One of the very first pieces of legislation that will be taken up in the Statehouse this year targets internet sweepstakes cafes. State Senators met Thursday morning to discuss a bill that would clarify the machines are illegal under video poker laws.
Sweepstakes cafes have been popping up around South Carolina over the past three years. Law enforcement officials call the games video poker by another name. However, cafe owners say the games are not gambling because a person must first purchase another product, such as food, in order to play.
The State Law Enforcement Division says it has seized over 1,000 machines and computers since it began cracking down last year. However, the question of whether or not the machines are illegal has varied depending on the judge or magistrate presiding over the case.
Legislators tried to close a perceived loophole in the video poker law last year, declaring the games illegal. The proposed ban passed the House but died in the Senate after several senators blocked it from coming to a vote.
Senate Judiciary Committee Chairman Larry Martin (R-Pickens) says he wants the issue addressed early in the year before the agenda becomes full. “If we can get this bill out to the floor early in the session… we’ve got a really good chance of taking it up,” Martin told South Carolina Radio Network. “There won’t be anything blocking us from taking it up.”
A Senate subcommittee unanimously advanced the proposed ban after a hearing on Thursday. It will be taken up at the full Senate Judiciary Committee. The Senate returns to session on Tuesday, January 8.
State Law Enforcement Division Chief Mark Keel is pushing for the ban on the devices. “We continue to see them proliferating in the state,” he told senators, “I get complaints from sheriffs and (police) chiefs every day wanting us to come and do something about these machines.”
However, Keel’s predecessor Reggie Lloyd, whose law firm now represents several internet sweepstakes cafes, says the games are protected under state law. The former SLED chief Lloyd argues the cafes require a person to purchase a product, often a phone card or internet time, before they can log on and play for money— making the games no different than some fast-food promotions.
“There are a lot of people who play McDonalds promotional games,” he said after the hearing, “And they really want to play that Monopoly game at McDonalds because they have a chance to win that particular cash prize.” Lloyd argued the pull-tabs McDonald’s uses are technically illegal under state law.
However Keel said the underlying purpose for the cafes is to let people gamble. “They’re not going in there to buy internet time or to buy phone time. When we go in these locations, these slips that give them internet time or prizes… oftentimes these things are on the floor or in the trash can.”
Robert Cook, a Deputy Attorney General in the state AG’s Office, told senators he believes current state law bans the games, but says there is a perceived loophole among magistrates. “Until the legislature puts in the law… you’re going to have a perception that there’s a problem and there’s a loophole.
Some cafes have won in court by saying they are exempted from the video poker laws because a portion of the money they collect goes towards charity. Cook says the Attorney General’s Office wants state law to clarify that is not the case.
Lloyd said he believes lawmakers are making a mistake by targeting the computers used in sweepstakes games, rather than the software or internet programs that those computers are using. “We don’t think it can be made illegal unless you’re making every device with games of chance illegal. That includes your iPhone, iPads, or anything you use on your home computer to play a game of chance… It’s either all illegal or it’s not.”