A legal order preventing enforcement of a recently passed state gambling law is stopping law enforcement from cracking down on new electronic-gambling machines that offer cash payouts, Buncombe County Sheriff Van Duncan and District Attorney Ron Moore said in a press conference today.
“The legislature passed a law at the end of last year that outlawed the new, computer-based machines,” Duncan said. “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 towards getting the machines removed from the store.”
But they hit a roadblock, however, on Dec. 16, when Guilford County Superior Court Judge John Craig issued a restraining order on enforcing the law at the request of Hest Technologies and International Internet Technologies, two companies that are suing to overturn it.
“We’re kind of limbo right now: Our hands are tied,” Duncan said. “We’re waiting for some kind of ruling on that particular case.”
The issue is a particularly sensitive one in Buncombe County 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, Duncan said.
“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,” Duncan said. “There aren’t any regulations or rules like there were on the old video-poker machines [before they were banned].”
The new machines work like this: A customer will buy a phone or Internet-access card that also allows them a certain amount of time playing a game of chance on a computer. They can get cash payouts for the amount they win. The suit filed by Hest and IIT claims that since the customer is buying something of value, the ability to randomly win some cash at the machines isn’t the main purpose and thus they’re as legal as a scratch-off game at a fast-food chain.
“To us, it seems to work just like the old machines,” Duncan said.
Furthermore, a sheriff’s investigator — whose identity was not divulged due to the fact that he does undercover work — said at the conference that the phone cards often don’t actually work.
“We bought several cards and tried to make phone calls, [and] every time we tried that we’d get a busy signal,” he said. “When we called the 800 number on a cell phone, it would say our account balance was zero. You can get on the Internet with them, but one lady told me that no one ever gets on the Internet. In one place there wasn’t even a keyboard to get on the Internet. It was strictly set up for gambling.”
“Their argument is that it’s like a sweepstakes, like when McDonald’s has the monopoly game,” Moore added.
Moore said that the ongoing gambling poses several problems.
“The large amounts of money involved generates corruption,” he said. “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.”
“The ruling said that the machines, in the judge’s opinion, don’t violate the changed law,” Moore continued. “We’re at an impasse of being able to investigate or prosecute these machines right now. 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.”
— David Forbes, staff writer