Sweepstakes halls may defy city zoning

Jan 01, 2013 (The Wilson Daily Times - McClatchy-Tribune Information Services via COMTEX) -- Internet sweepstakes businesses operating anywhere but within a heavy industrial zone today are in violation of city zoning laws and could face legal action.

Three sweepstakes businesses located in other city zones were open Monday and there was no indication they planned to close after the city of Wilson's Dec. 31 deadline.

City leaders adopted Internet cafe zoning rules in 2009 that allowed the existing businesses to remain but move to an I-2, heavy industrial, zone by the end of 2012. On Monday, Sweepstakes, at 507 Raleigh Road Parkway, was closed while Fish the Net Sweepstakes, at 2117 Forest Hills Road, Cyberlinks Internet Cafe Sweepstakes, at 507 Raleigh Road Parkway, and H&P Business Center, at 1301-G Ward Boulevard, in the Boulevard Plaza, were open.

Fish the Net plans to stay open and is fighting the recent ruling of the N.C. Supreme Court that upholds a 2010 ban on sweepstakes businesses. The H&P Business Center also plans to fight the statewide ban, which could be enforced by law enforcement on Jan. 3.

The Supreme Court ruling does not have any bearing on the city of Wilson's zoning rules, said Jim Cauley, attorney for the city of Wilson.

"The requirement that sweepstakes businesses may only operate within the I-2 zone as of Jan. 1 is based on the city's zoning ordinance," Cauley said. "This zoning requirement is not affected by the decision in the Supreme Court case, so to comply with the zoning requirements, all of these businesses will need to cease operations, except in the I-2 zone as of Jan. 1." An employee at Fish the Net said the business plans to remain open. The manager, Precious Batts, has not been available this week. Owners and operators of other sweepstakes businesses in the city have also declined to discuss their plans.

There are no notes on business doors alerting customers of permanent closings. The H&P Business Center has a note posted near the front door that alerts customers of a temporary closure on Jan. 2 at 11:30 p.m. The closing is due to the planned installation of new software the industry claims is compliant with state law. H&P is expected to be closed one to four days for the upgrade.

In an unrelated issue, H&P is also being sued by the city of Wilson for failing to pay close to $200,000 in Internet cafe fees, which include an annual $2,000 fee and $2,500 for each computer monitor. All other Internet sweepstakes businesses in the city have paid their annual fees, according to city records.

Fish the Net Sweepstakes has already installed the new software in its challenge of state law.

Fish the Net recently applied for a permit to move from Forest Hills Road into a building in the I-2 zone but the Wilson Board of Adjustment has delayed making a decision until its January meeting. The delay does not allow the business to remain open, said Matt Shaw, communications coordinator for the city of Wilson.

If any of the four sweepstakes businesses remain open after the city's Dec. 31 deadline, they will be sent a letter from the inspections department that could be followed with legal action and fines.

"Right now, the inspections department is planning on sending letters on Jan. 2, 2013 to all Internet sweepstakes businesses that are not complying with the city's regulations by being located in I-2 zones," Shaw said. "That definitely includes Fish the Net, which does not get a pass because it has a case pending before the Board of Adjustment. If it is operating in its Forest Hills location after the Dec. 31, 2012 deadline, it gets a letter." City statutes usually provide a grace period, of approximately 10 days, for people who do not comply to city zoning rules. If noncompliance continues, they become subject to fines and legal action, Shaw said.

Starting Jan. 3, sweepstakes operators could also face the enforcement of state law due to the recent N.C. Supreme Court ruling.

N.C. Sheriffs Association notified law enforcement officers across the state that they could start enforcing state law that outlaws video sweepstakes operations starting on Jan. 3. The Wilson Police Department has consulted with the state attorney general's office and the city's attorney to better define the response of city police to the recent N.C. Supreme Court ruling.

"The department will be working with the district attorney's office to decide if criminal charges should be brought after Jan. 3, 2013, against any local business," Shaw said.

The Internet sweepstakes industry plans to fight the statewide ban and businesses are installing new software said to be in compliance with state law because they do not include screens that let players know if they won the game through an "entertaining display." State law defines entertaining displays as prohibited in North Carolina.

rochelle@wilsontimes.com -- 265-7818 ___ (c)2013 The Wilson Daily Times (Wilson, N.C.) Visit The Wilson Daily Times (Wilson, N.C.) at www.wilsontimes.com Distributed by MCT Information Services

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