A restraining order issued by a Guilford County judge is preventing Buncombe County law enforcement from cracking down on new electronic-gambling machines that offer cash payouts, Sheriff Van Duncan and District Attorney Ron Moore said at a Feb. 13 press conference.
“The Legislature passed a law at the end of last year that outlawed the new, computer-based machines,” said Duncan. “We knew we had several businesses that had those machines that were operating. We’d received numerous complaints from the public about family members going in, spending up their paycheck—the same kind of complaints we’d received with the old machines. We started an investigation; we sent detectives out. We were moving toward getting the machines removed from the stores.”
But they hit a roadblock on Dec. 16, when Guilford County Superior Court Judge John Craig issued a restraining order barring enforcement of a recently passed state gambling law. Two companies, Hest Technologies and International Internet Technologies, are suing to overturn it.
“We’re kind of limbo right now: Our hands are tied,” said Duncan. “We’re waiting for some kind of ruling.”
The issue is particularly sensitive locally because Duncan’s predecessor, Bobby Medford, is currently serving 15 years in federal prison on corruption charges related to protection he provided to illegal video-poker operators. There are 40 machines in 13 locations throughout the county that the Sheriff’s Office is aware of, noted Duncan.
“My advice—and it is advice only—to store owners is to not get too involved in this activity until you see where the courts are going to go with it, because it very well could become something illegal in a short amount of time,” the sheriff said.
Here’s how the new machines work: A customer buys a phone or Internet-access card that also enables them to play a game of chance on a computer for a certain amount of time. If they win, they can get on-the-spot cash payouts at the store. The suit filed by Hest and IIT claims that since the customer is buying something, the ability to gamble on the machines is not the main purpose, which makes them as legal as a scratch-off game at a fast-food chain.
Duncan, however, sees it differently, saying, “To us, it seems to work just like the old machines.”
Furthermore, an undercover sheriff’s investigator said the phone cards often don’t actually work.
“We bought several cards and tried to make phone calls,” he reported, “[and] every time we tried that we’d get a busy signal. In one place there wasn’t even a keyboard to get on the Internet. It was strictly set up for gambling.”
Moore, meanwhile, said the ongoing gambling poses several problems. “The large amounts of money involved generates corruption. Secondly, these are large amounts of cash money for which no taxes are paid. And thirdly, from the point of view of a lot of people in state government, it competes with the lottery.
“I’ve talked with the assistant attorney general handling the case, and they’re trying to schedule some motions to see if they can’t dispose of this in court.”