According to the News and Observer, Governor Perdue has signed House Bill 80, entitled "An Act to Ban the Use of Electronic Machines and Devices for Sweepstakes Purposes." It becomes effective December 1. I thought I'd take a few minutes to provide some background about the bill, summarize it, and identify some issues that I expect to arise once it takes effect. Background. North Carolina banned slot machines in 1937. G.S. 14-306. That was sufficient until the electronic age, when video poker machines began to appear. Things came to a head in 1999, when South Carolina banned such machines. The General Assembly worried that all the machines in South Carolina would simply move across the state line into North Carolina, so in 2000, it enacted former G.S. 14-306.1, prohibiting new "video gaming machines" but permitting those already in operation to remain. In 2006, the General Assembly decided that it had been too lenient. It repealed G.S. 14-306.1 and enacted G.S. 14-306.1A, banning all video gaming machines. Litigation ensued, with several manufacturers arguing successfully that they were neither "slot machines" nor "video gaming machines" as those terms were defined in the General Statutes. I can explain the particulars of those rulings in a later post if there's interest, but in a nutshell, the manufacturers argued (1) they were in the business of selling telephone time, internet time, or similar services; (2) customers who purchased the telephone or internet time received entries into a promotion or a sweepstakes as a result of their [...]
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