The Mountaineer

While state lawmakers fight to close loophole after loophole in rules governing video gaming throughout the state, local authorities have their own related issues to address as well.

North Carolina’s new gaming statute enacted in 2006 required the state to be rid of all video gaming machines by July 1, 2007. But when that law became effective, gaming industry heads had already found a loophole, qualifying the games as a sort of sweepstakes.

Since that time state legislators, high court officials and machine manufacturers have been playing a sort of legal tug-of-war. By the time state lawmakers enact new gaming regulations, industry proponents have new, legal technologies to offer as a way to get around the prohibition.

Cyber-sweepstakes — a craze that is sweeping the state and slowly trickling into Haywood County —are the latest technique in an ongoing effort to keep at least some form of video gaming legal.

Rather than inserting cash into machine terminals, players purchase telephone or Internet usage cards and gaming credit is applied in the appropriate amount. When the games are over, whatever amount of credit is left on the card may be cashed in with a store clerk for currency.

While the sweepstakes are exempt from state regulation, municipal leaders must find a way to regulate the operation like any new type of business moving into town, said Maggie Valley Planning Director Nathan Clark.

Meanwhile, Canton and Maggie leaders have placed a moratorium on incoming sweepstake terminals for a period of time that will allow planners to determine appropriate regulation.

“The technology of cyber sweepstakes, town zoning ordinances and business licensing ordinances did not mesh; they were written before these games evolved,” said Clark. “The planning board understands that our ordinances and new technologies are not in compliance and will be working to close the technological gap in someway.”

Like Canton did in October, Maggie leaders, during a special called meeting Nov. 6, enacted a moratorium, prohibiting any additional game terminals from operating within the town. The 90-day prohibition will allow planning board members to research the issue and determine a solution. Meanwhile, terminals already in place are free to operate.

Clark said the board hopes to reach a solution as soon as possible.

“We don’t want the uncertainty to linger for those who are interested in this business,” he said. “We want to get to work on it and come to a possible solution to present to the town board as soon as possible. That’s their goal.”

Maggie town planners will discuss the issue during a meeting next month, with hopes of having a recommendation for aldermen to act on in January, Clark said.

“The town is not looking to stop the games from coming in to Maggie (permanently),” he said. “They had the foresight to see the technological gap between zoning ordinances and this new electronic gaming function known as cyber sweepstakes. They wanted to take time to research, identify and create a better zoning ordinance for (the games) use and operation.”

Townships throughout the state are regulating the games in a variety of ways. For example, Hendersonville city leaders dealt with the same issue in June by imposing a $2,600 fee per machine for business licenses that cover the operation of sweepstake terminals.

Clark said Maggie planners will consider what other towns are doing and review all options before revising local ordinances or drafting new ones.

Marc Carlton, owner of the PEAK station on U.S. 19, has been operating the sweepstakes games out of businesses in both Maggie and Canton since July.

Operating the machines helps to offset financial deficits created by the slowed economy, he said. “All we’re looking for is another way to make it through this hard time. We’ve got to look at everything we can to pinch another dime out of this economy.”