Sweepstakes machines: why's it so hard to figure out if they're legal?

Some towns are saying no to video sweepstakes machines. Last week, Georgetown City Council passed a moratorium on business licenses for any new machines until their legality is settled.

Video gambling machines have been illegal in the state since 2000, but new machines that seem to skirt the law are popping up in many towns.

The legal status of the machines is in question, with some magistrates around the state ruling that the sweepstakes games are illegal gambling devices. Others, including the former director of the South Carolina Law Enforcement Division, say the machines are within the law.

Horry County solicitor Greg Hembree said the justice system is getting closer to working out a statewide solution.

Hembree said the problem is that the games' manufacturers have figured out how to tweak the machines' programming with just a few keystrokes, to make them appear legal.

"That's the reason it's difficult, is really the technology is outrunning the legal system," Hembree said.

Hest Technologies, one company that sells many of the sweepstakes games, says the machines are essentially Internet terminals and since they don't accept or dispense coins or tokens and don't determine a gaming outcome at the terminal, they're legal.

Hembree disagrees. "People are risking money, putting it in a machine in one form or another, with the hope of getting more money back. If that's not gambling, I don't know what is."

So far, cities and counties have had to make judgements of their own on the legality of the machines, but Hembree said the state is going back to the same enforcement model it used with video poker in the 1980's and 90's.

He said the State Law Enforcement Division will handle investigation and the attorney general's office will argue cases in court. Hembree said that system will work.

"Otherwise, you end up with 46 counties in South Carolina with 46 different answers or slightly different answers. This way, you've got everything being channeled through one gateway."

Hembree said it's almost certain the state Supreme Court will rule on the legality of the machines and the legislature may be forced to tighten the law.

Until then, he said it's probably a good idea for towns to put a moratorium on any new business licenses for the machines until their legality is worked out. He said that strategy would be best, not just for the communities, but for potential video game operators, who might want to put much of their time and money into a business that could someday be deemed illegal. "So you're really saving that local business owner from himself, from taking that unreasonable risk. I think it's good policy."