Gov. Bev Perdue to tax video sweepstakes machines in N.C.

Jun 11, 2012 9:46 AM

Gov. Bev Perdue asked North Carolina legislators Thursday to tax video sweepstakes machines as long as they’re legal for more education money because lawmakers won’t accept her earlier proposal to raise the sales tax.

At a news conference the day after she signed a bill allowing live dealer games at the Cherokee casino, the outgoing Democratic governor told reporters that Republicans need to do something to boost public school funding.

If they’re not going to consider a temporary three-quarter-cent sales tax increase for next year, Perdue said, taxing and regulating the machines is another option. In March, the state Court of Appeals struck down the legislature’s 2010 ban on the machines, but the ruling has been appealed to the state Supreme Court.

Perdue had signed the 2010 ban into law, but she’s suggested since the appeals court ruling that state oversight might be the only solution.

“Let me be clear. I’ve got a record on it, and I don’t like sweepstakes,” Perdue told reporters, but “until we can outlaw them or somehow the courts allow them to be outlawed forever, we need to tax the heck out of them and regulate them hard.”

The electronic sweepstakes games give people who buy Internet or phone time the opportunity to uncover potential cash and prizes with mouse clicks on a computer screen.

Sweepstakes software providers and an amusement machine company sued over the ban on the games, and the Court of Appeals ruled in a split decision that the ban was overbroad and infringes on the free-speech rights of their operators. Since then, the number of sweepstakes cafés has grown and are common sights on big-city and small-town strip malls and street corners.

Perdue’s office said such regulation could bring in $300 million next year, although she didn’t provide details about what a regulated industry would look like.

The legislature has been trying for more than a decade to rid the state of video gambling machines and sweepstakes, saying the games can’t be regulated, are addictive to players who lose hard-earned money, and lead to crime and family strife. Traditional video gambling machines were outlawed in 2007.