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Internet ‘sweepstakes’ raises questions

Wyoming Attorney General Pat Crank says using computers to play casino games with bonus points from long-distance phone cards appears to be thinly veiled gambling.
/ Source: The Associated Press

D.R. "Doc" Carson made his way to the Internet Cafe every morning and pulled up a chair in front of a terminal.  He skipped the keyboard, choosing instead to use the touch-screen monitor.  He usually stayed until around 5 p.m., when his wife gets home.

That's a long time on the Internet for a 62-year-old man who describes himself as computer illiterate.  But Carson wasn't surfing — he was playing the sweepstakes.

Carson and dozens of others have bought long-distance phone cards that are loaded with sweepstakes points used to play casino-type games — and win cash — on the Internet Cafe's computers.

Operators say it's a legitimate business promotion plan, no different from instant-win twist-off caps on a soda pop bottle.  However, authorities claim it is gambling, and therefore illegal.

The games are the latest frontier in the battle over what constitutes illegal gaming.  Sweepstakes also are played in Alabama, California, Florida, Hawaii, Massachusetts, South Carolina and Texas.  Arizona and Utah are on the list for expansion.

Customers can either buy Internet time by itself, or a combo deal — $5 for a 100-minute phone card, one hour of Internet time and 100 sweepstakes points.  Those points can only be used to play games on the cafe's computers.

William Consterdine, vice president of Extreme Insured Products, which distributes the games, understands why at first glance people might see the Internet Cafe as a casino.  But, he said, there is one key distinction.

"It's a free game," he said.  "When a person comes in and buys a phone card from us, if they want to sit down and use their sweepstakes points to log on to our games, they can.  If they don't want to, they don't have to.  They can take their phone card and leave."

What's more, he said, the sweepstakes points cannot be traded for cash or merchandise, they can only be used to play the games.  The points won playing the games cannot be used to continue playing, they can only be redeemed for cash or merchandise.

But Wyoming Attorney General Pat Crank says the computers used in the sweepstakes appear to be thinly veiled gambling devices.  "What bothers me about this is inserting a computer into the middle of the transaction," Crank said.  "It appears to be a gambling device, and that would be illegal."

Last week, police in Wyoming seized machines from the Internet Cafe in Casper and from the Treasure Chest in Rock Springs.  If the machines are determined to be illegal, police will consult with prosecutors on possible criminal charges in the case, said Detective Tim Weinhandl of the Casper Police Department.

Consterdine and Carl Mahs, of the Texas-based Game Systems Inc., which designs the game software, aren't concerned.  They say there have been few challenges to their games in the eight states where they are played.

"Are we skirting the line?  Probably, a little bit.  We're getting close," Consterdine said.  "At the same time, we know that sweepstakes work.  If McDonald's didn't have their Monopoly game, if it didn't work to boost their sales, they wouldn't keep doing it over and over and over."

Bob Jarvis, who teaches gambling law at Nova Southeastern University in Fort Lauderdale, Fla., said the classic definition of gambling is that someone gives up something of value to take a chance at winning a prize.  "Certainly there's a chance involved, because they only pay out 92 percent," Jarvis said. "The question is," he added, "are they risking anything?"

Mahs insists there's no risk involved.  Sweepstakes points come free with the purchase of a phone card, and people can enter either online or by mail without making a purchase.

At the Internet Cafe in Casper, a cork board beside the front desk displays receipts with big payouts highlighted: $602.90 on March 27, $1,323.75 on April 2, $500.50 on April 4, $1,207.85 on April 6.

Still, Carson, who said he has been to the cafe every day since it opened last month, believes the sweepstakes aren't gambling.  "It's more or less just a pastime," he said. "You're not going to get rich on it by any means."