Internet cafes may fold

Published 12:00 am Thursday, December 20, 2012

Local operators worried about impact of ruling
By Karissa Minn
SALISBURY — Luck may be running out for video sweepstakes cafes in North Carolina.
On Friday, the N.C. Supreme Court upheld the state’s ban on the casino-style games that keep those businesses running.
Sweepstakes operators have 90 days to appeal the decision to the U.S. Supreme Court. According to the Associated Press, some have already said they plan to request an appeal, and they are asking the courts to delay enforcement of the law for a few more months.
If that delay isn’t granted, the North Carolina Sheriff’s Association has said enforcement can resume on Jan. 3, according to an email sent by Capt. John Sifford with the Rowan County Sheriff’s Department.
That means Tabitha Harris might have to close her new Salisbury business just a few weeks after it opened.
“It’s going to take a toll on us,” said Harris, owner of T&T Internet Cafe. “I haven’t gotten anywhere near the money I put into this place.”
She said she hasn’t yet found a way to keep the cafe open if the ruling stands. The business is still trying to build a steady customer base.
“Even if I just offer Internet service, that wouldn’t pay the bills,” she said. “These days, people have their own Internet service at home.”
What draws people in to use the computers at the cafe is the games, Harris said.
At sweepstakes parlors like T&T, customers enter to win cash and prizes when they buy Internet or phone time. They can use that time to uncover their winnings through virtual slot machines, card games, scratch-off tickets and other interactive computer programs that simulate gambling.
A 2010 state law made it a misdemeanor “for any person to operate, or place into operation, an electronic machine or device to … conduct a sweepstakes through the use of an entertaining display, including the entry process or the reveal of a prize.”
The N.C. Supreme Court ruled in two cases last week in which amusement machine and other companies sought to overturn that law.
Sweepstakes halls have cropped up because of what justices called a loophole since the state outlawed video poker machines in 2007.
The General Assembly determined that businesses that converted from offering video poker gaming to video sweepstakes were using “a mere pretext for the conduct of a de facto gambling scheme,” Justice Robin Hudson wrote for the court.
Amusement machine companies, a software developer, and firms that market long-distance phone and Internet services argued in court there’s no gambling because prizewinners are predetermined, the Associated Press reports. They also argued that the video gaming enjoyed free-speech protections under a U.S. Supreme Court ruling last year just like books and films.
The state Court of Appeals had ruled that the ban was unconstitutional, and the parlors were allowed to stay open.
But the N.C. Supreme Court said the state law regulates the conduct of playing the sweepstakes games, which opponents say feed the same gambling addictions as traditional video poker machines.
Thomas Thomas, an employee of G.B.’s Internet Cafe in Spencer, said there are four or five employees who work there and serve about 100 customers per day.
“I don’t think it’s hurting anybody,” Thomas said. “We don’t hear of anybody that’s been pulled out of their house for this right here. But (the court ruling) will hurt us.”
He said the ruling could cost many North Carolinians their jobs, because it would force businesses to shut down.
“I pay my bills and rent off of this right here, and I’ve been doing so for a couple of years,” he said.
Thomas said he doesn’t know what the cafe can do to stay in business. There are four or five employees who work there, he said, serving about 100 customers per day.
The computer time people purchase also can be used to do homework, find jobs or just surf the Internet, Thomas said. The cafe offers faxing and copying services, too.
But the games make up most of their business.
Three or four times a week, Salisbury resident Reggie Woods stops by G.B.’s to unwind and try his luck.
“Times are hard, and I might be able to double my money and pay some bills,” he said.
Woods said he doesn’t understand how playing these video games is any different than going to bingo night or buying a lottery ticket.
“It’s just recreation — something to relax,” he said. “I wouldn’t want them to shut it down.”
Contact reporter Karissa Minn at 704-797-4222.