So-called Internet cafes have long been regarded as little more than thinly veiled gambling sites by law enforcement and prosecutors. The General Assembly banned video poker and other games in 2006, but the industry has fought hard in court and “adjusted” the games to slip under the legal radar for years. The ongoing battle and the maneuvering by the industry have been a sort of perfect storm of lobbyists rallying for a special interest group, lawyers for that special interest finding ways to follow the technicalities of the law while sidestepping its spirit, law enforcement beating its head against the wall trying to stop a practice it knows is bad for communities, and lawmakers trying to do the right thing to protect individuals and families.
But now, following the state Supreme Court’s decision not to take up appeals in two cases pertaining to electronic gaming, federal prosecutors, namely U.S. Attorney Thomas Walker, made an agreement with five software providers in the industry. They will cease operations in North Carolina by July 1, and Walker won’t pursue criminal charges against them.
The industry has spent a bundle to make a bundle, lobbying lawmakers heavily for a decade or more to preserve a multimillion-dollar enterprise that has taken many forms. Law enforcement long has viewed these Internet cafes as little more than providers of gambling games that offer “prizes” in exchange for playing time bought on machines or sweepstakes chances. But law officers always have believed the games are a way around the state’s gambling laws.
Walker’s deal is a good one. Gambling brings a host of problems, particularly for the families of gambling addicts who easily can lose all they have with a problem beyond their control.
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One man connected to the industry donated over $230,000 to North Carolina politicians in 2012, including now-Gov. Pat McCrory, then-House Speaker Thom Tillis (now a U.S. senator) and state Sen. Phil Berger, the Republican president pro tem and the state’s most powerful lawmaker. All three later donated those political contributions to charities and denied they knew Chase Burns, an official with a video sweepstakes operation who made the contributions. In 2013, Burns pleaded no contest in Florida to counts of assisting in the operation of a lottery. He forfeited $3.5 million from bank accounts seized during the investigation.
The companies that support the varying forms of video poker, sweepstakes, etc., (there have been many names) will continue their fight for legality, of course. Despite Walker’s deal, North Carolina surely hasn’t heard the last of an industry that doesn’t have “no” in its vocabulary.
The N.C. Board of Elections has been investigating contributions from the industry to politicians for months and months, but no action appears imminent. The board, now run by Republicans, has no logical explanation for the excruciatingly long delay.
As for the current deal, some officials are optimistic. Said Mark Senter, head of a branch of N.C. Alcohol Law Enforcement, “Sweepstakes machines have been a source of problems for local law enforcement and the community for years. It is our hope this action eliminates this illegal activity.”
Gambling by any other name still is gambling, and the companies that profit from it, in many cases getting that profit from people who can ill afford to provide it, know well the power of the lure. Walker has done a good job here. But that job isn’t likely finished. The industry’s hot streak might have gone cold for now, but it will try to get a seat at the table again soon enough. State officials must remain vigilant.