Smith's Criminal Case Compendium

Smith's Criminal Case Compendium


This compendium includes significant criminal cases by the U.S. Supreme Court & N.C. appellate courts, Nov. 2008 – Present. Selected 4th Circuit cases also are included.

Jessica Smith prepared case summaries Nov. 2008-June 4, 2019; later summaries are prepared by other School staff.


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E.g., 11/27/2021
E.g., 11/27/2021

The plaintiff filed a complaint seeking a determination, among other things, that its video gaming enterprise did not constitute an unlawful sweepstakes in violation of G.S. 14-306.4. The trial court granted summary judgment for the defendants. The plaintiff appealed, and the Court of Appeals affirmed the granting of summary judgment with respect to the issue of whether the gaming enterprise violated G.S. 14-306.4 while reversing the trial court’s decision to grant summary judgment in defendants’ favor with respect to the issue of whether the gaming enterprise violated G.S. 14-306.1A. The Supreme Court granted discretionary review.

The plaintiff’s video gaming enterprise consists of two electronic games.  The first is the Reward Game, which is a game of chance. Customers use Reward Points from that game to play the Dexterity Test, which involves some skill, as it rewards Dexterity Points based on how closely the customer stops a stopwatch to the designated number. Dexterity Points may be redeemed for cash.

The Supreme Court stated that the relevant test for determining whether the operation of an electronic gaming device violates G.S. 14-306.4(a) is whether the results produced by that equipment in terms of whether the player wins or loses and the relative amount of the player’s winnings or losses varies primarily with the vagaries of chance or the extent of the player’s skill and dexterity. Applying that test, the Supreme Court agreed with the Court of Appeals that the plaintiff’s gaming enterprise violated G.S. 14-306.4. First, given that the number of Reward Points increases the dollar value of the prizes that a player is entitled to win in the course of the Dexterity Test, Reward Points are a “‘[ ]thing . . . of value’” pursuant to G.S. 14-306.4(a)(4). Slip op. at ¶ 24. For that reason, the Court concluded that the Reward Game violates G.S. 14-306.4.

The Court reached the same conclusion when considering the Reward Game and the Dexterity Test in conjunction. Even though the Dexterity Test, viewed in isolation, involves skill or dexterity, a customer’s ability to win more than a minimal amount of money is controlled by the outcome of the Reward Game. A person who is wholly unsuccessful in playing the Reward Game cannot win more than $1.00 regardless of how well he or she performs while playing the Dexterity Test. The Court reasoned that this fact established that the amount of a player’s winnings is primarily dependent upon chance rather than skill or dexterity as required by G.S. 14-306.4. Because chance predominates over the exercise of skill or dexterity in plaintiff’s games, the Court concluded that they are properly classified as a game of chance rather than a game of dexterity or skill.

Thus, the Court held that the plaintiff’s gaming enterprise is an unlawful sweepstakes in violation of G.S. 14-306.4. The court concluded that this determination obviated the need to decide other issues on remand, and accordingly modified and affirmed the decision of the Court of Appeals.

The court reversed Hest Technologies, Inc. v. North Carolina, 219 N.C. App. 308 (Mar. 6, 2012), and held that G.S. 14-306.4 does not violate the First Amendment because it regulates conduct, not protected speech. The court also concluded that even if the statute incidentally burdens speech, it passes muster under the test of United States v. O’Brien and that the statute was not overbroad.

For the reasons stated in Hest, the court reversed Sandhill Amusements v. North Carolina, 219 N.C. App. 362 (Mar. 6, 2012) (G.S. 14-306.4 is unconstitutional).

Gift Surplus, LLC v. State of North Carolina, ___ N.C. App. ___, 833 S.E.2d 703 (Oct. 15, 2019) temp. stay granted, ___ N.C. ___, 834 S.E.2d 431 (Nov 19 2019)

The trial court entered a permanent injunction prohibiting the State from enforcing the sweepstakes and gambling bans against the plaintiff, having determined the plaintiff’s machines did not violate the applicable statute, G.S. 14-306.4. On appeal, the court determined that the machines qualified as an “entertaining display” in violation of G.S. 14-306.4(a)(3) and reversed the injunction. Two judges wrote separately to concur in judgment.

There was sufficient evidence that the defendants conducted a sweepstakes through the use of an entertaining display, including the entry process or the revealing of a prize in violation of G.S. 14-306.4. The court rejected the defendants’ argument that because the prize was revealed to the patron prior to an opportunity to play a game, they did not run afoul of the statute.

Reversing the trial court’s ruling that federal Indian gaming law prohibits the State from granting the Eastern Band of Cherokee Indians of North Carolina (“the Tribe”) exclusive rights to conduct certain gaming on tribal land while prohibiting such gaming, in G.S. 14-306.1A, throughout the rest of the State. The court held that state law providing the Tribe with exclusive gaming rights does not violate federal Indian gaming law.

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