Internet cafe owners who offer internet gambling disguised as a sweepstakes are still in business after an Appeals Court ruling in their favor, this despite the state's attempts to shut them down.
North Carolina politicians passed legislation in 2010 that would ban the cafes from using an "entertaining display" to show results of the games. Two developers of the sweepstakes software sued, saying the law was unconstitutional. In the meantime the state allowed the cafes to continue running while the case was being decided.
In March, a North Carolina State Appeals Court ruled 2-1 in favor of the developers, saying the North Carolina law violated the First Amendment. Appeals Court Judge Ann marie Calabria said that the legislation could ban all video games due to the language of the law.
The case is not resolved however, as the state Attorney General is appealing the case to the North Carolina Supreme Court.
Reportedly there are between 700 and 800 internet sweepstakes cafes running across the state, generating between $500 million and $1 billion in revenues each year.
The premise of the internet sweepstakes cafes is that players buy computer time at the cafes, and redeem the prizes for cash after they are done. The cafes are very popular with females over the age of 40, who make up 80% of the industry's customer base in North Carolina, the Internet Based Sweepstakes Organization reports.