'Sweepstakes' electronic gambling takes hold in Beaufort County (Update: Illegal)

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Update February 14: The Beaufort magistrate has ruled the Bluffton operation a gambling setup, and thus illegal.

Here's the statement on the decision:

In an order issued Tuesday, Beaufort County Chief Magistrate Darlene Smith ruled that South Carolina's gambling statute applies to 20 computers seized in September 2011 from Hest Sweepstakes, 1008 Fording Island Road, Bluffton.

"The ruling validates our opinion," said Solicitor Duffie Stone. "The machines are gambling devices, are against the law and should be destroyed."

According to South Carolina law, machine-based gambling has three elements: a person pays in money, plays a game of chance and has the potential to win money. At the business, customers would pay money to a clerk, who would give them a randomly-generated pin number that determined whether or not they had won money. The customer could ask the clerk if the pin number was a winner, and thus collect the money on the spot, or could use the pin to play various games on a computer that would reveal how much they had won.

"Hest was using technology and wordplay to try to circumvent South Carolina's anti-gambling law," said assistant solicitor Carra Henderson, who successfully argued on behalf of the state

"Instead of having a coin slot, they had a clerk accepting money," Henderson said. "Instead of placing a bet, they called it a donation. Instead of having a lever on the machine, they used a mouse to click a start button. Hest can dress things up as much as they want, but the bottom line is that these machines were being used as a tool for gambling."

The Beaufort machines are but one shard in a statewide debate, look for this battle to continue. 

Update February 9: Arguing that their "sweepstakes" operation is closer to McDonald's annual Monopoly sweepstakes game, HEST Sweepstakes defended the legality of their operation under South Carolina law on Wednesday.

The Island Packet and WTOC 11 both have competent reports that outlay the arguments from each side.

A ruling is expected in about a week -- but regardless of what happens locally, expect these decisions to be challenged up South Carolina's court ladder. 

Update February 6: While the statewide crackdown on the video-fundraising "sweepstakes" machines has largely stalled, the Beaufort County case is still pending.

And it's set for a local magistrate hearing this Wednesday.

The Island Packet has a report on what's coming up (read it here) and you can brush up on the overall status of the South Carolina legal fight against the machines in our prior report (read that here).

And, of course, background on the Beaufort County raid is below.

Update September 29: 24 computers, $1,700 in cash were seized from the Hest Sweepstakes location on Tuesday when investigators raided the location for allegedly violating South Carolina's anti-gaming laws.

The Island Packet has a nice written report (read that here) and WTOC has a nice video report (watch it here) as does WSAV (watch that here).

The Island Packet also notes that there were two prior smaller-scale seizures of such equipment in June and July in Beaufort and Port Royal, respectively. 

Given mater-of-certainty language in some of the reports that casts this as clearly illegal, the grey area in the law is still pretty prominent and South Carolina is only gearing up tamp down the flames of the "online sweepstakes" — and North Carolina has been fighting that one for years.

First reporting: Another electronic "gambling" showdown is taking place in South Carolina as a new generation of "online sweepstakes" flourishes and skirts the language of the law.

With a combination of legal oversights and the magic of instant Internet responses, Texas-based Hest Technologies has developed a system that allows for legal cash gaming in many states.

Dubbed online sweepstakes and not computer gambling, businesses that host these games call themselves an "Internet Cafe" or "Sweepstakes Cafes" to help avoid pricking strict South Carolina anti-gaming laws.

It's a legal shield that has proved fickle for businesses across the state with similar types having been raided.

As you might guess, law enforcement is none too happy about the proliferation of the machines and it stands likely that the businesses will get caught up as South Carolina renews a crackdown on video gaming.

That battle is hitting home in Beaufort County over a Hest Sweepstakes Internet Cafe in Bluffton and while no raid has been done yet, language from the Beaufort County Sheriff's Office shows they're quite interested in doing so.

The Island Packet has a solid report on the local angle; take a read here.

For more related coverage in the state; I'll point you to our Myrtle Beach sister site that has been following the issue in depth.

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