Sweepstakes Parlors vs City of Mebane

MEBANE — Online sweepstakes parlors are loved by some and hated by many, and the Mebane City Council is among the “many.”

The council voted unanimously Monday, March 4, to approve amendments to the city’s Unified Development Ordinance restricting “video gaming arcades,” otherwise known as online sweepstakes businesses, which have danced around the state’s strict gambling laws for years.

These amendments:

• • Ban such businesses from existing within 1,500 feet of a residence, school, church or any other place of worship, community center, community college, community recreational facility or another sweepstakes business;
  • Restrict the hours of operation to between 10 a.m. and 10 p.m.; and
  • Prohibit flashing lights or fluttering devices used to attract attention.

Two sweepstakes businesses are currently within Mebane’s city limits, and they’ll be grandfathered into the revised ordinance. The hope is that the amendments will stop new businesses, which have been shown to attract crime, from setting up shop in the city.

Alamance News Publisher Tom Boney had a lengthy back-and-forth with City Attorney Lawson Brown over the legality of sweepstakes businesses as a whole, citing the Burlington Police Department’s October 2018 crackdown that forced 30 such businesses to close.

Brown explained that so long as the games require some level of thought or dexterity, they’re not considered “games of chance,” and are therefore legal in North Carolina. Many of these arcades require players to perform a task, such as stopping a clock on a certain time, to win the full prize amount, making them games of skill.

Burlington’s crackdown, Brown continued, was the result of a months-long investigation that found sweepstakes parlors within the city contained illegal games of chance and therefore were in violation of state law.

However, two companies have sued Burlington and Police Chief Jeffrey Smythe, claiming they misinterpreted the state’s gambling law to drive them out of business.

Boney then asked whether Mebane’s current sweepstakes businesses were following the law, and Brown responded, “Without an investigation, I couldn’t tell you.”

Until they’re found to be in violation of the law, said Cy Stober, the city’s development director, Mebane can’t outright forbid them, which is what led the city to revise the UDO in the first place. They’re trying to herd the state’s most elusive sheep.

“Getting back to Land Use 101, you cannot prohibit someone’s constitutional rights if they’re pursuing their dream,” Stober said. “If their dream is to open a video gaming arcade, you have to accommodate them to a reasonable degree. We believe that the regulations proposed tonight are reasonable, yet will limit those facilities to a few select areas of the community, just like they would limit an adult establishment to a few select areas of Mebane. … A prohibition would be a violation of a property owner’s constitutional rights.”

Council member Tim Bradley told Boney they’ve done as much as they can legally to keep these businesses out of the city, and that their hands are tied by these companies’ ability to skirt the law.

“The way the law is written, it’s very squirrely,” Bradley said. “If you have machines that require dexterity or thought rather than simply pulling the pin and then 7-7-7 comes up and you win, then they are legal, and they’re very difficult to remove. I think, back to the question I asked a while ago — ‘Have we taken this as far as we can that would be defensible in a court of law?’ — I think … we have. I think if they come back to Burlington under the guidelines of machines of thought or dexterity, [Burlington] won’t be able to stop them, either.”

The council agreed, if the lawsuits filed against Burlington end in the city’s favor, staff should amend the UDO accordingly. For now, they’ve done what they can.