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S.C. lottery and electronic sweepstakes on collision course

Sep 29, 2011, 9:03 am

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South Carolina Lottery

South Carolina retailers who offer electronic sweepstakes to customers are feeling jittery.

That's according to one member of the S.C. Education Lottery Oversight Committee , a panel made up of state legislators and members of the public.

"The question is, are electronic sweepstakes legal in South Carolina?" said Alexander Shadwick, after Tuesday's meeting.

"They don't know if the games are legal or illegal, so the courts have to decide," he said.

"But it scares all the retailers."

Shadwick likened the activity to using coupons or putting in $20 and purchasing songs on iTunes while also being entered into a contest.
This month The State newspaper quoted the S.C. State Law Enforcement Division chief announcing a renewed effort to combat illegal video poker games. The industry was banned in 2000 but frequently arises in legislative debates about relaxing the state's restrictions on raffles.

During Tuesday's committee meeting, Paula Harper Bethea, the executive director of the S.C. Education Lottery, shied away from the suggestion that she was targeting "sweepstakes" in a warning she issued to retailers.

"I've heard the whole sweepstakes-game talk, frontwards, backwards, and that's not for me to decide," she said.

"A magistrate in South Caroline ultimately has to decide that. ... What I do enforce, however, is who sells our lottery products."

She said she has been working with lottery officials in Georgia and North Carolina on how to address the effects of Internet gaming on state-run lottery programs.

Director's letter draws fire

In May, Bethea sent a letter to the state's 3,700 ticket retailers to warn them that the agency could revoke or suspend their lottery license if they violate state laws.

Al Shadwick, a Seneca businessman on the lottery oversight committee, said Wednesday that Bethea's letter is "overreaching" and that it frightens retailers who have electronic sweepstakes games at their stores. He said he wonders if the motive behind the letter is to make sure that sellers of lottery tickets don't offer any other games for customers to spend their money on.

Bethea's letter was sent to all the state's lottery retailers in May, but was questioned by Shadwick this week after a meeting of the S.C. Education Lottery Oversight Committee.

Bethea's letter suggests that the lottery retailers with games in their stores may want to check with law enforcement officials or attorneys to make sure that the gaming machines they have are legal.

"Which amusement device, if any, you choose to place in your store is solely up to you," Bethea wrote. "I am not asking or telling you to remove any particular machine. However, I must decide with whom (the lottery) does business, and I am solely responsible for deciding when the South Carolina Education Lottery's integrity and reputation are negatively impacted by machines found to be illegal in outlets licensed to sell lottery products. Even though you may not be charged individually, if a local judge finds a machine to be illegal, your lottery license is subject to suspension or revocation."

Shadwick is a member of the lottery oversight committee, which is made up of legislators and residents. He said he has received several calls from retailers who are worried that they could lose the option of selling lottery tickets just because they have electronic sweepstakes games.

Shadwick said those sweepstakes games are different from video poker machines, and offer players coupons or codes to download songs.

"They get those coupons or codes even if they don't get an instant win," Shadwick said in a Wednesday interview with the Independent Mail. "This is really a question about whether electronic sweepstakes games are legal or illegal, and that is something that should be left up to lawyers to argue and judges to decide."

In Anderson County, Sheriff John Skipper said he is working with officials from the South Carolina Law Enforcement Division "to determine which games are allowable and which ones are not."

Shadwick said he would like for the lottery's executive director to leave matters of law to law officers.

"She's threatening to pull out the terminals if the games are found illegal, but this is really a magistrate court issue. Of course, these retailers aren't going to keep machines in their stores that they know to be illegal.

"I think ... Paula may feel like these sweepstakes machines are going to hurt lottery sales, but clearly, they do not," Shadwick said. "I think this letter brings up things that definitely don't have anything to do with the lottery."

Bethea defended her letter Wednesday.

"What the letter says is that if you are found guilty of having an illegal gaming machine, then your lottery license could be in jeopardy," she said. "I stand by my decision to send the letter. ... I have to protect our integrity."

She said that the letter in no way hurt retailers. She said that it is up to a magistrate to decide what is illegal and what is legal, and that her letter in no way purports to make that decision.

"What if I didn't say something to our retailers?" she asked. "I am not telling them what is a gaming offense and what isn't. What I am saying is this: Get an opinion."

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