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Gaming Machines Seized: Businesses Say Despite Payouts, Games Aren't Illegal Gambling

Posted on: Friday, 3 March 2006, 06:00 CST

By Andrew Shain and Deborah Hirsch, The Charlotte Observer, N.C.

Mar. 3--FORT MILL, S.C. -- S.C. authorities seized 464 gaming machines and computers Thursday from 13 York County businesses accused of hosting illegal gambling just over the N.C. state line.

Drawing attention were an increasing number of "Internet cafes" where customers played video slots with prepaid cards. Business owners defended them as legal sweepstakes. Authorities, however, said the cafes, which pay out money to winners, are thinly veiled attempts to get around state gambling laws.

The burgeoning cafes appeared poised to become another wave of gaming similar to video-poker parlors that sprouted in border towns in the 1990s, authorities said.

Video poker took off in 1991 after the state Supreme Court said payouts were legal. Lawmakers banned payouts in 2000.

"As time goes on we can foresee the problem growing greater and greater as it did in 2000 when people were losing their cars and their homes," York County Sheriff Bruce Bryant said. "It's obvious that we're headed back in that direction. We want to sort of nip it before it gets out of hand."

Business owners said their games, which are growing nationwide, were no different than sweepstakes offered at fast-food restaurants or Internet gambling available on home computers.

"Judges and lawyers can play games like this at their office," said Doug McManus, owner of Big Daddy's Fireworks on U.S. 21 near Carowinds, which had a cafe for nearly a year. "These are penny games here. It's more for fun than anything else."

No arrests; fines possible

Of the 464 machines taken, 395 were tied to Internet games. Authorities also collected $34,000 from the businesses.Officials did not announce any arrests Thursday. Business owners could face fines of $500 per machine or up to a year in prison, 16th Circuit Solicitor Tommy Pope said. Authorities cited the state's two anti-gambling laws in seizing the machines, said Marvin Brown, who heads a York County law-enforcement unit that conducted the raid with the State Law Enforcement Division.

At least seven cafes within a couple of miles of the Carowinds theme park were raided along with three in Rock Hill. Some cafes had been open for nearly a year, but several others had opened in the past month.

The cafes were attached to fireworks stores and occupied old video-poker parlors and nightclubs. One shopping center at U.S. 21 and S.C. 51 had three cafes.

Long counters lined with flat-panel monitors and padded office chairs filled the dark, often smoky Fort Mill cafes. Keyboards usually were stored under counters because players didn't need them for the games. Employees offered free soft drinks and snacks to players engrossed in their screens.

Cafe customers got cards for prepaid time to surf the Web, but the computers were preset to play video-slot games. After spending a free $1.60 already on the cards, players could add money to keep playing the Internet games. Then players could take their cards to cashiers and take home their winnings.

'This is a gray area'

Steve Miller, owner of a convenience store on S.C. 51, said he brought in 20 computers for Internet games two weeks ago because he expects to lose much of his S.C. state lottery ticket business soon. North Carolina is scheduled to start a state lottery in four weeks. Miller was in the midst of building a room for 15 more computers, which he said he thought were legal, when sheriff's deputies raided his store.

"They haven't told me what's wrong with the machines," Miller said, watching two sheriff's deputies tag his computers for inventory. "This is a gray area. You can sit at these computers and go on the Internet. You could check your e-mail or play sweepstakes."

Authorities also carted off other gaming machines. Business owners said they didn't understand why machines that played slotlike video games and sold sweepstakes cards were taken because many had been in place for more than five years. Three businesses raided Thursday only had gaming machines.

Pope said the owners should not think the machines are legal just because no one ever questioned them. "It's the same definition of gambling we've always had," he said. "It all starts with payoffs, you're giving something to get something."

A growing issue nationwide

Gambling has become a large enough issue that the S.C. attorney general has asked for a gambling prosecutor in his latest budget request, spokesman Trey Walker said. "There is a tremendous amount of money to be made in running these," he said. "People engaged in this are willing to push the line as far as this goes."

Internet sweepstakes cafes have made the biggest inroads in Alabama, where a state court ruled them legal after a series of raids. Internet cafes with sweepstakes games are also in Massachusetts, Texas and Florida, said Karl Maahs, operations manager for Game Systems, a Texas company that sells the cafe computers.

After a series of cafe raids last year, an S.C. state court denied a move by cafe operators to halt further seizures. S.C. cafe operators are awaiting the first criminal case to reach trial to determine whether their sweepstakes are legal, said Jim Griffin, a Columbia attorney representing Game Systems.

Staff reporter Peter St. Onge contributed

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Copyright (c) 2006, The Charlotte Observer, N.C.

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Source: The Charlotte Observer (Charlotte, N.C.)

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