AN ACT to clarify that certain server‑based electronic game promotions are prohibited.

The General Assembly of North Carolina enacts:

SECTION 1.  Part 1 of Article 37 of Chapter 14 of the General Statutes is amended by adding a new section to read:
"§ 14‑306.3. Certain game promotions unlawful.
(a)	It is unlawful to promote, operate, or conduct a server‑based electronic game promotion. 
(b)	It is unlawful for any person to possess any game terminal with a display that simulates a game ordinarily played on a slot machine regulated under G.S. 14‑306 or a video gaming machine regulated under G.S. 14‑306.1A for the purpose of promoting, operating, or conducting a server‑based electronic game promotion.
(c)	As used in this section, "server‑based electronic game promotion" means a system that meets all of the following criteria:
(1)	A database contains a pool of entries with each entry associated with a prize value.
(2)	Participants purchase, or otherwise obtain by any means, a prepaid card.
(3)	With each prepaid card purchased or obtained, the participant also obtains one or more entries.
(4)	Entries may be revealed in any of the following ways:
a.	At a point‑of‑sale terminal at the time of purchase or later.
b.	At a game terminal with a display that simulates a game ordinarily played on a slot machine regulated under G.S. 14‑306 or a video gaming machine regulated under G.S. 14‑306.1A. 
(d)	Upon conviction or plea of guilty, all of the following held by the person shall be automatically revoked:
(1)	A permit issued under Chapter 18B of the General Statutes.
(2)	A contract to sell tickets or shares under Article 5 of Chapter 18C of the General Statutes.
(e)	Nothing in this section shall apply to the form of Class III gaming legally conducted on Indian lands which are held in trust by the United States government for and on behalf of federally recognized Indian tribes if conducted in accordance with an approved Class III Tribal‑State Gaming Compact applicable to that tribe as provided in G.S. 147‑12(14) and G.S. 71A‑8."
SECTION 2.  G.S. 14‑298 reads as rewritten:
"§ 14‑298.  Seizure of illegal gaming items.
Upon a determination that probable cause exists to believe that any gaming table prohibited to be used by G.S. 14‑289 through G.S. 14‑300, any illegal punchboard or illegal slot machine, or any video game machine prohibited to be used by G.S. 14‑306 or G.S. 14‑306.1A, or any game terminal described in G.S. 14‑306.3(b) is in the illegal possession or use of any person within the limits of their jurisdiction, all sheriffs and law enforcement officers are authorized to seize the items in accordance with applicable State law. Any law enforcement agency in possession of that item shall retain the item pending a disposition order from a district or superior court judge. Upon application by the law enforcement agency, district attorney, or owner, and after notice and opportunity to be heard by all parties, if the court determines that the item is unlawful to possess, it shall enter an order releasing the item to the law enforcement agency for destruction or for training purposes. If the court determines that the item is not unlawful to possess and will not be used in violation of the law, the item shall be ordered released to its owner upon satisfactory proof of ownership. The foregoing procedures for release shall not apply, however, with respect to an item seized for use as evidence in any criminal action or proceeding until after entry of final judgment."
SECTION 3.  G.S. 14‑309 is amended by adding a new subsection to read:
"(c)	Notwithstanding the provisions of subsection (a) of this section, any person violating the provisions of G.S. 14‑306.3(b) involving the possession of five or more machines prohibited by that subsection is guilty of a Class G felony."
SECTION 4.  This act becomes effective December 1, 2008, and applies to offenses committed on or after that date.
In the General Assembly read three times and ratified this the 18th day of July, 2008.

	_____________________________________
		 Marc Basnight
	 President Pro Tempore of the Senate

	_____________________________________
		 Joe Hackney
	 Speaker of the House of Representatives

	_____________________________________
		 Michael F. Easley
	 Governor

Approved __________.m. this ______________ day of ___________________, 2008