After a jury convicted Kawana Spruill and
Richard Conoley Chapman of "violating North Carolina General Statutes §14–306.4 (`Electronic
machines and devices for sweepstakes prohibited’)”, they appealed. State v. Spruill, 765 S.E.2d 84 (North Carolina Court of Appeals 2014).
The
Court of Appeals begins its opinion by explaining how the prosecution arose:
The evidence
presented at trial tended to show that Chapman was the owner of Past Times
Business Center (`Past Times’), an internet café, located at 2100 St. Andrews
Street, Tabor City, and defendant Spruill was the manager. An undercover
officer with the Tabor City Police Department went to Past Times to determine
if the café was operating an electronic sweepstakes in violation of N.C.
Gen.Stat. 14–306.4.
The undercover
officer testified that he went to Past Times on 11 April 2013, equipped with a
surveillance camera. The surveillance video was played for the jury while the
officer narrated.
The officer
presented the cashier with $25.00. The cashier presented the officer with
a disclaimer which states, in part:
`I understand that
I am purchasing computer time to be used at this location. I also realize that
I can request to participate in the promotional game for free. . . .
...
I understand that I
am not gambling. I am playing a promotional game in which the winners are
predetermined. The games have no effect on the outcome of the prizes won.’
The undercover
officer played internet games with the names `Keno,’ `Lucky's Loot,’ Lucky's
Loot bonus round named `Pot O'Gold,’ `Lucky Sevens,’ `Lucky Ducks,’ and `Lucky
Lamb.’ The undercover officer testified that his understanding was `[y]ou cannot
win any more money than what it says you're already going to win before the
game starts. So it's irrelevant what you click on.’
The lead
investigator, Detective Sergeant Bruce Edwards, testified that Past Times'
electronic games used a pre-reveal system. The pre-reveal system showed the
prize amount the patron would win prior to the patron playing a game. Once the
game was completed, the prize amount revealed prior to the start of the game
would be displayed again.
Kevin Morse, a
representative from the video game manufacturer Figure Eight, testified that
the software used to make the electronic games available in Past Times was
developed and controlled by Figure Eight and that Past Time paid a user
licensing fee to access the games via the internet. Morse distinguished a `true
sweepstakes,’ where the prize is revealed after the game is completed, from the
electronic games used in Past Times, where the prize is revealed before a game
is played.
At Past Times, the
patron has the option of whether to play the game after the prize has been
revealed. If the patron does not timely choose to play a game, the system
prompts the next reveal opportunity.
State v. Spruill, supra.
You can read more about how the law at issue in this case has been used
in North Carolina in the news story you can find here.
As noted, above, the jury convicted both defendants of “`operating
or placing into operation an electronic machine or device for the purpose of
conducting a sweepstakes through the use of an entertaining display, including
the entry process or the revealing of a prize[.]’” State v. Spruill, supra.
The judge sentenced Chapman “to an
active term of 45 days” but the sentence “was suspended, and he was placed on
unsupervised probation for a period of 36 months.” State v. Spruill, supra. Spruill was also “sentenced to an active term
of 45 days” but the “sentence was suspended, and she was placed on unsupervised
probation for a period of 12 months.” State
v. Spruill, supra. This appeal followed.
On appeal, both argued that, at
trial, “there was not substantial evidence they conducted a sweepstakes through
the use of an entertaining display, including the entry process or the
revealing of a prize in violation of N.C. Gen. Stat. § 14–306.4.” State v. Spruill, supra. The Court of Appeals
began its analysis of their argument by explaining that under this statute, it
is unlawful for
`any person to
operate, or place into operation, an electronic machine or device to do either
of the following:
(1) Conduct a
sweepstakes through the use of an entertaining display, including the entry
process or the reveal of a prize.
(2) Promote a
sweepstakes that is conducted through the use of an entertaining display,
including the entry process or the reveal of a prize.’
State v. Spruill, supra.
The court also noted that
`[e]ntertaining
display’ is defined as “visual information, capable of being seen by a
sweepstakes entrant, that takes the form of actual game play, or simulated game
play. . . .’ N.C. Gen. Stat. § 14–306.4(a)(3). An entertaining display can
be `[a]ny [ ] video game not dependent on skill or dexterity that is played
while revealing a prize as the result of an entry into a sweepstakes.’ N.C.
Gen. Stat. § 14–306.4(a)(3)(i).
`Sweepstakes’ is
defined as `any game, advertising scheme or plan, or other promotion, which,
with or without payment of any consideration, a person may enter to win or
become eligible to receive any prize, the determination of which is based upon
chance.’ N.C. Gen. Stat. § 14–306.4(a)(5).
State v. Spruill, supra.
On appeal, Spruill and Chapman argued that
because the prize is revealed to the
patron prior to any opportunity to play a game, they have not run afoul of the
plain meaning of N.C. Gen. Stat. § 14–306.4.
Previously, games were used to reveal the sweepstakes prize.
But, according to Figure Eight
representative Morse, the software accessible from Past Times was changed to
incorporate the pre-reveal feature, specifically, to operate in compliance
with N.C. Gen. Stat. § 14–306.4.
`[N]o sooner is a lottery defined, and
the definition applied to a given state of facts, than ingenuity is at work to
evolve some scheme of evasion which is within the mischief, but not quite
within the letter of the definition. But, in this way, it is not possible
to escape the law's condemnation, for it will strip the transaction of all its
thin and false apparel and consider it in its very nakedness. It will look to
the substance and not to the form of it, in order to disclose its real elements
and the pernicious tendencies which the law is seeking to prevent. The Court
will inquire, not into the name, but into the game, however skillfully
disguised, in order to ascertain if it is prohibited [.] It is the one playing
at the game who is influenced by the hope enticingly held out, which is often
false or disappointing, that he will, perhaps and by good luck, get something
for nothing, or a great deal for a very little outlay. This is the lure that
draws the credulous and unsuspecting into the deceptive scheme, and it is what
the law denounces as wrong and demoralizing.’
Hest Technologies, Inc. v. State ex
rel. Perdue, 366 N.C. 289, 749 S.E.2d 429, 430–31 (North Carolina Supreme Court 2012). . . .
State v. Spruill, supra.
The Court of Appeals explained that
[i]t is undisputed that with the use of
computers accessing the internet, defendants operated a sweepstakes wherein a
prize was revealed to a patron not dependent upon the patron's skill or
dexterity in playing a video game. See N.C. Gen. Stat. §
14–306.4(a)(3)(i). That the video game did not have to be played or played to
completion is not determinative.
Defendants appear to define `game’ only
as that interaction between patron and computer which occurs after the
sweepstakes prize has been revealed and the patron presses the `game’ button.
We disagree.
Under the pre-reveal format, entry and
participation in the sweepstakes, through the pre-reveal, is a prerequisite to
playing a video game. Thus, the sweepstakes takes place during the initial
stages of any game played.
That the sweepstakes is conducted at
the beginning of a game versus its conclusion makes no significant difference:
the sweepstakes prize is not dependent upon the skill or dexterity of the
patron; it is a game of chance. And, in conjunction, the electronic video game
is a display which entices the patron to play.
State v. Spruill, supra.
The court therefore found that
Section 14–306.4 seeks to prevent
the use of entertaining displays in the form of video games to conduct
sweepstakes wherein the prize is determined by chance. See N.C. Gen. Stat. § 14–306.4(b)(1).
Therefore, when viewed in the light
most favorable to the State, it is clear that the jury was presented with
substantial evidence of each essential element of the charge that defendants
operated or placed into operation an electronic machine to conduct a
sweepstakes through the use of an entertaining display, including the entry
process or the reveal of a prize. See id.; see also State v. Trogdon, 216
N.C. App. 15, 715 S.E.2d at 635 (North Carolina Court of Appeals 2011).
Therefore, we affirm the trial
court's denial of defendants' motion to dismiss the charge and find no
error in the judgment of the trial court. State v. Mobley, 206
N.C.A pp. 285 291, 696 S.E.2d 862 (North Carolina Court of Appeals 2010). Accordingly,
defendant's [sic] argument is
overruled.
State v. Spruill, supra.
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