Faced with a new type of business coming to town—described as electronic gaming stores—the town board took steps last week toward regulating the establishments.

Town Manager Andy Hedrick and his staff were asked to come up with draft amendments to current zoning regulations and changes to the business license fee schedule to address the new businesses. Three electronic gaming stores have opened in Fuquay-Varina within the past year, and one commissioner said he understands a fourth will be opening soon.

The existing stores rent internet access time to customers on computers that allow them to play sweepstakes games and possibly win cash. Some such stores advertise that they offer office services such as faxing, scanning and copying as well.

Mayor John Byrne and Commissioner Jimmy Johnson both said they have heard some complaints about the establishments. The one heard most often has had to do with parking, they said. Two stores are located in small strip business centers where parking is somewhat limited. Shoppers planning to visit other stores in the centers have complained that they could not find parking space since the electronic gaming stores opened.

In board discussion it was pointed out that zoning laws can regulate the number of parking spaces required for a business of a given type. Zoning can also specify the distance certain types of businesses must be from churches, schools, or numerous other types of establishments. Tattoo parlors are restricted in such manner.

Town staff will be looking at parking, location and signage, the latter area to insure that outside signs accurately indicate the nature of the primary business inside.

It was noted, too, that the town’s requirements for privilege licenses do not have a category that relates to electronic gaming.

The existing stores obtained licenses under the category “service business.” Such business licenses cost $30 a year. After lengthy discussion, board members agreed to adopt as the definition of electronic gaming the same wording used by the town of Aberdeen. (See below.)

Advised that, in order for an amendment to be prepared relating to privilege licenses, they would have to set a fee for the proposed electronic gaming license category, commissioners agreed (4 to 1) upon a privilege license fee of $500 and a per machine (computer terminal) fee of $200. Commissioner Johnson voted no. He had suggested a start-up license charge of $1,000. Hedrick told board members they could revise the fees before final passage of the amendment if they chose to.

As board members batted about various fee schedules, they were reminded by Town Attorney Mark Cumalander, who said he had discussed the matter with a law professor at the School of Government in Chapel Hill, that excessive taxation cannot be used in a punitive manner or to force a business owner out of business.

The town’s present list of business categories and the privilege license cost for each shows fortune tellers paying the highest fee at $500. Most of the privilege licenses issued in Fuquay-Varina cost $100 or less.

Commissioner Charlie Adcock took the opportunity to say, “I do not like privilege licenses. That’s probably a tax not worth the effort the town puts into administering it. I’d like to see us do away with them.”

As the discussion of electronic gambling got underway last week, Commissioner Johnson said he would like to see a moratorium declared on any new such businesses until the town can determine how to regulate them. He then learned the town has nothing in its ordinances relating to electronic gambling, so there is nothing on which to declare a moratorium.

After the board’s discussion ended, Mayor John Byrne asked if anyone in the audience wished to speak relative to the electronic gaming question, Chase Brooks, owner of a store in Raleigh and one of the three in Fuquay-Varina, said to the board, “There is a lot of false information out there about us.”

Brooks called electronic gaming “modern day bingo.” He said a majority of his customers are women 30 years and up. “They come to socialize and relax,” he said. In answer to questions, he said most stay between an hour and an hour and a half, that most spend between $20 and $35. He compared that figure to what it costs to go to the movies or play golf. Brooks said his local store gets about 70 patrons a day. He said the store opens at 7 or 8 a.m. and stays open as long as there are patrons, sometimes 20 to 24 hours a day. The longer hours occur mostly on weekends, he said.

Brooks said most winners at the games get $40 to $60. His largest pay-out has been about $4,000, he said. Brooks emphasized that the games are true sweepstakes, all preprogrammed as to winners. The operator of the store has nothing to do with where wins will occur, he said.

The Town of Aberdeen’s definition of Electronic Gaming Operations, which Fuquay-Varina has chosen to adopt, reads as follows:

“Any business enterprise, whether as a principal or accessory use, where persons utilize electronic machines, including but not limited to computers and gaming terminals, to conduct games of chance, including sweepstakes, and where cash, merchandise or other items of value are redeemed or otherwise distributed, whether or not the value of such distribution is determined by electronic games played or by predetermined odds. Electronic gaming operations may include, but are not limited to, internet cafes, internet sweepstakes, electronic gaming machines/operations, or cybercafés. This does not include any lottery approved by the State of North Carolina or any nonprofit operation that is otherwise lawful under State law (for example, church or civic organization fundraisers).”