Whether it is legal to own and operate “games of skill” is still ambiguous on the state level, but some local leaders have decided to go ahead and prohibit these electronic gaming businesses often referred to as “fish-table” games.
The City of Lexington recently issued a six-month prohibition on new permits for businesses operating table-mounted video games that pay out rewards, usually cash, for accumulating points by “catching” electronic fish.
Tammy Absher, director of the Lexington Office of Business and Community Development, said there are unresolved lawsuits and legislation as to how to enforce city ordinances for businesses operating games of skill.
“We are just giving ourselves a little time to digest everything and to see what the outcome is to give ourselves clear determination of how to regulate these businesses,” Absher said.
Davidson County Manager Zeb Hanner said the county does not have any current regulations restricting electronic or “fishing” games. He said the problem is that once a regulation is put in place, the manufacturing companies find a way to get around it.
“The county hasn’t really taken a position,” Hanner said. “The problem is they keep changing these games; you don’t know what is legal and what is not legal, and it’s hard to enforce when you don’t have a set rule. It’s like nailing Jell-O to a wall.”
Hanner said that if there isn’t a state regulation against owning these machines and the business follows the rules, they are allowed to operate within Davidson County.
“As long as they are in compliance with the building code, the fire code and are zoned properly, they can operate just like any other business,” Hanner said.
In 2010, the State of North Carolina banned internet-based sweepstakes games, which resembled casino or slots-style games where players were rewarded with cash, on the basis that they were outlawed under the state’s gambling law. The state Supreme Court upheld the law in 2012.
In an effort to get around these restrictions, software providers reprogrammed these sweepstakes machines to games of skill that reveal the player’s prize prior to playing the game. This software change made it difficult for law enforcement to differentiate between illegal gaming machines and arcade machines.
Davidson County District Attorney Garry Frank said because these manufacturers continuously adjust the games to get around the law, it is very difficult to charge business owners with a crime.
“It is total frustration,” Frank said. “Over the years, the court rulings and statutes have changed to prevent these kinds of businesses, but these manufacturers adjust the game slightly to get around them. It becomes a matter of whether it is worth the effort and resources to pursue criminal prosecution. You have to do a pretty thorough investigation and be able to prove your case without a shadow of a doubt, which can be difficult.”
Frank said the use of zoning ordinances and business permits have proven a better way to regulate these gaming businesses.
A supplier of fish table games from High Point, who asked that only his first name, Ryan, be used, said the ban on fish table gaming businesses in Lexington and Thomasville has not really impacted his business as much as it has his clients.
“It hasn’t really slowed down our business, but it can hurt our clients,” he said. “They keep on fighting these laws and calling different counties to see if they are allowed. It can cost up to $5,000 per table, so it is a major investment. But usually if they get shut down, they reopen in a couple of days.”
He said fish table and other skill game suppliers have the ability to go to other states with fewer regulations than North Carolina.
“Laws in other states, like Florida and Georgia, are not as strict, so there is still a good market. We might just have to drive a little bit further, that’s all,” he said.
The supplier said he doesn’t believe these tables should be considered “illegal gambling” because, for one thing, they don’t pay out a lot of money and also the gamers know upfront what they’re playing for.
“It’s not like we are in Las Vegas or anything, getting paid hundreds of dollars,” he said. “At most they get five or ten bucks. … I think most people just do it for the enjoyment. It gives them something when they have nothing else to do.”
He said he believes that these games will be available no matter what laws legislators pass.
“They always seem to find a loophole,” he said.
Maj. Robby Rummage with the Lexington Police Department said their officers do need to understand the legality of these businesses, but they are more concerned about the possibility of an increase in crime.
“These businesses are open late at night and they have a lot of cash on hand,” Rummage said. “There are people out there looking for an easy opportunity to commit a robbery or a larceny. We have had robberies recently of such places, and that is our concern. We aren’t trying to prevent these patrons from entertaining themselves, it is more about the safety concern. There is a much wider picture to these businesses, and that is how we are trying to approach it.”
Absher said there have been other issues, such as violations of the fire code, associated with these businesses. She said sometimes a business will apply for a certificate of occupancy as an office or retail store, then once the location is inspected and passes as an office, they will re-wire the building without electrical permits and set up back-rooms and other areas for these kinds of machines.
Thomasville City Manager Kelly Craver said that the city council has already taken steps to prevent sweepstakes and fishing games from opening in their town.
Between 2015 and 2016, Thomasville Police, the FBI and the ALE raided several businesses for operating illegal video gaming machines. Craver said at that time the Thomasville City Council amended its zoning law to prevent these businesses, or ones similar, from reopening.
“Our zoning ordinance prohibits electronic internet gaming of any sort,” Craver said. “Once we shut these businesses down, we outlawed them in every zoned district. But beyond that, we also have a couple of other cards in our pocket.”
Craver said the City of Thomasville also requires any business to register with the city before they can receive a certificate of occupation and have utilities connected. He said this double layer of protection has worked, so far, in keeping illegal gaming businesses from opening in Thomasville.
“The state legislation has been caught up in this for the past three year,” Craver said. “They have written statues but they have to be broad to cover a lot of different things. All these places do is just change the software to get around it. The problem is you can write software faster than you can write legislation.”