enforcement officials in Guilford and Rockingham counties and across the state await guidance from N.C. Attorney General Roy Cooper.
“We’re in a difficult spot,” said Rockingham County District Attorney Phil Berger Jr. He has advised police officers and sheriff’s deputies in his jurisdiction to hold off enforcing the new ban themselves.
“I think the law is pretty clear as set forth in the statute, but the enforcement mechanism is unclear given what’s gone on in court,” Berger said.
The ban’s history stretches back to 2006, when the N.C. General Assembly voted to outlaw stand-alone video poker machines. That ban took full effect in July 2007 and almost immediately sweepstakes-based systems that mimicked casino games started popping up throughout the state.
Unlike their stand-alone ancestors, the sweepstakes terminals connect to a remote server and don’t rely on any decisions players make to determine the outcome. Rather, game makers have said in court that players are simply revealing the outcome of a sweepstakes in an entertaining way.
After court rulings allowed sweepstakes to keep operating following a 2008 tweak to the video poker law, the industry mushroomed. While some operators emphasized that games were meant only as promotions for copier shops or selling phone time, other businesses emphasized the gambling-like aspect of the games.
This summer, the N.C. General Assembly crafted a new broader ban, which has faced two court challenges so far. A Wake County judge upheld the entire law last month, while a Guilford County judge ruled that one sentence is too broad and infringes on free speech.
That Guilford County ruling opened the door for what is being described as arcade-style games. Whether the new games are legal may depend on whether the Guilford County or Wake County rulings are upheld during expected appeals.
Further complicating matters, Berger said, is the fact that judges in Guilford and Wake counties had issued restraining orders protecting certain kinds of machines during the two years of litigation. Although both judges have dissolved those restraining orders, official word has not reached district attorneys and sheriffs.
Meanwhile, at least two companies — Hest Technologies of Texas and Internet Sweepstakes Network with Ohio and North Carolina ties — were marketing games they said evaded the ban, even as it went into effect.
Retailers and game makers warned that some people could lose their jobs, at least temporarily, as a result of the ban.
That seemed to be the case at Pots O’ Gold on High Point Road, whose logo boasts of slot machine games. A hand-written note at the business said that it would reopen soon.
The waving “leprechaun,” who occasionally stood on the sidewalk in front of the business to attract customers, was nowhere to be found.