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HIGH POINT — Two companies have sued to stop the state from pressing criminal charges against businesses that host a certain kind of video slot machine connected with a phone-card marketing system.

The law enforcement community can't seem to agree on whether video slot machines are legal or not. What do you think? Join the discussion at the Debatables blog.

Hest Technologies and International Internet Technologies have asked a Guilford County Superior Court judge, John O. Craig, to declare their systems legal.


The machines, which appear to allow players to play a variety of slot-machine-style games, are frequently found in bars and convenience stores. Agents with the state Alcohol Law Enforcement Division have charged operators in Guilford, Rockingham, Alamance and Davidson counties over the past year.


ALE is the law enforcement arm responsible for enforcing the state's anti-gambling laws, along with those that concern liquor and tobacco sales and sales of lottery tickets.


Craig has issued a temporary restraining order that keeps the state from making more arrests. A hearing is scheduled in High Point today that could extend that moratorium.


Under the system in question, players purchase a phone card that can be loaded with as little as $1 worth of long-distance calling time.


That card also allows the player to access a terminal that is in many cases nothing more than a desktop computer.


Although it looks as if someone is playing a video-slot machine, the manufacturers argue they are entering a sweepstakes. The computers, they say, are connected via the Internet to a server that conducts a sweepstakes drawing. The slot game is only a visual representation of the outcome of that drawing, they say.


"There is a visual representation on our computer of a game of chance, and the state contends that makes it illegal under the statute," said Michael Grace, a lawyer for Internet International. "We think they're absolutely wrong."


Lawyers for the state have yet to file a response in the suit. But a spokeswoman for Attorney General Roy Cooper confirmed that ALE agents were temporarily prohibited from enforcing the law.


In August 2007, Assistant Attorney General David Adinolfi issued a letter to the Davidson County Sheriff's Office saying that the video slot operation appeared to violate state anti-gambling laws.


The temporary restraining order keeps the state from saying that the machines are illegal, although ALE agents interviewed last month said that they appeared to violate the law.


In 2005, North Carolina lawmakers created a state lottery. About the same time, they outlawed video poker, a form of gambling that was popular in bars and restaurants. On July 1, 2007, video poker became illegal in the state, joining most other forms of gambling.


About that time, retailers and law enforcement agents say, the new sweepstakes slot machines began showing up in large numbers, although they have existed in other states for years.


Some district attorneys, such as Phil Berger Jr. of Rockingham, have brought charges against stores that make the video slots available. Others, such as Doug Henderson of Guilford County, have dropped cases against such stores.

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