The Johnston County district attorney is giving Internet sweepstakes businesses about 45 days to shut down or face the possibility of criminal charges.
In a letter served Tuesday to more than a dozen businesses, District Attorney Susan Doyle said authorities had obtained evidence that each business was operating illegally. She added that her office would start issuing criminal charges on or after Nov. 1.
The General Assembly banned sweepstakes games that use entertaining displays in 2010, and the state Supreme Court upheld the law two years later.
However, many operators have kept their doors open, most arguing that their games use tweaked software that is legal. While multiple law enforcement agencies have criminally charged operators across the state, different court rulings have created an uncertain legal environment.
Clayton Town Manager Steve Biggs said the town has been looking for advice from state and local agencies.
“If we had clear guidance from a state authority or the district attorney that they felt the operations were in violation and subject to prosecution, obviously we would follow suit,” Biggs said recently.
In an interview Wednesday, Doyle said a district attorney’s office investigator and a sheriff’s deputy served letters on 14 sweepstakes businesses and that she intends to serve every business in the county.
Doyle said she worked with local law enforcement agencies before preparing the letter, similar to other letters served by prosecutors across the state.
“A lot of counties are doing something similar, so we wanted to be consistent,” Doyle said.
Most sweepstakes businesses were open Wednesday, but Craig Johnston, who works at the M&M Cyber Center in Clayton, said the store planned to close before Nov. 1.
Tony Ro, who is planning a new sweepstakes business off of U.S. 70 Business, said he, too, will respect the prosecutor’s stance.
“We are going to fully cooperate with what Johnston County wants,” said Ro, who was seeking a special-use permit from the Town of Clayton.
The Clayton Town Council tabled its vote on Ro’s permit last month, and councilmen said they were waiting for more information.
Clayton councilman Butch Lawter said technically, the district attorney’s letter won’t affect how the council considers Ro’s request.
“Our decision is based solely on our zoning ordinance,” Lawter said. “The legality of the business is not something we decide.”
Many sweepstakes parlors have changed to using to “pre-reveal” software, which owners say reveals prizes before a person plays a game. North Carolina courts have offered different rulings on sweepstakes parlors that use “pre-reveal,” which Attorney General Roy Cooper has called a “made-up word” that state statutes have not defined.
Other parlors are using “game-of-skill” systems, where a player has to complete a task, often a simple one, to redeem their prize. Software manufacturers and owners have said that “game-of-skill” systems circumvent the state ban, which disallows games of chance.
“There is definitely a lack of clarity of whether the new games comply with the statute or violate the statute,” said Jeff Welty, an associate professor of public law and government at the University of North Carolina-Chapel Hill.
Welty said that ambiguity has led to varying types of law enforcement across the state. In some areas, district attorneys have teamed with law enforcement agencies actively to pursue and charge operators. In other areas, agencies have been more lenient, as sheriffs and police chiefs believe the new games are lawful.
Doyle, the Johnston district attorney, said her office has worked with state and federal agencies on several sweepstakes investigations. She said the endurance of those cases is one reason her office has not been able to take a public stance until now.
“As of Nov. 1, if they are continuing to violate the law, we are going to pursue charges,” Doyle said. “Anytime you have charges with those establishments, that puts them at risk of having machines seized and money seized.”