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On the final day of 2024, a panel of judges from the North Carolina Court of Appeals gave a split-decision victory to law enforcement agents in Robeson County who are upholding bans on unlicensed electronic gaming machines. Pending a possible appeal, the ruling strengthens precedent that such “skill games” are outside of the scope of regulated gambling in the state.
A small and unregulated presence of the games in North Carolina could limit their potential impact on North Carolina legalizing online casino play in the future. While such regulation is not imminent in the state, some components are in place.
Appellate court rules against gaming terminal operator
The case in question is No Limit Games v. Sheriff of Robeson Co., et al, with the pursuant being a company that has operated electronic gaming machines in multiple privately owned businesses within the county’s borders. In May 2023, No Limit Games brought the complaint arguing that attempts to seize the terminals were illegal because the games represented video sweepstakes that North Carolina law authorizes according to The Carolina Journal.
The trial court agreed with No Limit Games and granted an injunction blocking enforcement actions against its operations in the county. However, the appellate court nearly immediately intervened with its superseding injunction against that order in September 2023.
On Dec. 31, 2024, a three-member panel issued a majority opinion that No Limit Games’ terminals represent unlicensed gambling because “their prize is determined by chance.” As a result, law enforcement in the county is free to take action against No Limit Games and other companies engaged in similar activities.
Counsel for No Limit Games shared with PlayUSA that the company does intend to appeal the Dec. 31 decision. The next step would be the North Carolina Supreme Court, although the Supreme Court has discretion on whether to hear the appeal.
The legality of these games which incorporate an element of skill into what are otherwise games of chance is not just a matter of debate in North Carolina. Other states are grappling with the same questions.
“Skill games” getting attention elsewhere, too
The status of “skill games” has been a hot-button issue across North Carolina’s northern border. In May 2024, Virginia Gov. Glenn Youngkin vetoed a bill that would have regulated the machines, preserving a status quo in which the terminals are vulnerable to seizure and operators subject to criminal prosecution.
Kentucky has also passed a ban on this type of gaming. The legality of similar games is a question that the Pennsylvania Supreme Court has been called upon to address multiple times as well.
While these situations are far from desirable for companies engaged in operating these machines, they could be a positive for other entities in the gambling industry. Potential benefactors include companies that operate online casino platforms.
“Skill games” bans could behoove online casino regulation chances
While regulated online casinos was but a momentary consideration in the drafting of the 2023 law that brought legal online sports wagering to North Carolina, that doesn’t mean the conversation couldn’t emerge again in Raleigh. If it does, the lack of regulated “skill games” in North Carolina businesses would mean that there is one fewer obstacle to such expansion.
In neighboring Virginia, businesses offering such games to customers have come to rely on them as part of their revenue. That’s why legislators have made attempts to regulate them.
An entrenched “skill games” presence in North Carolina could oppose the legalization of online casinos, fearing that people who patronize their businesses to play the machines onsite would play online instead. If the “skill games” maintain a marginal presence in North Carolina, though, the businesses offering them would not be able to mount a compelling argument.
To be clear, there is no reason at present to suspect that North Carolina will expand regulated online gambling to include online slots and table games in the immediate future. If that does happen eventually, though, this ruling from the North Carolina Court of Appeals would have helped to keep a path clear for that expansion.
