By L.A. Williams, Correspondent
Christian Action League
Video poker promoters pushing so-called “sweepstakes” machines that circumvent state law may soon find themselves violating local zoning rules as municipalities across the state crack down on the growing number of gaming parlors.
On Monday (Feb. 8) Rocky Mount City Council approved a 60-day moratorium on new gaming parlors and ordered the planning board to set up rules for the businesses to be implemented by April 9. Kinston City Council passed a similar moratorium late last month.
“Obviously we’d prefer statewide legislation that would close the loophole allowing these virtual gambling machines to exist; but until the video poker ban can be patched, we’re thrilled to see municipal governments stepping up to set some limits,” said the Rev. Mark Creech, executive director of the Christian Action League. “That’s local government protecting local folks.”
Although state lawmakers banned video poker — the crack cocaine of gambling — in 2006, the gaming industry has consistently found a way around the ban, most recently selling Internet access cards that allow purchasers to activate the games. Proposed laws crafted to address the “sweepstakes” would also nullify harmless peel-off promotions at fast food restaurants.
As more and more business owners have begun to install and promote the sweepstakes machines, so have more town officials began to take action. Hendersonville and Franklin set fees of $2,600 for sweepstakes machines and Canton in January passed a new ordinance forcing business owners to purchase a $2,500 privilege license for four machines and pay an extra $700 for additional terminals. The Canton ordinance requires that the business make no more than 15 percent of its revenue from sweepstakes, though officials admit that will be hard to monitor. One business in the mountain town recently registered 19 machines.
Further east, Wilson issued a 60-day moratorium in December to block more sweepstakes cafes from opening and has since approved zoning rules that relegate the businesses to industrial areas to keep them away from churches, schools and neighborhoods. Existing operations have three years to move into the industrial zone. New ones must locate there to begin with.
Professors at the UNC School of Government said late last year that municipalities could use zoning and privilege taxes to influence where the games were played and how many machines are installed and in essence treat cyber-sweepstakes operations as “legal, but less than desirable uses.”
Police are already seeing that less than desirable effect. Nearly $5,000 in cash was reported stolen recently from an Internet cafe in Mount Airy. A New Bern sweepstakes hotspot was robbed Jan. 2. And in Burlington, two such businesses were robbed within a month. Police in Shelby reported at least three incidents connected to the sweepstakes operations. Last year, planners there notified more than a dozen business centers offering the games that they were not in compliance with zoning laws and had to either apply for a permit for video gaming or shut down. As of December, officials in Graham increased permits from $25 to $1000 for the sweepstakes promoters.
“This kind of thing can be a double-edged sword,” said the Rev. Creech. “While we urge municipalities to use fees, zoning or whatever power they can to fight back this blight on our communities, we also warn them not to begin seeing these fees as a viable budget funding source. Any revenue from gambling will always be overshadowed by the social costs — welfare, addiction, increased crime — all the negatives that gambling brings with it.”