'Sweepstakes' games to get day in Beaufort County court this week

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'Sweepstakes' games to get day in Beaufort County court this week

Published Saturday, February 4, 2012   |  982 Words  |  

A statewide legal battle over whether "sweepstakes" machines are gambling devices or merely games will come to Beaufort County Magistrate Court this week.

The video game machines have been seized in raids by law enforcement across South Carolina, including four in Beaufort and Jasper counties last year.

Trying to handicap the machines' legality is a roll of the dice, however.

Law enforcement says they are games of chance, outlawed by the same amendment to the state's gambling laws that made video poker machines illegal in 2000. A S.C. Attorney General's opinion, issued at the request of Beaufort County Sheriff P.J. Tanner, agrees.

But in courts statewide, including a December ruling from a Georgetown County magistrate judge, the growing industry has been deemed legal.

Georgetown County Chief Magistrate Isaac L. Pyatt issued an order in favor of Texas-based HEST Technologies, which manufactures machines that the company claims are used for sweepstakes that raise money for charity.

HEST also will face a Beaufort County magistrate after its machines were seized at establishments in Bluffton, Beaufort, Port Royal and Hardeeville. The hearing is scheduled for 10 a.m. Wednesday, according to court administrator Stephanie Garst.

An attorney for the 14th Judicial Circuit Solicitor's Office will prosecute the case, according to solicitor Duffie Stone -- unusual for Magistrate Court, where the agency that brought the charges typically prosecutes.

Tanner said he requested the assistance.

"We absolutely need the help on the prosecution side," Tanner said. "It's just best for everyone involved that we involve the state because this is obviously ... a 'hot-button' thing in South Carolina."

Attempts last week to reach HEST president Chris Canard and spokeswoman Shannon Canard were unsuccessful.


The sweepstakes machines made by HEST allow patrons to play after they make a donation to a charity for autistic children, with the amount entered as credits. If they make gains, the players may either donate their winnings to the charity or cash out.

Judge Pyatt's order in favor of HEST, stemming from a raid in Georgetown County, said the machines do not violate state law for several reasons. They do not dispense or accept currency or tokens. They also do not include software or a random-number generator that determines the outcome, he wrote.

That ruling and others upholding the machines' legality have been appealed, Tanner said.

In an October raid in Hardeeville in which 24 HEST machines were seized, customers paid cash and received tokens for about 13 different games of chance, Hardeeville Police Chief Richard Nagy said.

The same number of machines were seized during a raid in Bluffton in September. That marked the third time since June that machines were confiscated in Beaufort County.

The games may look different from video poker machines, but they simulate gambling and are still illegal, Tanner contends.

Vigorous legal challenges, however, have led the S.C. Law Enforcement Division to delay a crackdown on video gaming machines that was planned in September, said SLED chief Mark Keel.

Defense attorneys for video gaming machine manufacturers appear to be exploiting a loophole in the state's alcohol-enforcement statute that bans gambling in establishments that serve alcohol but allows contests and sweepstakes, Keel said.

Comparisons to McDonald's Monopoly promotions are used to argue that sweepstakes machines are "games of skill and not games of chance."

"There's a new breed of machines out there that we're trying to learn about," Keel said. "We want to make good cases, quality cases and have our cases well-documented, so if we lose at the magistrate level, we want to be able to build a good record for appeal to circuit court."

Tanner said the issue could end up before the state Supreme Court.

It already is before the state legislature.

Rep. Phyllis Henderson, R-Greenville, recently introduced a bill to close the loophole she says the machines' manufacturers are exploiting.

"This is just another form of illegal gambling," Henderson said.

Her action was prompted by charges filed by the Greenville County Sheriff's Office that were overturned in magistrate and appeals courts, she said.

It wasn't until she did more research, talked to colleagues, and consulted with law enforcement and the attorney general that she discovered how widespread the problem is and how sophisticated the technology has become.

She said she hopes a hearing will occur in the next few weeks.

Rep. Andy Patrick, R-Hilton Head Island, said the measure has support among Republican in the legislature.

Rep. Bill Herbkersman, R-Bluffton, said citizens clearly supported ridding the state of video poker and that the new games must be outlawed as well.

"We've got to keep them out," he said.

Related content:

SLED plans crackdown on gambling machines in South Carolina, Jan. 31, 2012

SC magistrate sides with sweepstakes company targeted by police for alleged illegal gambling, Dec. 20, 2011

President of alleged gambling technology company maintains innocence, Oct. 29, 2011

'Sweepstakes' alleged gambling operation resurfaces, shut down in Hardeeville, Oct. 26, 2011

Sheriff's Office raids Bluffton 'sweepstakes' operation, Sept. 27, 2011

Some businesses gamble on legality of 'sweepstakes' machines, Sept. 24, 2011