Sweepstakes seem to have first amendment protection
Some of the operations, such as those that call themselves “sweepstakes” are entirely unregulated. They are not inspected, licensed or in any other way supervised by the state.
This week Seabrook issued a cease-and-desist order to one of these operations, 3D Business Center, for allegedly misrepresenting itself as a “business center fax, photocopy and Internet center,” town officials said.
The owner of the Seabrook business opened a similar operation at Portsmouth’s Heritage Common on Lafayette Road this week, complete with 40 sweepstakes terminals.
“They are not illegal because of a nuance in the law that allows them,” said Paul M. Kelley, director of the New Hampshire Racing and Charitable Gaming Commission, who estimated there are 14 other similar businesses in the state. “My concern with them is the general public is not protected adequately. The public has a perception they’re regulated like charitable gaming establishments, and they are not.”
Whether charitable gaming is adequately regulated in New Hampshire is a story for another day. However, at least with charitable gaming the state has three inspectors, three auditors, runs background checks on gaming operators, receives a licensing fee and charities are supposed to receive 35 percent of the take. None of those protections or public good apply to these sweepstakes operations.
How much money can they make? Kelley said the Elks Lodge in Nashua has five machines and during a five-month period, after payouts, made more than $70,000. That’s $14,000 a machine in that five-month period or $2,800 per machine, per month. If the Portsmouth operation has 40 machines, that would net the owner $112,000 a month or $1,344,000 per year. No wonder these operations are spreading like wildfire across the state and nation. Kelley said it’s likely that operations open to the public make far more money than a fraternal organization such as the Elks.
Fortunately, the Legislature has gotten wind of the new sweepstakes craze and is looking to either regulate them or close them down.
“I have no doubt that this is gambling,” said state Sen. Bob Odell.
The Senate on Thursday added language to a gaming bill that would expand the definition of a gambling machine to include sweepstakes terminals. The House is also expected to approve the sweepstakes language.
Making this law stick may be a tougher battle than it would seem. Other states have tried and failed to shut down sweepstakes operations, which argue they are no different than games routinely run by McDonald’s and Publishers Clearing House.
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New Hampshire is at a crossroads with gambling. Right now we have the worst of both worlds: A growing number of unregulated sweepstakes operations and under-regulated charitable gaming with very little public benefit. The status quo isn’t working for anyone but the game operators.
When Gov. John Lynch promised to veto efforts to expand gambling in the state, he said one thing he had been told by governors in other states is that you cannot allow gambling without a strong regulatory structure in place. New Hampshire’s laws are not ready for gambling. Its regulators are understaffed and underfunded and its enforcement abilities are feeble at best.
Seacoast Media Group has long opposed gambling, largely out of fear of the corruption it would bring to the state. And we continue to believe gambling is not the New Hampshire way. But right now we are like the woman who tells herself she’s only a little pregnant. As a state we need to either ban all gambling or put a robust regulatory structure in place that will guarantee the maximum public good comes from this risky business.
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