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Judge: No Protection for Internet Gaming

Posted on: Thursday, 27 October 2005, 21:00 CDT

By Clif LeBlanc, The State, Columbia, S.C.

Oct. 27--State police and prosecutors this month won an early round in the latest video gambling fight: prepaid Internet games.

Greenville Circuit Court Judge Edward Miller rejected Texas-based Game Systems' request to block police from seizing computers used to play Internet games. He issued his decision Oct. 17.

The games, which police call illegal gambling, are being played in at least eight S.C. counties, including Richland, and in eight states, said Jim Griffin, a lawyer for the company.

The request for a judge's order blocking seizure of the computers represents a new battle plan by the gaming industry, lawyers for the state say.

Miller was asked to intercede after an undercover State Law Enforcement Division agent bought a $40 phone card at the Internet Cafe in Simpsonville. The card allowed him to select from 15 games played on 20 computers in the business.

A typical "Internet cafe" allows customers to pay to send e-mails or surf the Internet. However, investigators say some businesses set up computers for Internet video gambling only.

Players can select from computers that offer penny, nickel or quarter games, investigators said. The cards grant play credits -- just as video poker machines once did. Winners cash in credits for money or its equivalent value in credit cards.

Griffin, Game Systems' attorney, said his client turned to Miller for an injunction because prosecutors in similar cases were delaying hearings on the legality of the games.

Griffin said the games are legal, no different from promotions such as a Monopoly game at McDonald's or a lotto at Piggly Wiggly. Players can win cash there, he said.

"Sweepstakes schemes that promote the sale of a product through the chance to win a prize are legal," Griffin wrote in court documents.

The attorney general's office, which is representing SLED, disagreed.

State lawyers point to S.C. Supreme Court rulings that upheld promotions, such as the McDonald's Monopoly game, because their primary purpose is to sell a legal product.

"Plaintiffs' 'promotion' is nothing more than a smoke screen for gambling," Assistant Attorney General Robert Cook wrote in court documents in the Simpsonville case.

"What the customer is, in reality, buying is the opportunity to play online Las Vegas-style gambling ... ," Cook wrote.

He warned the judge that a court order stopping police from seizing the computers would set a "terrible precedent."

Seizure of suspected machines is the state's primary method of enforcing laws prohibiting unauthorized gambling.

"If an injunction is issued here ... video poker and other such high-stakes gambling will return to this state even greater than before," Cook wrote.

SLED Chief Robert Stewart said police have seized 121 computers in five counties since April 15. Cases also are being investigated in other counties he would not identify.

The case will continue Monday in Greenville, when the state will ask another circuit court judge, D. Garrison Hill, to throw Game Systems' case out of court altogether.

The attorney general's office will argue the company's attempt to get an injunction would have allowed the gaming industry to leapfrog the jurisdiction of magistrates. State law requires magistrates, not circuit court judges, to make initial rulings on the legality of gaming machines.

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Copyright (c) 2005, The State, Columbia, S.C.

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Source: The State (Columbia, S.C.)

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