Court of Appeals Allows Sweepstakes Preliminary Injunction to Stand

On Friday, a panel of the court of appeals decided an interesting electronic sweepstakes case. The case is Sandhill Amusements, Inc. v. Sheriff of Onslow Co. It generally upheld a preliminary injunction against the Onslow County Sheriff and the District Attorney, barring them from enforcing the electronic sweepstakes statute against certain businesses. [Update: although the DA is named in the case caption, I am informed that the plaintiffs dismissed the case as to the DA, and the DA was not enjoined.] Facts. After officers visited a business that featured several sweepstakes kiosks, the Onlsow County Sheriff and the District Attorney wrote a letter to the president of Sandhill Amusements, informing him of their opinion that the kiosks were unlawful, and stating that they could be seized as evidence and their owners could be charged criminally. Civil suit. That prompted Sandhills and another company to sue the sheriff and the district attorney, in their official capacities. The plaintiffs sought a declaration that the kiosks were lawful and an injunction against the enforcement of the electronic sweepstakes statute, G.S. 14-306.4, and related laws against owners and operators of the kiosks. Evidence. A superior court judge held a hearing on the plaintiffs’ request for a preliminary injunction. It appears that the kiosks work as follows: a patron approaches a kiosk and uses the kiosk to purchase gift cards. The cards may be redeemed for merchandise on the Gift Surplus website. As a promotional incentive, the patron receives a certain amount of sweepstakes entries for each dollar spent. A [...]