Appeals court says phone cards not illegal gambling

Wednesday, Sept. 7, 2005 | 9:38 a.m.

RALEIGH, N.C. -- Promotional game pieces packaged with telephone long-distance cards aren't part of an illegal lottery as state agents allege, the state Court of Appeals ruled Tuesday.

The court upheld a lower court judge who ruled against the state Feb. 17, 2004, in a case against Treasured Arts Inc., a South Carolina company that sold the cards at convenience stores in North Carolina.

State lawyers haven't decided about whether to pursue further appeals, a spokeswoman for state Attorney General Roy Cooper said Tuesday. Since the case started, lawmakers have approved a state-run lottery.

The cards offered scratch-off game pieces with prizes worth up to $50,000, as well as cars, the court said.

State alcohol agents in 2001 or 2002 threatened the stores' alcohol licenses, saying the card sales were an illegal form of gambling. But the court said customers had the choice of registering for the giveaway without buying a phone card and noted that the phone cards provide a service.

The case came to the appellate court after the lower court ruling stopped agents from threatening store owners. The state hasn't charged anyone, the opinion said.