2012

NC Supreme Court issued the Hest opinion and the Sandhill opinion and said 14-306.4 was constitutional.  The Court said in Hest: “The General Assembly has chosen, through N.C.G.S. § 14–306.4, to address a specific type of sweepstakes operation that exploits a loophole in the state’s gambling laws but presents the same social evils as gambling, while deciding that the majority of sweepstakes operations (which do not pose the same risks) are legitimate marketing tools.”  It also said: “…the factual record here does not show whether the telephone or Internet time that sweepstakes participants purchase is ever used. Thus, legislative findings and common sense notwithstanding, we cannot on this record summarily conclude that these plaintiffs are involved in an illegal gambling operation that uses the sale of legal products as a pretext to avoid state gambling laws.”

Hest Tech case (Dec 2012) Research Sandhill Amusements Inc v State (Dec 2012)

NC Court of Appeals affirms the trial court in Hest case and said: “The trial court erred by only invalidating the single example of an entertaining display contained in subsection (i). Instead, the entire statute must be invalidated.”  In the Sandhill case, the Court of Appeals said: “Since N.C. Gen.Stat. § 14–306.4 has been declared void as unconstitutionally overbroad, the trial court’s order in the instant case must be reversed.”  So, Sandhill got its injunction back.  The State appealed to the NC Supreme Court.

Research Hest Technologies (Ct of App case) research Sandhill Amusements v State 734 (March 2012)

It appears video sweepstakes exploded as a result of the 2008 injunction and the 2009 injunction listed below. The argument is that no consideration is required to activate play and the consideration is paid for the product being sold, not gambling.