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Another ruling goes in favor of sweepstakes industry

Internet sweepstakes games are still being played on uncertain terrain in North Carolina, where conflicting court rulings and pressure to step up law enforcement are sending mixed messages.

On Thursday, Macon County District Court Judge Donna Forga found a convenience store owner, Michael Berry, not guilty on four misdemeanor charges of operating a sweeps machine at his store in violation of state law.

Earlier this month, a district court judge in Catawba County acquitted a convenence store employee who had been charged after police raided the business.

First criminal case in internet sweeps ends in acquittal

The internet sweepstakes industry group that is pushing to legalize the games in North Carolina is claiming a small but potentially important victory. A judge in Catawba County has acquitted a sweeps café employee in what the industry says was its first criminal case in the state.

The decision came on Wednesday, the same day that a bill was filed in the state legislature to regulate and tax the games, which have been the subject of legal disputes for years now. The N.C. Supreme Court upheld the state’s ban in December, but a coalition of sweepstakes machine providers has been working to change the law.

The effort suffered a setback when a major supplier of gaming software – who was also a major political contributor and game supplier in North Carolina – was charged in Florida with racketeering related to misstating where the profits go.

In Catawba County, a district court judge acquitted a Circle S Depot employee who had been charged after police raided the store, according to The Hickory Record.

Her attorney, Lisa Dubs, argued that the way the games were set up did not violate the law because the prize is revealed before the game is played instead of after.

“We are pleased that the judge agreed with our position – that the pre-reveal software does not violate NC statute,” Dubs said in a statement released by the coalition.

Morning Memo: McCrory closes Latino outreach office

North Carolina’s Latino advocates are voicing alarm following the governor’s decision to eliminate the state’s office for Latino affairs. The closing of the Office of Hispanic/Latino affairs was sudden and caught many by surprise. The move appears to have exacerbated the already tense relationship between Republican Gov. Pat McCrory and the Latino community, including criticism over a driver’s license plan for young immigrants.

Advocates says it sends a message that McCrory and Raleigh conservatives are less concerned with the needs of the Latino community. Paradoxically, it comes at a time when issues of deep concerns, like immigration, are at the political forefront and Republicans nationally are trying to appear more welcoming to Latinos.

***Thanks for reading the Good Friday edition of the Dome Morning Memo. Send tips and news to dome@newsobserver.com. More on the Latino office and other big headlines below.***

Morning Memo: Another big day at the statehouse, gambling money purge continues

TODAY AT THE STATEHOUSE: Another big day at the legislature as the legislative session nears the half-way mark and the bill filing deadline. 10 a.m.: The Senate Education Committee considers a bill to take charter school oversight authority away from the state's Department of Public Instruction and loosen requirements on the schools. Noon: House Public Utilities considers bill to stifle the state's consumer advocacy group. 1 p.m.: House Elections Committee will discuss repeal of campaign finance matching money for candidates, a measure included in the governor's budget. The committee sent a notice that the voter ID measure is on hold temporarily so it can consider other legislation, a reversal from what lawmakers planned. At the same time, the Senate Finance Committee will begin talk about taxes with discussion of a bill to reduce the burden on businesses but no votes are expected. 2 p.m.: The Carolina Panthers bill is on the House calendar. The Senate convenes simultaneously with no major bills on the desk.

Today, Gov. Pat McCrory sticks to his comfort zone for another address to another business group, this one is the N.C. Chamber's annual conference in Greensboro. Later in the day, he'll meet privately with the N.C. Sheriff's Association.

GAMBING MONEY PURGE CONTINUES: As the Morning Memo reported Tuesday, McCrory forfeited campaign contributions from a second sweepstakes company executive charged in an gambling ring. And as AP found, the purge is likely to continue: McCrory received another $8,000 in October from John Patrick Fannin and his wife, who live in Little River, South Carolina, according to records reviewed by The Associated Press. Fannin is also among the sweepstakes operators indicted by Florida prosecutors in the Allied Veteran's case. (A McCrory spokeswoman) said McCrory's campaign will review those donations, too.

***Thanks for reading the Dome Morning Memo. Send tips and news to dome@newsobserver.com. Much more N.C. political news and analysis below.***

Morning Memo: Another gambling bust with N.C. ties; Hagan remains against gay marriage

ANOTHER GAMBLING BUST WITH N.C. TIES: On the same day Florida prosecutors busted a gambling operation that snared a company with major North Carolina political ties, an Ohio prosecutor leveled a new indictment against another sweepstakes company with Tar Heel ties.

The March 13 superseding indictment updated charges filed in May against VS2 Worldwide Communications, a company that operated illegal Internet sweepstakes gaming software, according to local news reports. The company's owners, Phillip Cornick of New Jersey and Richard Upchurch of Ramseur, face charges in Ohio of money laundering and engaging in a pattern of corrupt activity.

The two men and their wives contributed more than $45,000 to North Carolina political candidates -- including Gov. Pat McCrory -- with more than half coming after their initial May indictments.

HAGAN ONE OF 11 SENATE DEMOCRATS NOT TO ENDORSE GAY MARRIAGE: North Carolina's Kay Hagan remains opposed to gay marriage, even though three prominent Democrats colleagues recently shifted their stances. The U.S. Supreme Court will hear arguments Tuesday (California's Proposition 8) and Wednesday (the Defense of Marriage Act, or DOMA) about same-sex marriage.

**More on the VS2's campaign contributions and Hagan's stance on gay marriage below in today's Dome Morning Memo. Sends news and tips to dome@newsobserver.com. Thanks for reading.***

More trouble for the internet sweeps industry

The AP’s Michael Biesecker has dug up an interesting follow to the internet sweepstakes case out of Florida that involves a major campaign contributor in North Carolina. This week the sweeps café industry vowed to continue to push for legalization in this state.

Here’s how it starts:

ST. AUGUSTINE, Fla. -- Fresh off a nearly $300 million racketeering case involving a veterans' charity that benefited from simulated gambling at Internet cafes, Florida regulators will investigate a children's cancer group connected to a similar operation that is four times bigger.

The new probe comes in response to Associated Press inquiries about Children's Cancer Cooperative, a group that operates out of a South Carolina bingo parlor, shares a lawyer with Allied Veterans of the World and has collected cash from more than 200 of the sweepstakes cafes in Florida.

In exchange for the money that has flowed into the Children's Cancer Cooperative from the cafes, the charity's name is listed as sponsoring sweepstakes prizes offered at the cafes, giving players the impression money lost on the fast-moving games mimicking Vegas-style slots goes to help sick kids. ...

Records found by the AP show the Children's Cancer Cooperative was registered in Florida in 2009. It is also registered in at least six other states where sweepstakes games are popular — Texas, Alabama, North Carolina, Kentucky, Virginia and Iowa.

Internet sweeps industry not ready to give up

A group representing the internet sweepstakes industry is still hoping to convince the General Assembly to legalize and regulate the games, despite last week’s arrest of a major machine supplier in a Florida gambling investigation.

The Electronic Sweepstakes Coalition is trying to convince legislators to file a bill that would regulate and tax the games. A news release it issued Thursday says the bill should include criminal background checks, licensing procedures and strict regulations on the machine software and locations.

“Thousands of people rely on jobs provided by this industry and they should not be penalized for the actions of a few that happened in another state,” the release says.

Morning Memo: Rare session at Capitol, more fallout from tainted donor

UPDATED: TODAY AT THE STATEHOUSE: The House and Senate convene this evening in the old legislative chambers at the Capitol to commemorate the 10th anniversary of the recovering of the N.C. Bill of Rights after a Union soldier took it during the Civil War. Gov. Pat McCrory will attend a reception for the event earlier in the day.

McCRORY DISTANCES HIMSELF FROM TAINTED BURNS MONEY:From AP: North Carolina's governor says he had no contact with a campaign contributor who faces racketeering charges in Florida over illegal gambling. Gov. Pat McCrory said Friday he had never heard of Chase Egan Burns, the Oklahoma man accused this week of owning gambling parlors operated by Allied Veterans of the World. Prosecutors say the purported charity earned about $300 million from illegal gambling, with only about 2 percent actually going to veterans. McCrory's campaign has purged itself Wednesday of $8,000 in contributions made in October by Burns and his wife, sending the money to a Durham charity. "I wouldn't know him if I saw him," said McCrory, a Republican. "I think we got it (the checks) through the mail."

***Thanks for reading the Dome Morning Memo -- a roundup of North Carolina political news and analysis. Send news and tips to dome@newsobserver.com. Click "Read More" for more.***

Morning Memo: Gambling probe has NC ties, Tillis joins ALEC board

MAN AT CENTER OF GAMBLING INVESTIGATION HAS N.C. TIES: An Oklahoma technology company owner who is caught up in a massive investigation into illegal gambling has been a key player in North Carolina’s elusive video sweepstakes games, and has been a generous political contributor. Chase Egan Burns, 37, faces charges in Florida that include racketeering and conspiracy, according to The Associated Press. Burns was arrested Tuesday. Court documents say Burns claimed money put into his gambling machines would be donated to Allied Veterans, but the group received less than 1 percent of the proceeds, The AP reported.

Burns is the owner of International Internet Technologies, which reportedly has more than 100 licensees in North Carolina that employ about 1,100 people. Burns has made $154,000 in campaign contributions in recent years to state political candidates of both parties -- including Gov. Pat McCrory -- and to the state Republican Party.

THOM TILLIS JOINS ALEC BOARD: House Speaker Thom Tillis recently joined the American Legislative Exchange Council's board of directors. "I've been a member for several years and it's a great organziation. I think it's a great colaboration between legislators and businesses. They asked me if I would serve I told them I would happy to," he said in an interview. ALEC is a free-market organization that crafts "model legislation" (such as the controversial "Stand Your Ground" law) by putting corporate representatives and state legislators together. Critics - object to the secrecy of the process and say big business is buying access. Tillis dismissed any concerns about the group, comparing it to the National Conference on State Legislatures. "If you look at most the legialtion that moves through ALEC, a lot of it has it's roots in some other legislative body," he said.

***Good morning. Welcome to the Dome Morning Memo -- a one-stop-shop for North Carolina political news to start the day. Send news and tips to dome@newsobserver.com. Much more below. ***

Internet sweeps industry hopes to play another hand

The internet sweepstakes industry won’t fold 'em.

The companies that provide the software for the machines in Internet sweepstakes cafes say a bill will be introduced that would freeze the 2010 law that sought to outlaw that kind of gambling.

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