Thursday, June 17, 2010
Internet sweepstakes legislation languishing
This post was updated Thursday at noon.
Just when you thought Internet sweepstakes was dead this session, House Bill 80, which would ban them, is scheduled to be voted on in the Senate Monday night. Here's the text of the bill: HouseBill80.pdf
The bill runs counter to one filed by State Rep. Kelly Alexander, a Charlotte Democrat, introduced House Bill 2030 that would assess a fee per establishment—as much as $5,000—and would tax revenues at 20 to 25 percent. The terminals would also be connected to the N.C. Department of Revenue, Alexander said, “so you know instantly in the revenue department how much is being generated. You’re doing daily deposits; the government is getting paid up front and you don’t have the opportunity of losing the revenue stream.”
However, in April, the Mt. Airy Business Center challenged in federal court the city of Kannapolis’ taxing authority, contending the taxes and zoning regulations are unconstitutional. The court has not ruled on the case. kannapolis_complaint.pdf
Christopher McLaughlin, UNC assistant professor of public law and government argued on the School of Government blog that counties and cities can make fine distinctions in zoning regulations. They also have the authority to levy privilege license taxes on businesses unless it violates “the somewhat squishy requirement in the N.C. Constitution that all taxes be ‘just and equitable.’”
“We don’t know what tax level is discriminatory,” McLaughlin told the Indy. “You have to ask the question ‘Are you eliminating all opportunity for profit?’”
Mt. Airy Business Center might have a case against Kannapolis under the federal Internet Tax Freedom Act, McLaughlin said. That law prohibits state and local taxes on Internet access. However, if state and local taxes are aimed at the machines and not the Internet access, then that erodes the Mt. Airy Business Center’s position.
For several years, the nimble gaming industry has been one step ahead of state law. Legislators outlawed video poker in 2006, but according to a post by Richard Ducker, UNC associate professor of public law and government, on the School of Government blog, “by the time the 2007 ban became effective, the gaming industry had already begun to reprogram their machines and modify their methods of operation to qualify games as a form of sweepstakes in order to avoid the law.”
Ducker told the Indy that criminal law, in order to be effectively enforced, must be written with very specific language, but “the nature of software development is one of those things that’s hard to get a grip on defining.”
The legality of the North Carolina Education Lottery has muddied the legal waters. “It’s an awkward situation where you have the state involved in certain activity and then you make illegal another activity that’s not terribly far removed from it,” Ducker said.
Sweepstakes supporters have flooded the General Assembly with e-mails pleading their case, says Alexander. “They employ a lot of people. Vacant storefronts are being rented and there are other services offered,” Alexander said.
That sounds a lot like the fax Triangulator received from Fish the Net, a sweepstakes café in Durham. It instructed café owners to stress “1. Jobs 2. This is not gambling. 3. Good tenants renting space that would otherwise be empty. 4. Providing a service of both access to the Internet as well as entertainment…”
Alexander said constituents have told him “I work. I got a job. This is my recreation. Who are you to tell me how to spend my recreational time?”
Triangulator pointed out that the same argument could be applied to prostitution.
“That might be the debate in Nevada,” Alexander said. “But not in North Carolina.”
Comments (5)
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The government waste enough of our money now.. Yet they want to control every cent and tell us how to spend it. That whole idea sucks. The government is what's wrong with our country today. They want to make a difference then give us all the same health coverage that the congressmen and senators are provided, funded by us. You need to fix all the crap that you have messed up over the past years and leave the small businessman alone. after all, IT IS OUR MONEY not theirs.
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Yeah, the State of NC wants their State ran Lottery numbers to go up. Sweepstakes has taken away from them. The part that most do not understand is that most of the Sweepstakes Parlors are a true sweepstakes under a Finite system. There is a predetermined outcome. The real fact is one has BETTER ODDS at winning a lot of cash in a Sweepstakes Parlor versus playing the States Lottery and they don't want the competition.
The Senates logic is atrocious when the State needs Dollars to balance the budget. There will be over 10,000 individuals out of work and nearly 1000 rental units not being leased. Most of the renters possibly did not get an exemption clause in their lease and that will cause the proprietor to go under financially because of the sweepstakes ban; possibly losing everything in the process.
Please remember too that there are schools being closed, teachers losing their jobs, libraries are closing, state workers being laid off and much more that this economy as caused. The few folks that may get addicted will be very little to what a half billion dollars will do to help the majority.
I have been to a couple of these sweepstakes places before. Was it my cup of tea? NO. Did I see a bunch of mafia enforcers running the places NO> All I saw was a bunch of over 60 year old Americans enjoying themselves. Whether the state likes it or not these are just regular folk having fun. I read an article yesterday that some legislature stated these sweepstakes were crack dens and a menace to society. I disagree. Whats the lottery and liquor store? I dont get it but when there are 10,000 people in line at the unemployment office and a ton more empty commercial spaces well see who was right and who was wrong! Anyway is the state telling us that by closing sweepstakes the poor will no longer be poor. Or are they telling us the poor wont be able to play sweepstakes so they can start playing the scratch offs again!!!! What a joke
Only the bureaucrats are smart enough to know what to do with my money. They have told me that I can spend it on the lotto, but I cannot spend it willfully in the private sector. The minute this is in effect 10,000 people will be out of a job in NC. This will take every one of those people and turn them from citizens contributing to their community into people living off of the state. It will siphon over half a billion dollars from our local economy during the worst recession in all of our lives. Very smart. I was at the hearing. the bravado and arrogance these guys display is insulting. They carry themselves as if working in the private sector creating all of the wealth for them to take is below them. We should be kissing their feet for not taking all of our money. It makes me sick. All we did was lose another bit of freedom today in that courtroom. When was the last time our state senators and house voted to put 10,000 NC workers out of a job. You are about to see it.
The state of North Carolina and the nation are in an economic crisis. The state badly needs the revenue from internet sweepstakes. Not only that but where was and is the government on the legality of cigarettes and alchol when these are known killers? Citizens are fed up with being told what to do by our government when it is a nonsense isuue rather than one that actually impacts our day to day lives. Leave the internets alone and ban alcohol and cigarettes. Like that's going to happen. Lawmakers love that money regardless of the harm.
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