Some businesses gamble on legality of 'sweepstakes' machines

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Some businesses gamble on legality of 'sweepstakes' machines

By CASSIE FOSS
cfoss@islandpacket.com
843-706-8125

Published Saturday, September 24, 2011   |  1146 Words  |  

When a Beaufort County sheriff's deputy walked into the Hest Sweepstakes Internet Cafe in Bluffton last week, he found three people at computers playing an electronic casino game.

It looked like gambling to him.

The deputy spoke to the manager of the store on Fording Island Road, Sandra Christine Houck, who told him the customers make charitable donations to a sweepstakes that benefits Skyeward Bound Ranch, a Texas-based nonprofit organization. The donations are entered as gaming credits on one of the machines. Patrons play the credits and either lose points or, if they gain them, earn cash prizes, according to a sheriff's office incident report.

It's all likely illegal, according to state law enforcement officials.

The Sheriff's Office is investigating the Bluffton operation run by B&L Business Centers of South Carolina, which is actually based in North Carolina, according to the report.

"They aren't the old-fashioned video poker games and slots like in the past, but they're still illegal," Sheriff P.J. Tanner said. "Every time you turn around, someone's changing the format, but the majority of the games are sweepstakes or some sort of casino games. ... Even if it's a nonprofit or a sweepstakes, it doesn't matter.

"If it's a game of chance, it's against the law."

Duffie Stone, 14th Judicial Circuit solicitor, agreed.

He said the state's gambling laws, amended in 2000 to ban video poker machines, also banned machines that simulate gambling.

"It doesn't matter what it looks like," Stone said. "The courts haven't been very sympathetic to machines that operate through donations."

SKIRTING THE LAW?

It's not the first time a Beaufort County sweepstakes operation has run afoul of gambling law, Tanner said.

In June, a Hilton Head Island restaurant owner asked if he could place electronic sweepstakes games in his restaurant. The owner gave Tanner a legal opinion written by the company's attorneys that said the games were legal.

Tanner sought a second opinion from the S.C. Attorney General's Office.

That opinion, released June 6, indicated any games that simulate gambling, even if used for promotional sweepstakes, are illegal.

On June 29, deputies seized machines from a Beaufort convenience store and charged its owner with keeping unlawful gambling devices, a misdemeanor that carries a fine of as much as $500 and up to a year in prison.

On July 1, deputies confiscated sweepstakes machines from a building on Parris Island Gateway near Port Royal and charged one person with operating unlawful games and betting. The charge, also a misdemeanor, carries up to $2,000 in fines and up to a year in prison for each machine confiscated, according to the Solicitor's Office.

The games have cropped up recently in other parts of the state.

Horry County police seized game machines June 27 at a Little River store called "Wine and Time." Players were ticketed for misdemeanor charges. Two employees were also cited, and the owner was issued an arrest warrant for operating a house of gambling, according to Donna Elder, 15th Judicial Circuit senior solicitor.

"Some of these businesses are very profitable, and they're trying to weave through the statute," Elder said.

"We've seen a proliferate amount of these machines in the past three years," SLED director Mark Keel said. "In the past, even when they knew the machines were illegal, they'd still run them because of the money they make."

Keel said sheriffs across the state have complained about the machines. He said he recently attended a conference of the state's convenience store association, where he told store owners the gambling laws will be enforced.

"They might not know they're illegal, so I wanted to give them fair warning," he said.

COMPANY RESPONDS

Shannon Canard, a spokesman for Hest Technologies, the Texas-based company that licenses the software in the Bluffton machines, says the company's games and sweepstakes are different from those seized in other parts of the state.

Canard said the machines comply with South Carolina sweepstakes laws, and the games have nothing to do with whether a player wins or loses. She said there was a "perception" issue about the machines among state law enforcement officials.

Currently, about 10 locations in the state have machines with Hest software, Canard said. She said none of the establishments have been raided.

Canard said B&L Business is one of Hest's customers. A business license for Bluffton's sweepstakes store granted by Beaufort County on Sept. 15 lists Thomas LaSerre of Garner, N.C., as the principal owner.

Attempts to reach LaSerre and Houck, the store's manager, for comment were unsuccessful.

Canard said donations from the machines go to Skyeward Bound Ranch, which coordinates fundraisers for charities such as Autism on the Seas, a group that plans cruises for families with children with autism and other disabilities.

She declined to say what portion of Hest's earnings are donated to Skyeward Bound. According to its website, the company raised $71,000 to help send families on a seven-night Caribbean cruise in April.

TIME AND RESOURCES

At Hest Sweepstakes on Monday, each gaming machine's hard drive had a sticker with a serial number and a picture of the state of South Carolina, along with the acronym "VPVPKC Company" and a telephone number, according to the deputy's report.

The deputy called the number, which went to the company's voice mail, the report said. Messages left were not returned.

The report said Houck told the deputy the gaming equipment was approved by the S.C. Law Enforcement Division.

SLED's Keel said that's not true.

"SLED does not authorize these machines," he said.

Keel said Magistrate Court judges decide whether seized machines violate state law.

"Each machine has to be evaluated on its own to determine whether it's a game of chance," he said. "It's a problem from the standpoint that they have to look at each machine, which takes a lot of time and resources."

Despite that problem, Keel said one thing is a safe bet.

"Bottom line is: We're going to be enforcing this law."

Follow reporter Cassie Foss at twitter.com/LcBlotter.

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