The Internet Sweepstakes Café Conundrum
By Paul Gable and Jeffrey Sewell
The conundrum now engulfing the internet sweepstakes cafe issue around the state has had intricate twists and turns in the last several months.
Several key legislators told us recently that SLED chief Mark Keel was lobbying General Assembly members to close the “loophole” in the state law on gambling that allows sweepstakes games at food stores and fast food restaurants. The same loophole is being used by internet sweepstakes café operators to justify their business model.
After the General Assembly failed to act on any change in the law, Keel, using an opinion by Attorney General Alan Wilson, began raiding internet sweepstakes cafes and confiscating the computers on which the games were being played.
The machines are licensed and a fee charged on these computers by the Department of Revenue, just like other video games, jukeboxes, pin ball machines and the like. While Keel is raiding internet sweepstakes cafes, the state continues to issue licenses for the machines. They are part of the overall amusement machine industry throughout the state.
Why, if they are illegal, does the DOR continue to issue licenses for the machines?
While Keel and Wilson stand on one side of the issue, Keel’s predecessor Reggie Lloyd is defending some of the operators raided and has filed a lawsuit in federal court against the state and SLED for their actions.
Another notable jurist, Billy Wilkins, has successfully defended several internet café owners charged with operating illegal video poker games. For those of you who do not know of Billy Wilkins, he is a former solicitor in Greenville County, former U.S. Attorney and retired federal district and 4th Circuit Court of Appeals judge. It is safe to say Wilkins knows a little bit about the law.
It is interesting to note that SLED only stepped up its raids of internet cafes after Senate District 23 candidate Katrina Shealy was left off the primary ballot for failing to file paperwork properly.
In challenging incumbent Sen. Jake Knotts, Shealy has the support of Gov. Nikki Haley. Knotts receives contributions from the amusement machine industry. Could this be the real reason behind the raids?
The reason has to be something other than the law because, at best, it is extremely questionable that internet sweepstakes games will ultimately be found to be illegal. Keel was lobbying for a change in the law exactly for this reason.
What really needs to happen is for a test case to go before the S.C. Supreme Court where the judges can rule on the legality of the sweepstakes games.
However, in the interim, the state continues the raids while certain members of the media sensationalize the issue with comments about the “Lexington Ring”, a supposed cabal of gambling operators, law enforcement members and politicians.
Oh yes, you will always see Sen. Knotts mentioned personally in these articles with insinuation to his ties to illegal activities. No proof is given and none will be because it’s not there, but it does make for a sensationalistic, if totally inaccurate, form of journalism.