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.

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