In March of 2012, the North Carolina Court of Appeals overturned a 2010 law that made certain online casino-style games – as featured in Internet sweepstakes cafes – illegal on the basis that the 2010 law was a violation of free speech, as protected by the First Amendment to the Constitution. In a recent ruling involving Telesweeps of Butler Valley Inc., a Pennsylvania District Court ruled that this type of gaming activity is not protected speech under the First Amendment.
These sweepstakes cafes usually feature rows of computer terminals that allow users to participate in several casino-style games in quick succession with the opportunity to win prizes. In exchange, users must pay the café proprietors for Internet access or prepaid phone cards. The payment element is what renders these sweepstakes cafes, or parlors, illegal in most states.
The Pennsylvania court concluded that if slot machines and other table games, generally speaking, are not protected speech, then simulated versions made available in Internet sweepstakes cafes are not either. It remains to be seen how the Pennsylvania ruling will affect the North Carolina deliberations (if at all, because they are separate jurisdictions), as well as similar legal contests currently underway in several states across the country. Gambling attorneys, sweepstakes attorneys, promotions attorneys and those interested in these fields should pay close attention.
As always, if you are interested in learning more about this topic or exploring your options in connection with these types of online sweepstakes offerings, please feel free to contact us.