Council poised to adopt restrictions on internet sweepstakes parlors
By Rochelle Moore
Published in News on March 12, 2017 1:45 AM
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News-Argus/SETH COMBS
A tenant space located at 706 E. Ash St. remains vacant after the city denied a permit for an internet sweepstakes business.
The Goldsboro City Council is positioned to adopt tighter restrictions for internet sweepstake parlors to regulate future locations in the city.
Ordinance changes would push the gaming parlors into a single zoning district, instead of several districts where they operate now. Site distance requirements would expand, and distance rules for nearby daycares, playgrounds and public parks would be added. New rules for the proximity of one sweepstake business to another are also planned.
The council has not discussed what considerations would be given for existing businesses and if they would be exempt from the new rules.
If the council decides to grandfather existing businesses, the businesses would only be subject to the new regulations if they close for six consecutive months, said James Rowe, Goldsboro planning director. Closings require a new conditional-use permit application.
Councilman Mark Stevens would like to see sweepstake parlors entirely banned from the city.
"These are establishments that are specifically gambling houses, and unless we are turning North Carolina into Nevada, we need to specifically say you cannot be within inside of the city," Stevens said, during a recent council meeting.
"The sweepstakes are something, I think, is a detrimental harm to our citizens. It's an addiction."
NEW RESTRICTIONS
Rowe presented recommended changes to the council, including a new a half-mile distance requirement that prohibits one sweepstake parlor from locating within a half mile of another.
Internet sweepstake parlors would also be required to locate at least 500 feet, an increase from the 200-foot rule, from a church, residential area and school. The distance requirement would also include locations near daycares, playgrounds and public parks.
Internet sweepstake businesses would be restricted to general business districts, instead of several districts, including shopping centers, where they can currently operate.
The ordinance change would prohibit the council from approving a conditional-use permit with modifications from the rules.
ONE-MILE RULE
Some members of the council, including Mayor Chuck Allen, have been interested in a three-mile distance requirement between the sweepstake businesses.
"I believe what we're hearing is everybody believes they're a detriment to the city, so, therefore, we need to make it as hard as we can," Allen said.
The city attorney said the restriction would essentially prohibit new openings. Some existing businesses are already within three miles of each other.
"If you're doing three miles, you're prohibiting them," said James Womble, city attorney with the Everett, Womble and Lawrence law firm. "I think you'll be open to a lawsuit on that."
Womble suggested the council approve the half-mile distance recommended by the planning director. The council decided instead to go with a one-mile distance.
Even though the council supports the changes, it will need to formally vote on an ordinance amendment. A draft ordinance detailing the changes may be ready within a month, Rowe said.
OPEN FOR BUSINESS
In Goldsboro, three internet gaming businesses are open. Since late 2016, the council has received five permit requests and approved three. One was withdrawn and one denied.
The most recent denial was surrounded by community concerns due to its location, at 706 E. Ash St., near the county health department, Herman Park and Goldsboro High School. The permit was denied after the location failed to meet site distance and parking lot requirements.
Another permit request for a vacant storefront, at 207 S. Berkeley Blvd., was withdrawn after concerns were raised by the public, including trash, loitering, noise and other problems within the Village Square shopping center.
Plans to open a new sweepstake parlor at 211 N.C. 111 South in the Southeast Plaza will not take place, after the property owner decided to lease the space to a different business, Rowe said.
Sweepstake gaming businesses currently open include locations at 1813 N. Berkeley Blvd., 1312 W. Grantham St., and 2922 B U.S. 70 West. Two have been open for months after previously meeting city standards.
A recently permitted sweepstake business is in the process of opening at 1716 U.S. 117 South, Rowe said.
STATE LAW
The internet gaming businesses, which started to increase across the state almost 10 years ago, came under fire after the N.C. General Assembly passed a law, in 2010, prohibiting electronic machines and devices for sweepstakes.
Cities and counties have handled the issue differently by allowing the businesses to remain open, with district attorneys and law enforcement requiring many to shut down.
The businesses previously operated in Goldsboro until the Wayne County district attorney warned of forced closure, in 2015, due to noncompliance with state law. Many closed and some were shut down by local law enforcement officers.
In late 2016, the city planning department started seeing a resurging interest with multiple permit requests over a short period of time. Business owners claim that new software has been added and is compliant with the law.
The city has been advised by its attorney that new permits can be issued as long as they meet city zoning regulations. The legal aspect of business operations is under the oversight of the district attorney, Rowe said.
STATE LAW
The legality of internet sweepstakes businesses continues to face challenges, as the Attorney General's Office continues to fight legal battles in an effort to uphold state law.
Business operators claim that updated software, which changes the games based on chance to ones that require skill, meets state requirements and details of the gaming machines written in the law.
"My overall understanding is that the courts have upheld the legality of G.S. 14-306.4, the 2010 law that was intended to prohibit businesses of this kind," said Jeffrey Welty, associate professor of public law and government in the School of Government at the University of North Carolina at Chapel Hill.
"However, the industry has responded by designing new products that -- depending on your point of view -- skirt or comply with the statute.
"The law enforcement response to this development hasn't been consistent, with some jurisdictions taking the position that the new machines are still illegal and others concluding that the machines are legal."