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NC bill seeks to legalize sweepstakes cafes, games

Michael Biesecker, Associated Press

RALEIGH, N.C. (AP) -- A bill to legalize and tax sweepstakes cafes in North Carolina was filed Wednesday by legislators whose campaigns accepted cash from sweepstakes operators.

If approved, House Bill 547 would mark a reversal of course for the state. The General Assembly has previously approved three laws outlawing video poker and electronic sweepstakes. The North Carolina Supreme Court upheld the most recent ban in December, resulting in raids and arrests in several counties across the state.

Campaign finance records show bill sponsors Rep. Jeff Collins and Deputy Democratic Leader Michael Wray received checks from sweepstakes operators.

Collins, R-Nash, got $2,500 days before the November election from Chase Burns, an Oklahoma man indicted in Florida last month over accusations his company profited from Veterans of the World. Prosecutors say the charity received $300 million from illegal gambling but spent only 2 percent on helping vets.

Wray, D-Northampton, got at least $2,550 in 2010 from three donors tied to sweepstakes cafes in North Carolina, according to records.

Those donations were part of a much larger flood of money that has quietly flowed into campaign accounts of North Carolina politicians from both parties as lobbyists for the sweepstakes industry geared up to push for legislation legalizing the games.

To play, customers get prepaid cards or numeric codes and then go to a computer to play "sweepstakes" games that resemble Vegas-style slots and have such names as "Money Bunny" and "Captain Cash." Winners go back to a cashier with their cards and collect any winnings in cash.

North Carolina lawmakers first passed a ban on video poker and all other electronic gambling in 2006, following a political scandal involving political donations from the games' operators. The industry quickly adapted, introducing new sweepstakes games they said complied with the law.

Lawmakers responded with new legislation in 2008 and 2010 that made it unlawful to possess a game terminal that simulates slot machines or are used for the display of electronic sweepstakes. The makers of sweepstakes software then sued the state, saying the ban violated their Constitutional free speech rights.

The resulting court fight dragged on two years, culminating in the December 2012 Supreme Court decision upholding the ban.


Follow AP writer Michael Biesecker at twitter.com/mbieseck