Merchants say patrons of the sweepstakes facilities have tried to use nearby furniture stores as their personal homes.
Ding ding no more.
Law enforcement officials are working to shut down a dozen “sweepstakes” and “adult gaming” facilities after an undercover operation revealed a majority of the businesses pay out cash to patrons. Undercover officers working with the Cherokee County Sheriff’s Office secretly recorded cash payouts at 11 out of 12 gaming establishments, then issued letters to business owners last week informing them to close or face criminal charges.
The undercover operations fell on the heels of a N.C. Supreme Court decision that ruled the internet sweepstakes system propagated by a company called Crazie Overstock LLC is illegal. Typically, these types of businesses allow patrons to win merchandise or points, which can then be traded or redeemed for cash.
Informally known by patrons as “Ding Dings” because of the lights and sounds associated with winning, these types of sweepstakes businesses have been operating in Cherokee County off and on for several years. Police have had difficulty keeping them closed due to ambiguity regarding how patrons earn awards.
Officials say the Supreme Court decision issued in June closes loopholes the businesses have been using to stay open. Therefore, even if the establishments discontinue cash payouts, they would still be considered illegal. Police gave the dozen facilities operating in Cherokee County until Thursday, Aug. 26, to close shop.
“By going this route, we're trying to give legitimate business owners a chance to liquidate their assets,” Sheriff Derrick Palmer said.
Video from an undercover operation, reviewed by the Cherokee Scout, shows the businesses operate similar to a legitimate casino with one glaring difference: many of the machines in sweepstakes facilities offer more than one game to choose from, while casino machines typically feature only one game.
Undercover video shows an officer playing a game similar to Wheel of Fortune before switching to a game similar to video poker. The officer plays the machine for six minutes before winning about $200.
When he’s done playing, the machine prints the officer’s earnings onto a voucher, which he gives to a store employee in exchange for cash.
“I talked to an establishment doing one of these [several years ago] and they had three machines turning $10,000-$20,000 a week,” Chief Deputy Joe Wood said.
In addition to capitalizing on greed and desperation, the gaming facilities draw an unsavory element. Business owners located near these types of establishments told the Scout they often witness drug deals and find hypodermic needles on their property.
Merchants say patrons of the sweepstakes facilities have tried to use nearby furniture stores as their personal homes and often ask others for money or food. At the gaming locations that remain open around the clock, “It’s like an overnight party,” according to local merchants, who say they consistently find trash outside their businesses each morning.
This year alone, police and emergency medical personnel have responded to these gaming businesses a combined total of 211 times, according to data provided through a public records request.
“Our drug guys can’t work on other things in the county because they’re having to watch several of these places 24 hours a day,” Palmer said.
There are 12 known standalone sweepstakes facilities in Cherokee County. However, a handful of gas stations have a gaming machine or two inside.
Officials say the gas stations that possess them have already unplugged their gaming machines. Several of the standalone sweepstakes locations continued to operate over the weekend after police issued notices to close.
Business owners who continue to operate sweepstakes machines in the county after Aug. 26 could be charged with a misdemeanor for the first offense, with subsequent offenses resulting in felony charges.