Towns, county move to limit sweepstakes cafes
The move by the two municipalities follows on the heels of the Nags Head and Dare County, which have already adopted zoning changes to control the proliferation of electronic gaming sites locally.
Last spring, the North Carolina Court of Appeals ruled that the state’s previous prohibition on electronic gaming was unconstitutional. Under the ruling however, local governments are permitted to regulate the cafes and gaming terminals.
Several cafes have opened in Moyock near the state line to draw customers from Virginia, which has banned the machines, as well as local customers.
Users of the terminals pay for time on the Internet, primarily to use gaming sites. Proponents say winners are chosen randomly, much the same as lotteries or sweepstakes promotions by stores and product manufacturers. As such, the machines are not used for gambling, they argue.
Some communities have welcomed the opportunity to collect more taxes and fees.
Legislators added a ban the machines in 2010 as their popularity grew following a state prohibition on video poker in 2006.
Kill Devil Hills town planners are slated to make recommendations to the planning board tonight to allow the cafes as an accessory use to existing businesses in the town’s commercial and light industrial zones.
Proposed regulations also limit the number of cafes to two per business or business complex. In addition, on-premise alcohol consumption would be prohibited within the gaming operation area.
“Aside from the fact that people can lose a lot of money playing them, police and sheriff’s departments are concerned about the creation of targets for criminal activity,” Assistant Planning Director Meredith Guns wrote in a memo to the planning board. “By the nature of the games, some people will play these machines for long periods of time ,and loitering or long-term parking may pose a problem for some sites.”
The proposed changes closely mirror regulations in Nags Head and unincorporated Dare County.
If the planning board backs the proposal, town Board of Commissioners will then consider it for adoption. The town would charge businesses with cafes a privilege license tax of $1,500 per machine per year if the changes are adopted.
In Kitty Hawk, the Town Council is expected to consider the proposed amendments to its zoning ordinance during an Oct. 1 public hearing. The amendments would allow such cafes in the community shopping mall/center district, which is from Home Depot to Wal-Mart. Planning Director Joe Heard said it also includes adjacent parcels along U.S. 158.
The council recently denied a text amendment application submitted by the manager of Wink’s to allow electronic gaming operations as a conditional use in the Beach Commercial zoning district.
Heard said the beach road grocery store was cited in April for having the Internet sweepstakes terminals at the store because it was not a permitted use.
Following denial of the Wink’s request, Town Attorney Steve Michael recommended the town adopt standards outlining where and under what conditions cafes could be established.
Under the proposal, an electronic gaming operation could only be an accessory business use and could not exceed 10 percent of the gross floor area of the principal business use. Only two machines per business would be allowed and would be limited to one player at a time. The gaming area would also have to be visually separated from the principal business use by a wall.
Also, outside signs advertising the operation would be prohibited ,and hours of the electronic gaming operation would be limited from 8 a.m. to 12 a.m. Monday through Saturday.
The possibility of charging a fee for the machines would be a separate action by the council, according to Heard.
Under the Kitty Hawk proposal, any gaming operations could not be located within 500 feet in any direction from a school, day care center, religious institution, public park or other gaming operation.
Dare County commissioners adopted standards for Internet sweepstakes cafes in August. They allow for the cafes as an accessory use in the majority of commercial districts in unincorporated Dare County and East Lake.
Because the county doesn’t have the same tax authority as the municipalities, Dare County Planning Director Donna Creef said businesses that fall within the unincorporated area are charged $50 per machine, per year.
In Nags Head, commissioners adopted zoning changes to allow the gaming operations in the C-3 district as an accessory use with no more than two machines per business. The district includes the industrial areas off of Lark Street and Satterfield Landing Drive, said Planning Director Elizabeth Teague.
Teague said two businesses in Nags Head that have Internet sweepstakes terminals, the gas station known as Ms. Owens, and the bowling alley.
The town charges a fee of $2,500 per machine.
Southern Shores and Duck have not adopted any regulations on electronic gaming operations, according to town officials.
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