Troubleshooter

Troubleshooter: Loophole allows "slot machines"

Friday, April 24, 2009

Slot machines are only supposed to be legal at one place in North Carolina. That's the reservation in Cherokee. But a loophole in state law is allowing a hi-tech version of slots to stay in play - for now anyway.

In Garner, a sign on the storefront of a strip mall says "fax, copy, internet". But inside, you don't see a traditional copy store. Instead, you see rows and rows of computers, lots and lots of people, and a very familiar sound: slot machines.

Eyewitness News producers went undercover to see what attracts so many people to the 42 Business Center at all hours of the day and night.

All we needed to get started was a driver's license and cash. Once registered, we put our money into a "recharge machine". The clerk helped us log on to a computer where we agreed to the terms and conditions. Then, she explained our choice of games - which all simulate slot machines.

Within minutes, we were playing. When we won, the computer added more money to our pot. When we lost, we had to buy more internet time. $1.00 from our winnings got us 100 more credits.

But even though it looks like gambling, and feels like gambling, by North Carolina law, it is not gambling. It's called an "internet sweepstakes", because it's technically not a mechanical slot machine. It's internet server-based. The machines are not random like real slot machines. Real slot machines have a random number generator, so your chance of winning is really unknown.

A lawyer for an internet sweepstakes distributor told Eyewitness News there's a pre-determined result before the player ever sits down at the computer, and that the slot aspect of the game is just a façade. There are only so many winners eligible for each jackpot, and that the computer slots spinning on the screen are just there to give players something interesting to look at.

State Representative Ray Rapp says that explanation is "craps."

"In the end, it's gambling no matter how you cut it," he told Eyewitness News.

Rapp's trying to shut down internet sweepstakes parlors popping up all over the state.

"We've been playing whack-a-mole with the video gambling industry. Once we pass a law to ban one activity up pops another game that they've been able to put on internet and circumvent the law," he offered.

Police raided places in several counties, including Rockingham, but then a judge issued an injunction and the charges were dropped while the legalities are debated.

But if it's not technically illegal, why's it so secretive? Why no sign in front of the businesses that say "internet sweepstakes"?

At the business in Garner, employees couldn't tell us and the owners aren't talking. Neighboring businesses are, since they've had to deal with the traffic and the mess left behind.

Harlan Noble's just two doors down. He says ever since "42 Business Center" opened, he's also had to deal with heavy cigarette smoke seeping in thru the walls and vents and safety concerns.

"It's not a place I feel comfortable leaving our ladies. We make sure our doors are locked now," he said. "I'd like to get out of this area."

Representative Rapp hopes that's not necessary. He just filed another bill that would close the loopholes, make internet sweepstakes illegal, and end what he calls a losing proposition for all but the business owners.

"It's really directed at the people who have the least amount of money to spend," he said. "At the end of the week, there are children who aren't being fed because the machines are being fed."

Since we started investigating, internet sweepstakes businesses have opened in Clayton and Raleigh, all with good crowds, and all legal for now.

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