City of North Myrtle Beach asks for legal opinion on sweepstakes games

The City of North Myrtle Beach is asking state Attorney General Alan Wilson for his opinion on whether sweepstakes video machines are legal in South Carolina.

City spokesman Pat Dowling says the city planning department requested the opinion after it was contacted by a representative of Hest Technologies about opening a business in North Myrtle Beach in which the sweepstakes machines would be made available for public use.

According to the company's web site, the Hest Prepaid Planet Sweepstakes Management System is a "product and charitable promotional system for retail stores, featuring sweepstakes games." NewsChannel 15 attempted to contact a representative of Hest Technologies Monday for comment and we're waiting for a call back.

Video gambling machines have been illegal in the state since July 1, 2000, but the legality of the sweepstakes machines has not been established by state courts. Earlier this month, Wilson's office sent Beaufort County sheriff B. J. Tanner a 17-page opinion that concluded the attorney general "cannot resolve in an opinion the alleged illegality or legality of a specific machine," but added, "The South Carolina Supreme Court, as well as this office, has repeatedly said that any devices pertaining to games of chance are condemned."

Last month, Hest Technologies hired two Columbia law firms to do their own legal analysis of the sweepstakes games. The firms hired an Ohio electronic gaming consultant, Nick Farley & Associates, that has done work on gaming issues for the South Carolina Law Enforcement Division and the attorney general, to study the machines. Farley's conclusion, as spelled out in the law firms' legal memorandum, was that the Hest machines perform in a similar way as other legal sweepstakes. Farley concluded the machines are different than gaming terminals or slot machines because they don't accept or dispense coins or tokens, the software doesn't determine the gaming outcome at the player terminal and the program doesn't contain a random-number generator, like a video gaming machine.

Dowling says the machines are set up to allow a player to enter a sweepstakes via the Internet.

"You're either making a charitable donation or purchasing an item within a store where one of these Internet machines is located," Dowling said. "It's well crafted in that sense in that it skirts the law as it applies to slot machines. Whether or not it fulfills the law statewide has to be determined by the South Carolina attorney general."

Horry County solicitor Greg Hembree says the courts will ultimately have to decide whether the games are legal or not in South Carolina, though he says representatives from his office, the county's chief magistrate and County Attorney Arrigo Carotti reviewed the opinion Wilson provided Beaufort County.

"We're going to follow the lead of the attorney general on that," Hembree said.

Dowling said the City of North Myrtle Beach wants to be on solid legal ground before deciding whether to issue a business license to any entity that wants to use the sweepstakes games.

"They have not yet applied for a business license. I think they're first looking at where they would be positioned in terms of zoning and then, after we have a ruling, we'll let them know if they apply for a business license, what they can do."

What do you think about the sweepstakes machines? Should they be allowed?