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News Lawsuit filed in sweepstakes crackdown

Despite the December state Supreme Court ruling to uphold North Carolina's ban on sweepstakes machines, the games are still being played on uncertain legal terrain. On May 5, Michael Macke, owner of Gift Surplus, LLC, filed civil summonses against regional officials including Macon County Sheriff Robbie Holland, Highlands Police Chief Bill Harrell, Sylva Police Chief David Woodard and District Attorney Michael Bonfoey.

Macke's complaint comes after his business was affected by the closing of sweepstakes establishments in Jackson and Macon counties. One of his customers, Mark Berry of Macon County was found not guilty of four misdemeanor charges of operating a sweepstakes machine in violation of the law. District Court Judge Donna Forga, ruled in favor of Berry, citing his machines, provided by Gift Surplus, LLC, were, in fact, legal and not in violation of the law.

Sheriff Robbie Holland stands by his office's actions.

“As I have stated in the past, we have nothing to gain by the outcome of any case involving poker machines except the fact that we did our job when we acted upon a citizen’s complaint,” said Holland. “The complaints have been investigated and after conferring with the district attorney’s office the decision was made to prosecute. The problem how I see it is that members of our legislature have created laws that are so vague that law enforcement and judges from across the state appear to differ by what is legal and what is not when it comes to poker machines.”

Records on file at the Macon County Clerk of Courts office list Gift Surplus, LLC as a business that licenses kiosks containing computer hardware and software to retail establishments in North Carolina for use by retail stores. The Gift Surplus kiosk is a stand-alone, computer-based kiosk that is not connected to a server and allows customers to purchase dollarfor- dollar gift cards that can be used to purchase consumer goods on a website owned and operated by Gift Surplus, LLC.

Macke's lawyer, George Hyler of Hyler and Lopez, P.A. in Asheville, stated in the civil summonses that although gambling in North Carolina is generally prohibited, the state has long permitted businesses to market and promote the sale of their products through the use of promotional sweepstakes. More particularly, sweepstakes are specifically allowed under the most recent gaming statute, North Carolina General Statute 14-306.4, which went into effect on Dec. 1, 2010.

The court documents claim that Gift Surplus is consistent with state law and utilizes a promotional sweepstakes program developed for the purpose of marketing and promoting the sale of gift cards that can be used to purchase other consumer goods online.

Retail establishments in Macon County like Highlands Wine Cellar and Cigar have used the software provided by Gift Surplus.

The civil summonses explain that customers may obtain free entries into the sweepstakes by a number of methods, which are on display on each Gift Surplus kiosk. If a customer purchases dollar-fordollar gift cards for the machines, they are also given free entries into the sweepstakes, based on how many gift cards were purchased. Customers may determine if they are winners by playing a video game on the kiosk. According to the court documents, each game requires skill and dexterity by the customer to realize a prize from the sweepstakes.

Because machines provided by Gift Surplus offer free entry into the machines, are not defined as a lottery and the games require skills, and customers are provided gift cards for each and every dollar deposited into the kiosk, Macke and his lawyer believe the machines are in full compliance with the law.

The civil summonses tout the legality of the Gift Surplus machines and intend to promote the operation of the machines at establishments in Macon and Jackson counties. The documents cite Gift Surplus machines being located at a business in Highlands owned by Fred Bowers and P&J Food Mart in Sylva owned by Gregg Hildebrandt.

The civil summonses claim that Macke's human rights and property interests will be irreparably harmed and injured by the defendant's law enforcement actions of prohibiting his machines to be placed in local businesses.

Sheriff Holland hopes that the court will be able to make a more sound ruling that his office and other law enforcement agencies in the state can follow.

“I have maintained that there are much greater issues that we need to be addressing than poker machines, but we had a duty to investigate allegations and a duty to act,” said Sheriff Holland. “My officers and I acted in good faith. We treated all parties involved with dignity and professionally. When we could have legally seized numerous machines during the arrests, we only seized one from each location. Until the legislature can come up with laws pertaining to the poker machines that are clearly understood, we will maintain our stance and allow lawyers to fight it out in court and allow judges to make the ultimate decisions. Meanwhile, I continue to stand by the decisions I have made and stand behind the actions of my officers 100 percent.”

A court date for Monday, May 13, has been set to hear Macke's case for a preliminary injunction to allow his machines to operate in Macon and Jackson counties.

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