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Wednesday, 28 March 2012 19:46

Macon’s highway paved in gold, is a gambling parlor paradise

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A huge former antique mall in Macon County will soon become the largest private gambling operation outside of Cherokee when Jokers Wild, a sweepstakes parlor featuring 65 video machines, opens next month.

And, there’s plenty of floor space left to double the number video terminals in the huge, rambling building, located just across the highway from the busy tourist hub Smoky Mountain Hosts.

Heading down the highway toward the Georgia state line, another operation with 30 of these Internet gambling machines will soon be rolled out. In all, there are about a dozen sweepstakes cafés — really, some of these are more like small casinos — operating in Macon County along the stretch of highway leading from Georgia.

Despite criticism that the sweepstakes cafes are simply out-and-out old-style gambling parlors, their popularity is undeniable.

“We’re adults; it’s our choice whether to play or not,” said Joe Donahue, a north Georgia resident who was at Deuces Wild on U.S. 441 one day last week with his wife. “It’s my money.”

By the looks of it, a lot of people feel the same way Donahue feels. This was early on a workday, and several customers were already inside playing. U.S. 441 regulars said that at night, the parking lots of these sweepstakes cafés are packed with cars. Many are reportedly coming in to play from Georgia, explaining the concentration of the sweepstakes parlor on the highway corridor just inside the North Carolina state line.

 

Legal machinations

More than 1,000 sweepstakes cafes are estimated to be operating statewide despite a ban by the General Assembly on video gambling. When sweepstakes machines appeared in the wake of the ban — looking for all the world like a reincarnation of the outlawed video gambling machines, despite owners’ claims to the contrary — operators of the machines and the General Assembly became locked in a game of cat and mouse, leading to a new state law that broadened the ban and, ultimately, lengthy legal challenges.

Continuing uncertainty about whether the state actually can prohibit these sweepstakes cafes, the state attorney general has recommended that law enforcement not shut them down for now.

A few weeks ago, a North Carolina Court of Appeals ruling, with one of three judges dissenting, found that the current state law prohibiting sweepstakes cafés is unconstitutional. This means these bigger sweepstakes cafes — maybe better termed sweepstakes cafeterias — could be just the beginning of what Macon County and other Western North Carolina communities can expect.

The N.C. attorney general’s office says it will appeal to the state Supreme Court.  

Sweepstakes cafés sell “time” to customers to gamble online or by cell phone. Customers, in return for whatever amount of money they care to risk, log on to their machine of choice and play for the allotted time purchased.

Sweepstakes café owners and managers argue that letting customers “find” cash and prizes via computers is simply buying and selling Internet or phone time — not real gambling, in other words.

Georgia launched a crackdown last year on certain “illegal” Internet cafes.

Under Georgia law, violators found to be operating illegally are typically charged with commercial gambling or for violating Georgia’s RICO Act for racketeering.

Some operators may have turned their sights to North Carolina.

Based on information gathered in the sweepstakes cafés and from names of permits on file with the Macon County Building Department, many of the gambling businesses in Macon County are, in fact, owned by Georgia residents.

 

Charge ‘em while you got ‘em

Towns across Western North Carolina have imposed steep business license fees on the sweepstakes parlors, hoping to make a little money off the lucrative enterprises operating within their borders.

Franklin recently increased its fees. Franklin charges $2,600 per Internet café establishment and $1,000 per machine. This is an increase from a flat $2,600 fee per business charged previously.

Town Planner Mike Grubermann said establishment owners are making enough money off the machines that even the new fees “are just a drop in the bucket.”

Grubermann said sweepstakes cafes in Macon County have become a major business enterprise.

“It seems like everybody has got to have sweepstakes machines now,” said Grubermann, adding that a dog grooming business in town recently added some “so that people can play while getting their dogs groomed.”

Unlike the town of Franklin, Macon County has no way to cash-in on these sweepstakes parlors, which mark almost the sole form of economic development taking place these days in WNC.

Maggie Valley and Canton currently both demand $2,500 for the first four machines and charge $750 for each subsequent machine. Maggie collects $8,250 a year, while Canton makes nearly $32,000 each year. Waynesville is looking to charge the same amounts.

Waynesville Manager Lee Galloway said the town’s attorney is preparing the necessary ordinance and that he wasn’t certain when the town’s aldermen would consider the law change. Galloway said a new ordinance might not take effect before July 1.

A sweepstakes poker café has opened on South Main in Waynesville with about 40 machines, but Galloway said at most, operations are still the three-or-four machine businesses located in service stations or similar establishments.

Not too long ago, however, two people came into Waynesville’s police department asking for permits to start operations with as many as 40 to 60 machines.

David Connell, who owns the building that has been rented outside Franklin for Jokers Wild, said he’s excited to finally have a renter onboard for the huge, former barn.

“It’s been sitting a year and a half empty. No one else could afford to rent it,” said Connell, adding that the owner of the future sweepstakes café expects to open sometime in April.

Jack Morgan, head of building inspections for Macon County, said the business owner would have to make the building handicap accessible and meet certain other requirements.

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