North Carolina § 14-306 - 4. Electronic machines and devices for sweepstakes prohibited.

§ 14-306. 4. Electronic machines and devices for sweepstakes prohibited.

Definitions. - For the purposes of this section, the following definitions apply: "Electronic machine or device" means a mechanically, electrically or electronically operated machine or device, that is owned, leased or otherwise possessed by a sweepstakes sponsor or promoter, or any of the sweepstakes sponsor's or promoter's partners, affiliates, subsidiaries or contractors, that is intended to be used by a sweepstakes entrant, that uses energy, and that is capable of displaying information on a screen or other mechanism. This section is applicable to an electronic machine or device whether or not: It is server-based. It uses a simulated game terminal as a representation of the prizes associated with the results of the sweepstakes entries. It utilizes software such that the simulated game influences or determines the winning or value of the prize. It selects prizes from a predetermined finite pool of entries. It utilizes a mechanism that reveals the content of a predetermined sweepstakes entry. It predetermines the prize results and stores those results for delivery at the time the sweepstakes entry results are revealed. It utilizes software to create a game result. It requires deposit of any money, coin, or token, or the use of any credit card, debit card, prepaid card, or any other method of payment to activate the electronic machine or device. It requires direct payment into the electronic machine or device, or remote activation of the electronic machine or device. It requires purchase of a related product. The related product, if any, has legitimate value. It reveals the prize incrementally, even though it may not influence if a prize is awarded or the value of any prize awarded. It determines and associates the prize with an entry or entries at the time the sweepstakes is entered. It is a slot machine or other form of electrical, mechanical, or computer game. "Enter" or "entry" means the act or process by which a person becomes eligible to receive any prize offered in a sweepstakes. "Entertaining display" means visual information, capable of being seen by a sweepstakes entrant, that takes the form of actual game play, or simulated game play, such as, by way of illustration and not exclusion: A video poker game or any other kind of video playing card game. A video bingo game. A video craps game. A video keno game. A video lotto game. Eight liner. Pot-of-gold. A video game based on or involving the random or chance matching of different pictures, words, numbers, or symbols not dependent on the skill or dexterity of the player. Any other video game not dependent on skill or dexterity that is played while revealing a prize as the result of an entry into a sweepstakes. "Prize" means any gift, award, gratuity, good, service, credit, or anything else of value, which may be transferred to a person, whether possession of the prize is actually transferred, or placed on an account or other record as evidence of the intent to transfer the prize. "Sweepstakes" means any game, advertising scheme or plan, or other promotion, which, with or without payment of any consideration, a person may enter to win or become eligible to receive any prize, the determination of which is based upon chance. Notwithstanding any other provision of this Part, it shall be unlawful for any person to operate, or place into operation, an electronic machine or device to do either of the following: Conduct a sweepstakes through the use of an entertaining display, including the entry process or the reveal of a prize. Promote a sweepstakes that is conducted through the use of an entertaining display, including the entry process or the reveal of a prize. It is the intent of this section to prohibit any mechanism that seeks to avoid application of this section through the use of any subterfuge or pretense whatsoever. Nothing in this section shall be construed to make illegal any activity which is lawfully conducted on Indian lands pursuant to, and in accordance with, an approved Tribal-State Gaming Compact applicable to that Tribe as provided in G.S. 147-12(14) and G.S. 71A-8. Each violation of this section shall be considered a separate offense. Any person who violates this section is guilty of a Class 1 misdemeanor for the first offense and is guilty of a Class H felony for a second offense and a Class G felony for a third or subsequent offense. History (2010-103, s. 1.) Cross References. - As to Class III gaming on Indian lands, see G.S. 14-292.2 . As to Indian Gaming Education Revenue Fund, see G.S. 143C-9-7 . Editor's Note. - Session Laws 2010-103, provides in its preamble: "Whereas, the 1791 General Assembly determined that 'all public gaming-tables are destructive of the morality of the inhabitants of this State, and tend greatly to the encouragement of vice and dissipation' (Law of 1791, Chapter 5 ); and "Whereas, the State of North Carolina has continuously prohibited public gaming in North Carolina since 1791; and "Whereas, the State of North Carolina specifically prohibited the use of slot machines in 1937; and "Whereas, the State of North Carolina specifically prohibited the use of video poker machines in 2000 and again in 2006; and "Whereas, the State of North Carolina has previously determined that such purpose should be carried out to prevent the operation of bingo by professionals for profit, prevent commercialized gambling, prevent the disguise of bingo and other game forms or promotional schemes, and prevent participation by criminal and other undesirable elements; and "Whereas, any federally recognized Indian tribe may conduct such video poker games in accordance with an approved Class III Tribal-State Gaming Compact applicable to that tribe as provided in G.S. 147-12(14) and G.S. 71A-8 ; and "Whereas, the State of North Carolina has previously determined that no video poker machine may be utilized for play under Chapter 18C of the General Statutes; and "Whereas, since 2006, companies have developed electronic machines and devices to gamble through pretextual sweepstakes relationships with Internet service, telephone cards, and office supplies, among other products; and "Whereas, companies using electronic machines and devices for sweepstakes have sought, and received, declaratory relief from the courts; and "Whereas, such electronic sweepstakes systems utilizing video poker machines and other similar simulated game play create the same encouragement of vice and dissipation as other forms of gambling, in particular video poker, by encouraging repeated play, even when allegedly used as a marketing technique; and "'Whereas, it hath appeared to this General Assembly that the before recited acts hath not that good effect which was intended' (Laws of 1799, Chapter 12 ); Now, therefore," Session Laws 2010-103, s. 5, provides: "Nothing in this act shall be construed to make lawful any machine or device that is unlawful under any other provision of law. Prosecutions for offenses committed before the effective date of this act are not abated or affected by this act [December 1, 2010], and the statutes that would be applicable but for this act remain applicable to those prosecutions." Session Laws 2010-103, s. 6, made this section effective December 1, 2010, and applicable to offenses committed on or after that date. Legal Periodicals. - For article, "End of the Chase: Using North Carolina as a Guide for Ending Other States' Video Sweepstakes Legislative Merry-Go-Round in the Wake of Hest Technologies v. North Carolina," see 36 N.C. Cent. L. Rev. 41 (2013).