South Carolina retailers who offer electronic sweepstakes to customers are feeling jittery.

“The question is, are electronic sweepstakes legal in South Carolina?” said Alexander Shadwick, after Tuesday’s meeting. “They don’t know if the games are legal or illegal, so the courts have to decide,” he said. “But it scares all the retailers.” Shadwick likened the activity to using coupons or putting in $20 and purchasing songs on iTunes while also being entered into a contest.

This month The State newspaper quoted the S.C. State Law Enforcement Division chief announcing a renewed effort to combat illegal video poker games. The industry was banned in 2000 but frequently arises in legislative debates about relaxing the state’s restrictions on raffles.
During Tuesday’s committee meeting, Paula Harper Bethea, the executive director of the S.C. Education Lottery, shied away from the suggestion that she was targeting “sweepstakes” in a warning she issued to retailers. “I’ve heard the whole sweepstakes-game talk, frontwards, backwards, and that’s not for me to decide,” she said. “A magistrate in South Caroline ultimately has to decide that. ... What I do enforce, however, is who sells our lottery products.”
She said she has been working with lottery officials in Georgia and North Carolina on how to address the effects of Internet gaming on state-run lottery programs. In May, Bethea sent a letter to the state’s 3,700 ticket retailers to warn them that the agency could revoke or suspend their lottery license if they violate state laws.

“Please be aware that a machine can be determined to be illegal by a local judge even if cash or other items are not given in exchange for credits earned while playing the machine,” wrote Bethea. “You may wish to consult with an attorney or local or state law enforcement officials to assist you in determining which machines are appropriate under state law and which are not.”
In June the S.C. Attorney General’s office responded to a question from Beaufort County Sheriff P. J. Tanner. The county official was asking whether the owner of a Hilton Head Island restaurant could operate Sweepstakes Promotional electronic games by Products Direct, LLC.
The letter said the office was unable to say if a specific machine was illegal. But if police had probable cause that it was, then the machine should be seized and taken to the magistrate, who could decide on a machine-by-machine basis