Some local sweepstakes businesses may have an opportunity to re-open under a court ruling that temporarily restrains law enforcement officers from closing certain businesses.
The temporary restraining order was signed Monday by Superior Court Judge Robert Johnson in Davidson County, N.C.
The state Supreme Court ruled on Dec. 14 that the 2010 law that outlaws video sweepstakes, called N.C. General Statute 14-306.4, is constitutional and therefore can be enforced by law enforcement officers.
The temporary restraining order comes after Davidson County Sheriff’s deputies charged a business owner with a violation of N.C. General Statute 14-306.4. The court said that those charges have been dismissed.
Hickory Tree Business Center, the business that was charged, and International Internet Technologies (IIT), LLC filed the complaint against North Carolina Governor Pat McCrory, Secretary of Crime Control and Public Safety Kiernan Shanahan and Davidson County Sheriff David Grice.
IIT is a software company based out of Oklahoma that designs sweepstakes software and is represented by Grace, Tisdale and Clifton, P.A., a firm that specializes in criminal defense and civil litigation.
According to Michael Grace, attorney for IIT, nothing in the state Supreme Court ruling on the statute that governs sweepstakes says that sweepstakes or Internet cafes are illegal. What is illegal is the use of fun and entertaining games to reveal the winnings, he said.
The restraining order said the IIT Sweepstakes Promotional System is a server-based electronic sweepstakes. “A database within the server contains a finite pool of sweepstakes entries….” the order said.
A true sweepstakes game is plugged into an Internet server and the winnings are already selected when the player sits down and begins to play, said Christopher Clifton, attorney for IIT.
Earlier this month, Grace and Clifton brought sweepstakes software downloaded onto a computer for local law enforcement to view in Richmond County. The new sweepstakes machines have a reveal button that the user clicks on to show how much money is won. The user can then chose to look at a screen that resembles a slot machine which shows them what they have just won. On the sweepstakes software, there is a separation between the reveal of the winnings and the slot machine screen.
The restraining order said, in part: “This Order enjoins the State of North Carolina from enforcing N.C.G.A. 14-306.4 against IIT and its licensees only. THIS ORDER OFFERS NO PROTECTIONS AS TO ANY OTHER COMPANY OFFERING ANY OTHER SWEEPSTAKES SYSTEM.”
Richmond County Sheriff James Clemmons Jr. said that where the ruling comes from doesn’t matter. “I will follow the letter of the law and being that a restraining order has been issued, I will follow that,” Clemmons said on Wednesday.
Because the ruling is in favor of IIT, local sweepstakes businesses must operate with software made by that company, Clemmons said.
Jerry Bass, owner of JB Business Center in Hamlet, can legally operate his business because his computers have software made by IIT, said both Clemmons and Hamlet Police Chief Amery Griffin.
Clemmons said that as far as he knows all other sweepstakes businesses in Richmond County, without the IIT software, are no longer in operation.
Griffin said that Bass’s business is the only sweepstakes business that Hamlet has. “We really haven’t had any problems with him,” Griffin said.
Both Clemmons and Griffin said they are waiting for the next step.
A court hearing is scheduled for Feb. 4 in the Davidson County case to further discuss the issue.
— Staff Writer Laura Edington can be reached at 910-997-3111, ext. 18, or by email at ledington@civitasmedia.com.
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