According to an article in the Smoky Mountain News, Representative Ray Rapp was so frustrated by the exploitation of legal loopholes to encourage gambling that he even considered banning all sweepstakes. "Every time we try to do this surgically... it's a challenge, [but] cooler heads prevailed."
What Are Sweepstakes Machines?
The way the North Carolina sweepstakes machines work is that people buy cards for internet time. Every unit of time that they buy is also a sweepstakes entry. The companies running the sweepstakes usually give away some free time, so that they can state that no purchase is necessary to enter. But remember that sweepstakes have to offer exactly equal odds with the non-purchase entry method (read Can Sweepstakes Give Better Odds with Purchase? for more details), and it doesn't sound like these machines did that.
The Advantages of Video Sweepstakes MachinesThe video sweepstakes machines became instantly popular, helping small business owners compete with big chain stores in their area and providing "up to 10,000 jobs during the ongoing economic slump," according to an Associated Press news article. Plus, there's a question of whether the government should be in the business of legislating morality, or telling adults what they can or can't do with their money. Is it really worse to spend money on alcohol than on sweepstakes entries?
The Disadvantages of Video Sweepstakes MachinesDetractors said that sweepstakes machines were a thinly-veiled form of unregulated, illegal gambling. Many of the people playing these sweepstakes machines are in a low-income bracket, and can't afford the loss. And debt from the sweepstakes machines can lead to crime, including the robbery of a Wachovia Bank, according to Representative Rapp.
What About Regulation of Sweepstakes Machines?Many people said that the sweepstakes machines should be allowed to operate, but be regulated by the state. The revenue generated by these machines could be shared with the state, and, like the North Carolina lottery, could be used for good causes, such as educational scholarships.
Lawmakers, on the other hand, felt that the time it would take to regulate the sweepstakes machines would take too long to implement. Regulation would have taken a year to implement, and in the meantime, the problems would have continued to spread.
What do you think? Does this kind of game fall under sweepstakes or gambling? Should the government really tell adults what to do with their money? Would waiting a year and regulating the sweepstakes machines have been a better option? Is there a significant difference between sweepstakes machines and under-the-cap promotions? Take my quick poll, and then click on the "comments" link below to share your opinion.
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