news-record.com

RALEIGH — A kind of video gambling sweeping the state would be outlawed under a bill that passed the Senate 47-1 Monday night.

The measure targets Internet sweepstakes games that have popped up in gas stations, bars and stand-alone shops throughout the state.

“There are communities that are experiencing real problems with this,” said Sen. Phil Berger, an Eden Republican who voted for the bill.

The lone “no” vote came from Sen. Julia Boseman, who said that she didn’t oppose the ban itself. But the Wilmington Democrat said she had introduced her own legislation that would have brought the games under the control of the Lottery Commission and taxed them.

“I think it’s an opportunity ... that we could bring in additional revenue to the state,” Boseman said.

Boseman’s remarks echo sentiments put forward by the sweepstakes industry itself, which has poured on a massive lobbying and public relations effort during the past couple of weeks. Lawmakers report getting hundreds of e-mails from people on both sides of the issue. “There is more than $500 million on the table in new revenue if the legislature would only regulate and tax it,” said William Thevaos, president of the Entertainment Group of North Carolina, a trade group for the industry.

The promise of extra revenue could be tempting as lawmakers are struggling to find money to pay for schools and human services, but lawmakers have moved in the opposite direction during the past five years.

The General Assembly voted in 2006 to do away with stand-alone video-poker machines. That law took full effect in July 2007. Internet sweepstakes machines started filtering into the state soon afterward.

Under the sweepstakes system, players buy phone or Internet time and are given entries into a sweepstakes. The outcome, according to operators, is predetermined and players are merely revealing their sweepstakes entries in an entertaining way.

In 2008, the General Assembly enacted a second video poker ban, this one aimed specifically at sweepstakes. But operators quickly changed how their games were programmed and played and the practice continued.

Backers of the Senate bill say it will stamp out the legal gray area in which video sweepstakes have been operating.

Many outlets hand players disclaimers telling them they’re not gambling, but lawmakers pushing the ban disagree. They say the machines have the look and feel of casino-style games and are luring those who can least afford to play.

“They represent gambling on a massive, commercialized scale,” said Sen. Josh Stein, a Raleigh Democrat and the bill’s lead sponsor.

Estimates cited during the past week have put the number of video sweepstakes locations between 600 and 1,000.

Many businesses use various types of sweepstakes to promote their businesses, including fast food restaurants and grocery stores. Fears that a video sweepstakes ban would outlaw what lawmakers describe as “legitimate sweepstakes” led to the legal language that created the original loophole and has delayed consideration of this year’s ban legislation.

Those concerns appear to be fading. “We think it has successfully left alone the legitimate sweepstakes that retailers and soda bottlers have used for years,” said Andy Ellen, a lobbyist for the N.C. Retail Merchants Association.

The bill targets sweepstakes machines rather than sweepstakes themselves, saying that it shall be unlawful to “conduct a sweepstakes through the use of an entertaining display.”

The bill now goes to the House, where Speaker Joe Hackney says he personally backs the measure. It will likely get a hearing in one committee before making it to the floor.

Contact Mark Binker at (919) 832-5549 or mark.binker@news-record.com