Senate lowers boom on sweepstakes

A bill banning the $2 billion a year parlors now goes to the House.

Staff writerJune 22, 2010 

The Senate resoundingly rejected the argument that sweepstakes parlors are a harmless cash cow for the state, voting Monday night in favor of a ban on the industry.

The Senate voted 47-1 in favor of the bill, which now heads to the House where the debate on the parlors - cash cows or dens of sin - will continue. The sweepstakes industry, which estimates its annual sales at $2 billion, has vowed to continue the fight in legislative committee rooms and in the courthouse. The industry wants to be regulated and taxed, not prohibited, and estimates it could raise nearly $500 million a year.

In the Senate, those who supported the bill said they were trying to protect the state's poor and vulnerable from the machines. Supporters of the bill say there is no real difference between the sweepstakes machines and video poker, which the legislature banned in 2006.

"They represent gambling on a massive commercialized scale," said Sen. Josh Stein, a Raleigh Democrat who pushed the bill.

Sweepstakes games mimic the look and feel of the poker machines or video slots. The key difference: The games are technically a marketing prize awarded to customers who are actually paying for Internet time, phone cards or movie rentals. The outcome of all of those spins of the slots or hands of poker are predetermined in the same way as fast food restaurant game pieces or sweepstakes entries found under soda caps.

The legislature tried to ban the sweepstakes games in 2007, but court rulings have allowed the parlors to continue to operate. There are more than 900 in the state that employ 10,000 people, according to Brad Crone, a consultant for an industry association. Annual sales are approaching $2 billion, and supporters say the operators are satisfying public demand.

"The customers are dictating what's going on now, not anyone else," said Chase Brooks, who owns "quite a few" parlors in the state including several in Raleigh. Brooks said the government has no business telling people how to spend their time and money.

Brooks owns the sweepstakes room behind a Starbucks on Capital Boulevard in Raleigh. On Monday afternoon, eight people sat in front of computer screens, clicking away at the card games, slot wheels and lotto-style drawings.

Playing for fun

"I don't come in here to try to make a living. I have a job," said Malissa Vanderver, 29, a customer service representative for a cell phone company. "This is a fun-filled way to go out. If you don't go to bars, there aren't a lot of options."

Vanderver said she spends about $30 a week on the games and can get two hours of play time for $10 or $15. She said she isn't trying to win big, but is paying for entertainment.

"You see them in jeans, and you see them in a suit and tie," Taz Zarka said of the customers who play the games in his store on South Wilmington Street, a few minutes walk from the legislature. "They all come down to spend half an hour, and then they go back to work."

Zarka also sells lottery tickets in his store. He has customers who routinely drop $100 on lottery tickets. "Don't you want to call that an addiction?" he said. "There's more people in the United States addicted to sugar, and they have diabetes."

On the Senate floor, the talk was of poor people squandering the utility bill money on gambling. Even a small city such as Hendersonville has 12 parlors.

"This is just a scourge," said Sen. Tom Apodaca, a Hendersonville Republican.

Politically, only a few lawmakers in either chamber appear willing to vote against the ban. Sen. Julia Boseman, a Wilmington Democrat, voted against it Monday because she supports legalizing the games and placing them under the wing of the lottery.

In the House, the Democrats who control the chamber have not come to an agreement in their closed-door caucus meetings on how to handle the issue.

House Speaker Joe Hackney, an Orange County Democrat, supports the ban and said only a few members in the chamber support regulating and taxing the machines.

The bill specifically targets only the sweepstakes machines. Other marketing sweepstakes games would still be legal.

ben.niolet@newsobserver.com or 919-829-4521

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