By Heidi Perez-Moreno
heidiperez-moreno@borderbelt.org
In a split decision, the N.C. Court of Appeals ruled against a video sweepstakes operator in Robeson County, saying the company’s games violated state gambling laws.
The ruling handed down Dec. 31 dealt the latest blow to video sweepstakes in North Carolina, where state lawmakers have been limiting the industry for two decades.
No Limit Games sued Robeson County, the town of Pembroke, Robeson County Sheriff Burnis Wilkins and the leaders of several state agencies in 2023, arguing that it should be allowed to operate because its games require skill, not chance. A trial court agreed, prohibiting the removal of No Limit Games’ kiosks from retail stores and other facilities.
The ruling by the Court of Appeals overturns that earlier decision. Two of the three judges on the court said the kiosks’ entertaining displays violated state law. Judge Jefferson Griffin dissented, arguing that the games required sufficient skill to comply with the law.
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Representatives from No Limit Games did not respond to a request for comment for this story.
No Limit Games operates kiosks linked to its website, Youbux.com, where customers can purchase gift certificates and receive sweepstakes entries. These entries can reveal prizes instantly or through simulated games featuring elements like “nudging” reels or a memory challenge. The company argued that outcomes were predetermined before gameplay, distinguishing its operations from illegal gambling.
North Carolina banned slot machines in 1937, but the digital age had to answer to emerging video poker games. The situation escalated in 1999 when South Carolina banned video gaming machines, Jeff Welty, a criminal law expert at UNC Law, wrote in a blog post for the UNC School of Government.
Concerned that the machines would flood North Carolina, the state General Assembly responded in 2000 by banning new “video gaming machines” while allowing those already in operation to continue. The legislature banned more of the machines in 2006.
“The General Assembly decided that it had been too lenient,” Welty wrote in the blog. “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.”
The Court of Appeals ruling adds to a series of defeats for sweepstakes operators in North Carolina, marking at least the ninth appellate decision reinforcing state gambling laws. Despite ongoing legal challenges, the industry continues to grow, driven by significant profits and innovation, including a shift to virtual operations.
The case underscores the persistent tension between regulatory enforcement and the adaptability of sweepstakes businesses. Critics argue these operations target vulnerable communities and facilitate criminal activity, while proponents highlight their economic contributions.
The appellate decision reinforces North Carolina’s tough stance on electronic gaming, signaling that future operators will face heightened scrutiny. As the industry evolves, particularly through online platforms, further legal and legislative action is expected.
