A white neon sign with a red “24/7” was the first indication that a sweepstakes was opening in my neighborhood. Soon, a green light bent into a shamrock was placed in the window of a once-dead retail space between a gas station and a dry cleaner. It was on: Our new local casino had plugged in gambling machines under the premise of selling phone cards. Sweepstakes were sprouting in strip malls all around Wilmington, with signs that offered business services and Internet time where the market had not previously demanded them. Most residents passed these new businesses without knowing what they were, but a few knew their true purpose. It was these people who came inside to play video games of chance.
I first entered the sweepstakes on a cold night in March 2010, when my housemate Geilda and I were walking home from downtown. We’d been at a party, interacting with people like us—mostly white folks, young and creative, poor in a way we assumed was temporary. We rang the bell to be let in (the sweepstakes kept its doors locked at all times), and once inside, our conversation stopped. It was 3 a.m., and a few silent women sat facing Pot-O-Gold machines. The childish noises of video keno dominated the room, creating a soundtrack of hope and disappointment. The desk worker who programmed my $5 onto a machine spoke softly, as if to avoid disturbing a room full of sleepers.
Geilda and I shared a machine and starting playing a game we didn’t understand. But the choices were simple enough—cash out or bet—and we went through a few rounds of lights and noises before our total spun $3 higher than where we’d begun.
“Cash out,” Geilda advised, and we did.
I came home feeling like I had escaped something that I didn’t understand.
Months went by and I kept visiting the sweepstakes. One summer afternoon, I went during daylight hours, before most people were off work. People seemed more alert than usual; two players even looked up and acknowledged me when I joined them at their cluster of machines.
I had $10 programmed on my machine. This was an increase from my original $5 limit, which I justified by reasoning that I needed more time to experience the game. I selected my numbers and adjusted my bet. The woman beside me, short-haired with cargo shorts and a tan that suggested a career in landscaping, told me the machines didn’t really pay out until you put in $80 or so.
I bet slowly so that the $10 would last longer. I got up by a few dollars and my machine made a thrilling, cartoon-fast counting sound. I cashed out. The man next to me voiced his support. “That’s good—your money still means something to you. After a while, it won’t.”
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The loophole that let machine gambling into my neighborhood was based on a legal argument that said if states allowed McDonald’s and Coca-Cola to give away products from pull tabs on French fry packages and the undersides of bottle caps, so too could small businesses use video gambling to promote their services. Under this justification, storefront after storefront opened in North Carolina with words like fax, phone cards and Internet written on their signage, while their interiors housed rows of Pot-O-Gold machines or computers installed with Internet gambling software.
Machine gambling was banned in North Carolina under the name of slot machines in 1937 and under the name of video poker in 2006. But the sweepstakes loophole, combined with the ability of software companies to update games faster than lawmakers could respond, created a boom in the late 2000s, culminating in as many as 900 storefronts housing thousands of machines across the state.The General Assembly banned the sweepstakes in 2010, with the N.C. Supreme Court upholding the ban in 2012 and again in 2015. The U.S. Attorney’s office recently prohibited five software companies from operating in the state, and Attorney General Roy Cooper maintains that the state has the legal authority to go after those that remain open. And yet the ban is unevenly enforced.
The industry has its friends, and it is persistent: Flush with cash, it continues to invest in legislative and judicial strategies aimed at legalization. Industry money played a role in the state’s 2012 elections—a dynamic Democracy N.C. executive director Bob Hall referred to as “pay-to-play politics.” Hall pushed the N.C. Board of Elections to investigate sweepstakes-industry campaign contributions, totaling millions of dollars, made to Gov. Pat McCrory and others. When the board ruled earlier this year that there had been no violations of campaign-finance laws, Hall pushed for a criminal investigation.Wake County District Attorney Lorrin Freeman agreed. With the help of the State Bureau of Investigation, Freeman is now probing the relationship between the sweepstakes industry and the state’s political leaders.
Even so, in 2015, three years after the ban was first upheld, sweepstakes locations still proliferate across the state. Each works a legal strategy supplied by a law firm or software company, and some post the latest order of injunction near their doors. There is a timelessness to the story, a sense that the sweepstakes just keeps going, a sense that a state’s and an individual’s choice of whether or not to collude with machine gambling isn’t much of a choice at all.
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The spread of sweepstakes was part of a national trend. Until the late ’80s, casino gambling was contained in America’s two major resort destinations: Las Vegas and Atlantic City. In the decades since, regional casinos have opened in many other states. A national conversation about the impact of this industry’s exponential growth in our culture and communities has never happened, and much of the research on gambling is funded by the industry itself.
When there is discussion of the pernicious effects of gambling, it typically occurs in the courtship between a casino and a state. Casino supporters point out the advantage of extra tax dollars, job creation and economic development in rural communities. Critics point out that a large portion of casino revenue, as much as 60 percent, comes from problem gamblers.
The sweepstakes model avoids this debate, enters without consent and reaps profits for as long as it can get away with it. When legislatures move to enforce existing gambling laws, the industry counters by offering a cut of the profits. The possibility of a legal partnership was raised in the General Assembly in 2009, when it was estimated that the state stood to gain $500 million. This figure was floated during a budget shortfall, from an industry that was proving difficult, if not impossible, to control.
Just as the sweepstakes conducted business in legal gray areas, they also contained moral and emotional gray areas. It was these complexities that kept luring me back. Sometimes I returned sure that the place was evil, or at least predatory, there to take advantage of people who were too stressed out making ends meet to resist the allure of a pretend bubble where work and money didn’t matter. Other times, I sympathized with its workers and the small businesswoman who ran the place, wondering if the harm it did might not be so bad.
I wanted to take a closer look to understand the pull of the place and find out what good it held, if any. I wanted to know why I could escape its magnetism but others couldn’t. And as North Carolina moved to eradicate sweepstakes across the state, I wanted to know if this removal was really a good thing—and to see who would miss it when it was gone.
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As I got to know the sweepstakes and its players that summer, I became curious about the owner, Linda. When I asked about her, employees pointed to a locked office door and explained that she wasn’t there much. In July 2010, on the night the state House passed the sweepstakes ban, there was a light on in the office. Linda was inside on the phone, discussing what to do if Gov. Beverly Perdue signed the ban into law, which everybody knew she would. That would mean five more months—from July to Dec. 1—before the sweepstakes would have to close its doors.
I sat at a machine tapping away $10 on a game of keno. Two young women played beside me. Both were still dressed in work clothes, one in a Hardee’s uniform and one in scrubs. They shared a machine and slowly lost a tiny sum of money.
For the first time, the office door opened and Linda emerged. She bustled past where I sat, hunched over and pushing buttons. “Where’s your enthusiasm?” she asked.
Perdue did sign the sweepstakes ban into law, of course. It was a decisive move in what one state representative called the game of “whack-a-mole” the industry played with the state. Each time the state pushed to ban the machines, and district attorneys and county sheriffs enforced the law through raids, the machines would show up again with new legal justifications and updated software.
The sweepstakes loophole has created opportunity through legal confusion across the country. In addition to North Carolina, at least a dozen states—including Florida, Ohio, New Mexico, Virginia, New York and California—have faced or currently face similar challenges. Several software distributors have become practiced at locating and exploiting vagaries in state laws, but also at building relationships with lawmakers.
Hest Technologies and International Internet Technologies are two major players that have made their way through North Carolina. Each has become embroiled in litigation involving multiple states. Chase Burns, the owner of IIT, was arrested in Florida after a scandal involving a fake charity and the resignation of that state’s lieutenant governor. Burns made the news in North Carolina, too, for being the largest individual donor to candidates for the General Assembly in 2012, and again for having ties to McCrory, who, prior to his election, worked for a law firm retained by Burns.
But it’s clear that costly litigation is worth the risk for owners and distributors. A low estimate for a single machine’s earnings is between $2,000 and $4,000 per week; some estimates go as high as $6,000 per day for a well-placed machine.
Video poker was successful in South Carolina, take-your-paycheck successful, and North Carolina lawmakers were wary when the machines first crept over the border in the ’90s. Authorities saw no difference between Pot-O-Gold machines and slot machines, but the industry argued that, because the game Pot-O-Golds were known for was poker, skill and dexterity were required elements of play. The skill argument didn’t hold, however, against the reality of players perched on barstools in the corners of gas stations, chain-smoking cigarettes and mashing the same two buttons over and over and over.
At the sweepstakes, jackpots worth up to $2,500 were the prize for depending on everything except oneself. Of course, almost no one ever won. But for habitual machine gamblers, jackpots were not the point. For folks captivated by machine gambling, winning big is less important than spending time on the machine. There is a certain state in which the game takes a player’s full attention to the exclusion of everything else. Jackie, a friend who developed an interest in sweepstakes around the same time I did, called this “the bubble.”
In North Carolina, the sweepstakes arrived as unemployment soared following the housing market crash of 2008. Over and over, patrons said they came to the sweepstakes “to relax,” and maybe it was relaxing to escape into a world where one’s value was not tied to work and where money didn’t matter.
Of course, not everyone will get stuck in a bubble in front of a gambling machine. The National Center for Responsible Gaming, which is funded by casino stakeholders, estimates the percentage of pathological gamblers among the general population is 0.6 percent, with a 2.3 percent incidence of problem gamblers. A 2013 paper by the Institute for American Values argues that a more accurate sample consists of people who gamble frequently rather than the general population. In this sample, the percentage of problem gamblers shoots up to 15 to 20 percent, and for people who gamble exclusively on machines, the number can be higher. This same paper estimates that 40 to 60 percent of casino revenue comes from problem gamblers.
But the NCRG’s minuscule figure paints a picture of an industry that is fundamentally harmless to all but a small group of people, people who have something wrong with them. It’s like the emphasis on consumer choice that Coca-Cola cites in its public statements on obesity: The solution is not just in getting soft drink companies to lower their caloric content, but in getting the consumer to make better choices.
But how much choice does a consumer have if a product or an experience is addictive? And where does culpability lie when products are designed and marketed to be as widely available and irresistible as possible?
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From Thanksgiving to the Dec. 1, 2010, deadline, a warm, friendly vibe prevailed at the sweepstakes. The place had a rare glow, and I took pleasure in the small talk—and my tiny keno wins. Or, I was becoming habituated.
Even Jay, a male desk worker, was nice to me. “Ah, the writer,” he said when I walked in on a Sunday night. Then he suggested that instead of writing about the sweepstakes, I write a book about him. “I’m smart,” he said, “but I was always doing other things.” He talked about how he couldn’t pass the reading and writing section of the GED, and how he wanted to learn all the words in the dictionary. And how, with the sweepstakes closing, he was about to need another job.
I played until I got up $13. Then I cashed out and went home.
When I stopped by on Nov. 29, Linda told me the plan was to let people play until 11:58 p.m. the next day, and then start to pack up the machines.
Linda had her office door cracked. She looked out at an employee named Vivian, whose expression was grim as she managed the desk. One more day until she lost her job. “I told them to put some money away and make arrangements for when this happened,” Linda said. “But nobody listened.”
But the next day brought a change of fortune. A lawsuit came through. Filed by Hest Technologies together with IIT, the suit argued that a sweepstakes ban was unconstitutional because it violated businesses’ First Amendment rights. The decision came from a Guilford County Superior Court judge, and it was enough to instill doubt in the minds of district attorneys about whether the sweepstakes ban was lawful or enforceable. The loophole would remain open.
Linda told me she got her information straight from the district attorney. She simply called him on the phone and learned that he felt the same doubt about the ban. She said he wouldn’t send police out until the law was clear.
That night, the sweepstakes felt festive. Linda announced three $50 drawings—instead of the usual one—and the place was packed. One of the regulars sauntered in and announced that he hadn’t seen the place that crowded since it first opened. The cigarette smoke was overwhelming.
Among players, some knew this wasn’t actually the last night. Some didn’t. The staff didn’t make a point to announce it; if they had, it’s hard to say what the overall reaction would have been. Most people focused on their machines and got lost in their bubbles.
The next morning, Dec. 1, Vivian let me in happily—victoriously. A cluster of women played in one corner. One of them came over for a refill, gave Vivian $80 and said, “Here you go, baby. Put all of it on there.”
But two hours later, Linda was getting a bad feeling. She’d been driving around town and talking on the phone with her distributor, and it seemed to them that her place was the only sweepstakes still open. Internet sweepstakes were running, but they were directly addressed by the new lawsuit, and it wasn’t altogether clear where that left Pot-O-Golds. Linda felt exposed, and if the DA decided to shut somebody down just to make an example, she felt that it would be her.
By late afternoon, Linda was dismantling her business. Vivian was quiet, hardly saying anything, just shaking her head. A few employees and a few regulars stood in clumps, unsure what to do. The place got quieter and quieter as Linda went around the room turning off machines and unplugging them from the wall.
One woman continued to play while a small group looked on. She was in her 60s, well dressed with good posture. She poked at a keno game, which was suddenly the most interesting thing in the room.
She handed Vivian some money for a refill and said aloud to her—or to Linda or to us, or to the state—”Let me just have my last little fun.”
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The next spring, I noticed a light on again at the sweepstakes. My friend and I rang the bell, and a new worker let us in. The lobby was dimly lit, and walls had been erected in the center of the room. A woman sat at the desk. She was overly friendly and slightly suspicious. When I asked about playing the machines, she presented me with a ledger, where I was to fill out my name and contact information. I asked about Linda, and she became friendlier. She said Linda was her business partner, but she now lived out of state.
I started to hand her $5, but she pointed me to the small, walled-off room and said I could put my money directly on the machines now. She opened the door for me and I saw a dozen Pot-O-Golds, even older than Linda’s previous models, packed into a warm little space. About 10 people played silently with cigarettes burning. No one was friendly.
I fed my $5 into an open Pot-O-Gold and played keno. It was the same thing: the bouncing balls and the bubbling sounds. There was nothing left in the place to make me feel anything but sad.
This article appeared in print with the headline “Our last little fun”
This story is excerpted from an article from The New South, a Chapel Hill-based publisher of long-form journalism. You can purchase the full version at www.newnewsouth.atavist.com/our-last-little-fun.
