State law enforcement leaders ask NC Appeals Court to block Robeson sweepstakes ruling | Eastern North Carolina Now

State law enforcement leaders are asking North Carolina's second-highest court to block a Robeson County trial judge's ruling in favor of a video sweepstakes operation.

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    Publisher's Note: This post appears here courtesy of the Carolina Journal. The author of this post is CJ Staff.

    The leaders of three North Carolina law enforcement agencies urge the state Court of Appeals to block a lower court order in a Robeson County sweepstakes case. The order prevents law enforcement action targeting a sweepstakes operator called No Limit Games.

    The request for a "writ of supersedeas" from the state's second-highest court mirrors a similar request from state officials in an ongoing Forsyth County case.

    The secretary of the state Department of Public Safety and the directors of the State Bureau of Investigation and Alcohol Law Enforcement Branch filed paperwork Friday with the Appeals Court. They seek to block a June 20 preliminary injunction from Robeson County Superior Court in the case No Limit Games v. Sheriff of Robeson County.

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    "Since 2010, North Carolina has expressly banned the operation of video sweepstakes machines," wrote lawyers from the NC Department of Justice. "This ban was enacted in response to the attempt of certain gambling interests to circumvent the State's ban on video poker and similar games through sweepstakes that used those games as marketing tools for purportedly legitimate products. To address this problem, the General Assembly banned sweepstakes that are conducted through all video games of chance, such as video poker and all similar games."

    "Despite this legislative action, sweepstakes operators have repeatedly tried to evade this ban and have regularly sought to enjoin law enforcement officials from enforcing the ban for more than a decade," the motion continued. "As a result, over the course of many cases, our Supreme Court has repeatedly heard arguments from sweepstakes operators that have claimed that their games were legal under the statute. In each instance, however, that Court has unanimously ruled against them."

    State Justice Department lawyers cite a state Supreme Court ruling in 2022 and the state Appeals Court's Aug. 1 ruling in a Hickory case as evidence against the sweepstakes operators.

    "Flaunting this clear precedent, the superior court in this case issued a preliminary injunction blocking enforcement of the law against another purported e-commerce retailer that ... operates 'nudging' games: plaintiff No Limit Games, LLC," according to the motion. "The court did so even though the report that No Limit offered below to show how its sweepstakes games work ... demonstrated that chance can control 'the relative winnings for which a player is able to play' on each turn of its games. The superior court's decision to grant an injunction in these circumstances was unmistakable error."

    The state Appeals Court issued a unanimous order on July 24 denying a request for a temporary stay in the Forsyth County case, BST USA v. State of North Carolina. As in the No Limits case, state law enforcement officials seek a writ of supersedeas that would block a trial judge's order.

    In the latest court filing earlier this month, plaintiffs BST USA and Victory Vending Company defended the trial judge's decision to stop enforcement of state video sweepstakes restrictions.

    "This case raises application of a well-understood test under N.C.G.S. § 14-306.4 to the specifics of Plaintiffs' innovative video sweepstakes games," according to the last court filing. "Judge L. Todd Burke, one of the most experienced and respected Superior Court judges in North Carolina, considered those specifics through hundreds of pages of evidence and briefs and extensive oral argument and entered a preliminary injunction prohibiting criminal enforcement against Plaintiffs' promotional sweepstakes under N.C.G.S. § 14-306.4."

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    Gov. Roy Cooper and the state law enforcement agencies are considered petitioners in the case.

    "Petitioners conducted no discovery. Nor did they even play Plaintiffs' sweepstakes games," the companies' lawyers wrote. "Instead, they immediately petitioned this Court to take the extraordinary step of overturning the preliminary injunction prior to a full merits review, thereby exposing Plaintiffs to criminal prosecution for what is a lawful commercial enterprise."

    A unanimous N.C. Supreme Court last ruled against video sweepstakes operators in the February 2022 case Gift Surplus v. State of North Carolina.
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