The Wilson Times

Thursday, May 08, 2014 11:28 PM

Feds steering sweepstakes crackdown
N.C. ALE raided 2 Wilson businesses Wednesday

By Corey Friedman | Times Online Editor

Federal authorities are behind this week’s N.C. Alcohol Law Enforcement raids of video sweepstakes businesses in Wilson and throughout eastern North Carolina, officials said Thursday.

U.S. attorney’s spokesman Don Connelly said federal prosecutors are involved in a regional operation aimed at seizing sweepstakes machines. ALE agents served search warrants at two Wilson convenience stores and at least one other Wilson County business on Wednesday.

"There are multiple locations throughout our district” where searches are taking place, Connelly said. The state’s eastern federal district includes 44 of North Carolina’s 100 counties and stretches from Raleigh to the Outer Banks.

ALE agents served search warrants at Turner’s Mini Mart at 1327 Ward Blvd. and Sunny Food Mart at 600 Ward Blvd. Wednesday afternoon. Wilson County Sheriff Calvin Woodard Jr. said they also raided a Stantonsburg-area business.

Agents wheeled three gaming machines out of the Sunny Food Mart and loaded them into a U-Haul moving truck.

Officials were tight-lipped Thursday, declining to answer questions about the video sweepstakes crackdown until formal charges are filed.

"We can’t comment on an ongoing investigation until there’s something that comes out in the public record,” Connelly said.

The U.S. attorney’s office wouldn’t say whether the FBI or U.S. Marshals Service had partnered with state ALE agents. Connelly said there is "more than one federal agency involved.”

It was unclear whether anyone had been arrested in connection with the seized machines on Wednesday and Thursday. No one had been booked into the Wilson County Detention Center on gambling charges, but Connelly would not say whether any people were in federal custody.

Officials didn’t specify whether federal prosecutors or the N.C. Department of Public Safety’s Alcohol Law Enforcement section initiated the investigation. Patty McQuillan, a spokeswoman for the Department of Public Safety, referred all questions to the U.S. attorney’s office.

N.C. Attorney General Roy Cooper didn’t call for the crackdown, Cooper spokeswoman Noelle Talley said. Cooper has been a vocal critic of video poker and video sweepstakes games and is defending state laws banning the machines in ongoing court battles.

"The attorney general has stated for years that he wants to make sure these things are outlawed in the state, and it’s something we’re continuing to deal with as we fight the battle in court,” Talley said.

Patrons typically buy a phone card or Internet access card and receive game time on the sweepstakes machines — and the opportunity to win cash — as an added bonus. Critics say players are paying to gamble and the ancillary products they buy for game time often go unused.

The N.C. Supreme Court ruled in December 2012 that a 2007 law banning video sweepstakes games is constitutional, a decision that followed years of conflicting rulings in superior and appellate courts.

Enforcement of the ban last year and this year has been piecemeal, with police and prosecutors in some counties rushing to shut down gaming centers and authorities elsewhere leaving them largely undisturbed.

Sweepstakes halls sprung up throughout North Carolina while courts considered the games’ fate. Some cities and towns began regulating the businesses, adding zoning rules that specify where they can operate and assessing taxes for each sweepstakes machine. That allowed the parlors to claim they’re legitimate businesses but has no bearing on the legality of the games themselves.

Some game operators say they’ve developed software that doesn’t meet statutory definitions for the outlawed games. Several sweepstakes centers that authorities have raided are fighting the gambling charges in court.

"They have for years claimed that they have found ways to get around the law,” Talley said. "That’s not a new argument.”

Connelly, the spokesman for U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina, said he wasn’t authorized to say how many businesses have been searched or how many machines have been seized. | 265-7821

©The Wilson Times, Wilson, North Carolina.
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