Midtown Raleigh News

Raleigh councilman wants to limit sweepstakes parlors

The city should join other Triangle communities in limiting where sweepstakes shops can operate, says Councilman Eugene Weeks, who took up the issue after a string of new parlors opened in his Southeast Raleigh district.

“What can we do in the city to make sure we can control it?” said Weeks, who called for a policy to keep the so-called “gaming lite” businesses away from churches, schools and neighborhoods.

Weeks said he counted five new shops in a one-mile stretch of Rock Quarry Road, a major thoroughfare in Southeast Raleigh. The city should consider imposing rules similar to those for nightclubs, which are barred from operating in certain areas, Weeks said.

Internet sweepstakes parlors allow patrons to win and lose money playing virtual slot machines. Thirty shops now dot the city, with several in busy shopping areas such as Glenwood Avenue and Avent Ferry Road, city records show.

The machines have long been a point of contention across the state, and the legislature banned them in 2010. The N.C. Court of Appeals later struck down the law, making the parlors legal – and difficult for local communities to ban.

The N.C. Supreme Court could reverse the decision after oral arguments take place this fall. For now, governments are preparing for an influx.

Raleigh charges special tax rates

Parlors must pay hefty fees to operate in Raleigh. Since 2010, the city’s privilege license tax on an Internet sweepstakes business is $3,500 for the first machine and $1,000 for each additional machine, up to a maximum tax of $20,000 per business.

Most shops have 20 to 30 machines. But players can find 100 machines at Raleigh’s largest parlor, the Paradise Bingo Business Center on South Saunders Street, south of downtown.

By comparison, the city charges $50 for a dry cleaners and $100 for a loan agency or check-cashing store as part of its business license requirements.

The shops are able to host legal gambling because patrons aren’t actually playing a game of chance. Instead they are entering themselves into a sweepstakes with each pull of the virtual lever.

The town of Cary is considering a policy that would allow parlors to operate in most of the town’s general commercial districts. A sweepstakes business couldn’t operate within 500 feet of other gaming operations or residences, religious assemblies, day cares or schools.

Shops, stores and restaurants would be allowed to have no more than four of the machines.

Weeks will have to convince Councilman Bonner Gaylord, general manager of the North Hills shopping center.

“I generally feel like businesses should be free and unregulated to the point that they don’t harm others,” Gaylord said. “I am unaware of the sweepstakes businesses and how they may harm a community, but I look forward to learning about that.”

Staff writer Andy Kenney contributed to this story.