In a post here, Jeff updated you on the dueling superior court decisions on whether G.S.14-306.4—the internet sweepstakes ban—is constitutional or not. The Court of Appeals recently resolved the conflict, holding, over a dissent, that the statute is an unconstitutionally overbroad regulation of free speech. So at least for now, internet sweepstakes operations are good to go. The court’s decision came in a pair of cases, Hest Technologies, Inc. v. North Carolina and Sandhill Amusements v. North Carolina, both issued on March 6, 2012. Hest is the Guilford County case; Sandhill is the Wake County case. Since the court delivered its analysis in Hest, here are the facts of that case, as described by the court. Hest and the other plaintiffs sell long-distance telephone time and high-speed internet service in internet cafes, business centers, convenience stores, and other establishments. All have developed their own proprietary sweepstakes management software, which they use to conduct promotional sweepstakes to market their products. When customers make a qualifying purchase, they receive one or more sweepstakes entries. Alternatively, people may enter the sweepstakes without purchasing any products, if they complete entry forms available at retail locations. Free entries are treated the same as entries accompanying a purchase. The result of each entry has been predetermined by the sweepstakes software before disbursement. A player who has received a sweepstakes entry only can reveal this predetermined result by connecting to a computer terminal loaded with the sweepstakes software. Once connected, the player can choose either an “instant reveal,” [...]
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