Pennsylvania Court Upholds Ban On Internet Sweepstakes Cafés; North Carolina Ban Under Challenge

A federal trial court upheld Pennsylvania’s ban on Internet sweepstakes cafés in early October.  Judge Robert D. Mariani of the Middle District of Pennsylvania refused to enter a preliminary injunction against the statute, which was adopted on June 30.  He rejected the claim that the law violated the First Amendment rights of café owners.   Intervening in support of the statute were three Pennsylvania casinos:  Mohegan Sun at Pocono Downs, Sands Bethworks Gaming, LLC, and Greenwood Gaming and Entertainment, Inc., d/b/a Parx Casino.  Telesweeps of Butler Valley, Inc. v. Kelly, No. 3:12-CV-1374 (M.D. Pa.) (October 10, 2012).

Judge Mariani adopted the reasoning of a Florida federal court that a statutory ban on Internet sweepstakes games does not restrict a café owner’s ability to communicate.  The ban, the court ruled, only prevents the owner from connecting its games to the payoff of a gambling contest.  Because the game itself does not include a story or other form of narrative, but rather simply notifies the player whether she won or lost, the court ruled that it is properly seen as “conduct” that the state may regulate rather than “expression” protected by the First Amendment.

Judge Mariani specifically disagreed with a North Carolina decision striking down on First Amendment grounds that state’s prohibition of Internet sweepstakes cafes.  By defining the prohibited gaming programs in terms of “entertaining displays” shown on the screen, the North Carolina statute triggered greater First Amendment concern.  The state’s appeal of that decision was argued before the North Carolina Supreme Court in October.  Hest Technologies, Inc. v. North Carolina, 725 S.E.2d 10 (N.C.Ct. App. 2012).