North Carolina

I. Definition of Gambling

1. Definition

North Carolina uses the dominant factor test. “[A] game of chance is one in which the element of chance predominates over the element of skill, and a game of skill is one in which the element of skill predominates over the element of chance.” State v. Stroupe, 76 S.E.2d 313, 316 (N.C. 1953). The question is which determines the result; or alternatively whether chance thwarts the exercise of skill and judgment.

2. Exemptions

Pre-paid phone cards that came with game piece were legal where free game pieces could be obtained by mail. The rate, being one of the best around, was enough to indicate that the phone card was being sold as a phone card, and not merely for the chance to engage in a lottery. American Treasures, Inc. v. State, 617 S.E.2d 346 (N.C. Ct. App. 2005). If the item being sold is being sold for more than its value, then a lottery will likely be found.

Where a ‘free’ bingo card was given out with purchase of candy, and price of candy was inflated, illegal gambling existed. This was so even though some people got free bingo cards without buying candy, because most people did in fact buy candy. Animal Protection Soc. of Durham, Inc. v. State, 382 S.E.2d 801 (N.C. Ct. App. 1989).

II. Definition of Bookmaking

North Carolina does not appear to have any statutory, attorney general opinions, or case law defining bookmaking.

III. Specific Gaming Device Definitions

Slot machine or gaming device defined: machine that is adapted (or may be readily converted) so that, as a result of the insertion of any object, such machine is caused to operate and the user may receive any thing of value or the user may secure additional chances or rights to use such machine; or any other machine or device designed and manufactured primarily for use in connection with gambling and which machine or device is classified by the United States as requiring a federal gaming device tax stamp.
This definition covers all slot machines and similar devices except vending machines that return the same value on each use, and some other exceptions that are narrowly drawn.
N.C. Gen. Stat. Ann. § 14-306. There is also a ‘chucky cheese’ exemption in this definition. See section VI (3), infra.

The right to operate a machine an additional time is a ‘thing of value.’ State v. Abbott, 11 S.E.2d 539 (N.C. 1940).

An antique slot machine is not illegal if not intended to be gambled upon. N.C. Gen. Stat. Ann. § 14-309.1.

IV. Bucket Shop Laws

Futures contracts: A contract for the sale of certain named goods, where no actual delivery is intended, but rather the parties will settle on market fluctuations, is void. This section does not apply where the transaction occurs on a regular board of exchange and follows the rules of such board. N.C. Gen. Stat. Ann. § 16-3. Bucket shops are forbidden.

The contract is not void where the parties allocate risk by giving option to call for actual delivery as long as there is not an intention not to avoid delivery. State v. Clayton, 50 S.E. 866 (N.C. 1905).

Entering into or aiding a futures contract void under this section is a class 1 misdemeanor. N.C. Gen. Stat. Ann. § 16-4. Opening on office of place of business for making contracts void under these section is a class 1 misdemeanor. N.C. Gen. Stat. Ann. § 16-5.

V. Prohibition of Games of Skill

Shuffleboard is a game of skill, not a game of chance. State v. Bishop, 30 N.C. 266 (1848).

1. Poker/Card Games
Question of whether blackjack was a skill game was for jury to decide. State v. Eisen, 192 S.E.2d 613, 615-16 (N.C. Ct. App. 1972) (was held not to be game of skill).

2. Dice
Betting on dice is an illegal game of chance. State v. De Boy, 23 S.E. 167 (N.C. 1895).

3. Billiards
Most forms of billiards are skill games, not games of chance. See State v. Stroupe, 76 S.E.2d 313 (N.C. 1953).

4. Bowling
The game of ‘tenpins’ is not a ‘game of chance’ under the state’s anti-gambling statute. State v. De King, 18 S.E. 169 (N.C. 1893); State v. Gupton, 30 N.C. 271 (1848). Bowling is a game of skill. State v. Abbott, 11 S.E.2d 539 (N.C. 1940).

5. Darts
North Carolina does not appear to have any statutory, attorney general opinions, or case law governing games using darts.

VI. Express Exemptions

1. Social

North Carolina does not appear to have any statutory, attorney general opinions, or case law granting a social gaming exemption.

2. Charity

N.C. Gen. Stat. Ann. § 14-309.5 begins the sections allowing for charitable bingo. N.C. Gen. Stat. Ann. § 14-309.7 lays out the licensing procedure. N.C. Gen. Stat. Ann. § 14-309.8 limits bingo to no more than two five-hour sessions per week and never within forty-eight hours of each other. N.C. Gen. Stat. Ann. § 14-309.9 limits a single prize to $500 with the aggregate prizes during a session no more than $1500 or $2500. The remaining sections govern accounting, audits, public access, beach bingo, raffles, and other related matters.

3. Chucky Cheese Exemption

The following are not gambling devices or slot machines: coin-operated machines, video games, pinball machines, and other computer, electronic or mechanical devices that are operated and played for amusement, that involve the use of skill or dexterity to solve problems or tasks or to make varying scores or tallies and that limit the number of credits playable at one time to eight, and which award free replays or coupons redeemable for prizes not exceeding $10.00, but no cash may be offered. N.C. Gen. Stat. Ann. § 14-306.

4. Commercial

North Carolina does not appear to have any statutory, attorney general opinions, or case law granting a commercial gaming exemption.

5. Lottery

N.C. Gen. Stat. Ann. § 18C-101 begins the North Carolina State Lottery Act. The act does not allow video lottery games. N.C. Gen. Stat. Ann. § 18C-103.

N.C. Gen. Stat. Ann. § 18C-110 establishes the State Lottery Commission. That section through section 18C-116 regulates the commission, including membership, qualifications, meetings, records, powers, duties, reports, and audits.

N.C. Gen. Stat. Ann. § 18C-120 deals with the commission director. That section through section 18C-122 regulates the director including powers, duties, records, and audits.

N.C. Gen. Stat. Ann. § 18C-130 deals with the operation of the lottery. That section through section 18C-134 regulate lottery operations including types of games, advertising, disclosures, prices, age restrictions, procedures, prizes, rules, winner validation, and debt collection against prizes,

N.C. Gen. Stat. Ann. § 18C-140 deals with lottery retailers. That section through section 18C-143 regulates retailers including contracts, retailer selection process, compensation, and responsibilities.

N.C. Gen. Stat. Ann. § 18C-150 deals with the vendors and contractors. That section through section 18C-152 regulates vendor matters including procurements, contracts, and investigations.

N.C. Gen. Stat. Ann. §§ 18C-160 through 18C-164 create and regulate the North Carolina State Lottery Fund. The fund handles lottery expenses and revenues.

N.C. Gen. Stat. Ann. §§ 18C-170 and 18C-171 preempt local lottery regulation.

N.C. Gen. Stat. Ann. § 18C-172 creates the Lottery Oversight Committee.

6. Horseracing & Other Pari-mutuel

Betting on horse racing is illegal gambling, even though it is a race of skill from the jockey’s perspective. State v. Brown, 20 S.E.2d 286 (N.C. 1942).

N.C. Gen. Stat. Ann. § 14-309.20 prohibits all greyhound racing.

Attempt to create racing commission and allow pari-mutuel gambling in a single town violated the state constitution. Pub. Loc. Laws 1939, c. 540, § 1 et. seq.; N.C. Const. art. 1, § 7; State ex rel. Taylor v. Carolina Racing Ass’n, 84 S.E.2d 390 (N.C. 1954). N.C. Const. art. II, § 24 prohibits special legislation aimed at one particular group or area.

VII. Specific Internet Prohibition

North Carolina does not appear to have any statutory, attorney general opinions, or case law governing internet gaming

VIII. Gaming Crimes & Penalties for Unlawful Gaming

A person with knowledge of the existence and establishment of any faro bank, faro table or other gaming table prohibited by law must testify as to such knowledge when called to do so. The person testifying is pardoned for any crimes they were involved in that they testify about. N.C. Gen. Stat. Ann. § 8-55.

Using a ‘slug’ in a slot machine is a class 2 misdemeanor. This means using an artificial coin in a slot machine that accepts coins. N.C. Gen. Stat. Ann. § 14-108. A person who manufactures, sells, or gives away a slug or substance intended to be placed in a slot machine is also guilty of a class 2 misdemeanor. N.C. Gen. Stat. Ann. § 14-109.

Advertising Lottery: Advertising or publishing an account of a lottery, stating how, when or where the same is to be or has been drawn, or what are the prizes therein, or the price of a ticket, or where or how it may be obtained. There is an exception for advertising the state’s own lottery. There is also an exception for people regularly engaged in the media business, if they are acting lawfully. N.C. Gen. Stat. Ann. § 14-289.
Class 2 misdemeanor.

The advertising statute may not be used to prevent advertising of Indian gaming, per the state compact with the tribes. Op. Att’y Gen., Hipps, (Aug. 5, 1997).

Dealing in Lotteries: Participating in a lottery in any way is a crime. There is an exception for the state’s own lottery and an exception for possession of a ticket from a lawful lottery of another state. N.C. Gen. Stat. Ann. § 14-290.
Class 2 misdemeanor: fine not to exceed $2,000.

Selling Lottery Tickets: Selling lottery tickets or acting as agent for a lottery is a crime. There is an exception for the state’s own lottery. N.C. Gen. Stat. Ann. § 14-291.
Class 2 misdemeanor.

Numbers Lottery: Sell any ticket, token, certificate or order for any number or shares in any lottery, commonly known as the numbers lottery. Possession of such tickets, tokens, or orders is prima facie evidence of violation of this section. There is an exception for the state’s own lottery. N.C. Gen. Stat. Ann. § 14-291.1.
Class 2 misdemeanor.

Pyramid Schemes: Establishing or operating a pyramid scheme is a class H felony. Participating or promoting in a pyramid scheme is a class 2 misdemeanor. Any contracts associated with pyramid schemes are void. N.C. Gen. Stat. Ann. N.C. Gen. Stat. Ann. § 14-291.2.

A multilevel sales program violated this section where the net effect was to give participants a fee for introducing new participants. State ex rel. Edmisten v. Challenge, Inc., 284 S.E.2d 333 (N.C. Ct. App. 1981).

Gambling: operate any game of chance or play at or bet on any game of chance at which any thing of value is bet. There is an exception for any state’s lawful lottery. N.C. Gen. Stat. Ann. N.C. Gen. Stat. Ann. § 14-292.
Class 2 misdemeanor.

The game of ‘tenpins’ is not a ‘game of chance.’ State v. De King, 18 S.E. 169 (N.C. 1893); State v. Gupton, 30 N.C. 271 (1848).

Allowing Gambling: A keeper of a house of entertainment or place where alcohol is served may not allow gambling on the premises (except for the state’s own lottery). N.C. Gen. Stat. Ann. § 14-293.
Class 2 misdemeanor. Person convicted also loses their license and is forever disbarred from again keeping such a place of entertainment or alcohol.

Gambling with faro banks and tables: Open, establish, use or keep a faro bank/table, with the intent that games of chance be played on it. Play or bet any thing of value on such a table or bank. N.C. Gen. Stat. Ann. § 14-294.
Class 2 misdemeanor.

Possession of a gambling device, without more, is not illegal. State v. Jones, 243 S.E.2d 827, (N.C. Ct. App. 1978).

Keeping tables and slot machines: Establish, use, or keep, any gaming table, illegal punchboard, or illegal slot machine, at which games of chance are played. Play or bet any thing of value at such table or machine. N.C. Gen. Stat. Ann. § 14-295.
Class 2 misdemeanor.

Video poker is an illegal slot machine because it is not a skill game; the elements of bluffing and psychology are not present as they are in traditional poker games. Collins Coin Music Co. of North Carolina, Inc. v. North Carolina Alcoholic Beverage Control Com’n, 451 S.E.2d 306 (N.C. Ct. App. 1994).

Allowing gaming tables: Allow illegal gaming tables or slot machines to be kept or used at your house. N.C. Gen. Stat. Ann. § 14-297.
Class 2 misdemeanor; plus pay $200 to anyone who sues.

Seizure: Illegal gaming tables and slot machines are subject to seizure. N.C. Gen. Stat. Ann. § 14-298. All money and property used for gaming is subject to seizure as is any vehicle used in conducting a lottery. N.C. Gen. Stat. Ann. § 14-299.

Slot machines: Unlawful to keep, for the purpose of being operated, any slot machine. Each time the machine is operated is a separate offense. N.C. Gen. Stat. Ann. § 14-301.
Class 2 misdemeanor.

Other gambling devices: Unlawful to keep, for the purpose of being operated, any punchboard, slot machine, or similar device. Each time the machine is operated is a separate offense. N.C. Gen. Stat. Ann. § 14-302.
Class 2 misdemeanor.

Manufacture slot machine: It is unlawful to manufacture, own, store, keep, possess, sell, rent, lease, lend, give away, transport, or permit the operation of any slot machine or gambling device. It is unlawful for any person to permit to be placed, maintained, used or kept in any space owned, leased or occupied by him or under his management or control, any slot machine or gambling device. N.C. Gen. Stat. Ann. § 14-304.

Agreements: It is unlawful to make an agreement with reference to a slot machine where the user may become entitled to some form of payout. N.C. Gen. Stat. Ann. § 14-305.

Illegal gaming devices are nuisances. N.C. Gen. Stat. Ann. § 14-308.

An antique slot machine is not illegal if not intended to be gambled upon. N.C. Gen. Stat. Ann. § 14-309.1. Antique means 25 years or more old.

Dogfights: Gambling on or profiting from a dogfight is a class H felony. N.C. Gen. Stat. Ann. § 14-362.2.

Nuisance: A building used for gambling purposes is a nuisance and is subject to abatement. N.C. Gen. Stat. Ann. § 19-1.

Street Racing: Betting on street racing is illegal. N.C. Gen. Stat. Ann. § 20-141.3.

IX. Statute of Anne/ Recovery of Debts

All wagers based on chance are unlawful; contracts, judgments, and loans based on such wagers are void. N.C. Gen. Stat. Ann. § 16-1.

Agreement to pool money and buy lottery tickets from another state was illegal. Cole v. Hughes, 442 S.E.2d 86 (N.C. Ct. App. 1994).

Debts arising from gambling in North Carolina are not enforceable in the courts of North Carolina. MGM Desert Inn, Inc. v. Holz, 411 S.E.2d 399 (N.C. Ct. App. 1991).

A note based on a gambling debt is void. Bullard v. Johnson, 141 S.E.2d 472 (N.C. 1965).

A check given to pay losses in a poker game could not be enforced. Moore v. Schwartz, 142 S.E. 772 (N.C. 1928).

A gaming contract will not be enforced, even if valid where it was made. Burrus v. Witcover, 74 S.E. 11 (N.C. 1912). But a judgment from another state, based on such a contract, may be enforced in North Carolina based on full faith and credit. MGM Desert Inn, Inc. v. Holz, 411 S.E.2d 399 (N.C. Ct. App. 1991).

Under the North Caroline Uniform Commercial Code, even a holder in due course of an instrument (check) is subject to the maker’s defense of illegality. N.C. Gen. Stat. Ann. § 25-3-305. Comment 1 to the section says that illegality is most often a matter of gambling.

X. Lawful Commercial Casino Gaming

N.C. Gen. Stat. Ann. § 14-306.1 allows businesses that had gambling machines before June 30, 2000 to keep at least one of them. There is also a requirement that the machine had been enrolled for tax purposes by January 2000. However, the section will no longer be effective after July 1, 2007, and all gambling machines will then be banned. N.C. Gen. Stat. Ann. § 14-306.1A.