North Carolina The Latest State To Decide Fate Of Sweepstakes Casinos

Article by : Erik Gibbs Jan 2, 2025

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The North Carolina Court of Appeals has ruled against No Limit Games, a sweepstakes operator challenging restrictions on its machines in Robeson County. In a 2-1 decision, the court determined that the company’s video sweepstakes games violate state law, reversing an earlier ruling that had temporarily blocked enforcement of the ban.

The case stems from a legal dispute between No Limit Games and both local and state authorities. The company filed a lawsuit in May 2023, arguing that its games should be considered legal under state law.

A lower court granted No Limit Games an injunction, effectively halting prosecutions related to its kiosks. However, the Appeals Court overturned that decision, citing prior legal precedents that classify such games as illegal under North Carolina’s gambling laws.

Judge Toby Hampson authored the majority opinion, comparing No Limit Games’ kiosks to previous cases involving similar sweepstakes systems. Hampson noted that while the games involve some elements of skill, the outcomes are primarily determined by chance. He emphasized that North Carolina’s legislature explicitly outlawed these types of electronic sweepstakes to prevent the gambling-related issues they could foster.

Hampson’s ruling aligns with previous decisions in the state’s courts, which have consistently upheld the ban on video sweepstakes machines. The law, enacted in 2010, was designed to close loopholes that allowed sweepstakes operators to bypass restrictions on video poker and similar games.

In dissent, Judge Jefferson Griffin expressed a different view, arguing that No Limit Games’ systems elevated skill over chance, potentially bringing them into compliance with the law. Griffin believed the trial court was correct in granting the injunction, as it would protect the company from undue harm while the legal dispute continued.

The case highlights the ongoing tension between sweepstakes operators and North Carolina officials. The state Department of Justice has been steadfast in its enforcement of the 2010 ban, frequently countering attempts by operators to reframe their games as legal.

State lawyers pointed to several court rulings, including a 2022 Supreme Court decision, as evidence that sweepstakes systems are inherently illegal when chance plays a significant role in determining prizes.

No Limit Games maintains that its systems differ from previously banned sweepstakes setups, arguing that skill is the predominant factor in determining outcomes. The company’s attorneys have called for a game-by-game analysis to demonstrate their legality, a request the courts have not accepted.