NC Appeals Court Upholds Skill Game Ban

RALEIGH, N.C. — On the final day of 2024, a panel of judges from the North Carolina Court of Appeals issued a split-decision victory for law enforcement officials in Robeson County, upholding the county’s ban on unlicensed electronic gaming machines. The ruling, which applies to a case brought by the operator of a series of so-called “skill games,” is expected to have broader implications for the legal landscape surrounding gaming in the state, including the potential for future online casino regulation.

The case in question, No Limit Games v. Sheriff of Robeson County, revolves around the legality of unlicensed electronic gaming terminals operated by No Limit Games at private businesses within the county. In May 2023, the company filed a complaint arguing that its machines, which incorporate an element of skill into what is otherwise a game of chance, should be exempt from state gambling regulations. The company contended that the terminals functioned as video sweepstakes, which North Carolina law permits under specific conditions.

However, the appellate court disagreed. On December 31, 2024, a three-judge panel ruled in favor of law enforcement, stating that No Limit Games' terminals represented unlicensed gambling because “their prize is determined by chance.” This ruling enables Robeson County authorities to proceed with enforcement actions against the company, which has operated machines in several local businesses.

 

Legal Back-and-Forth

The case has seen several twists since it began in 2023. Initially, a lower court sided with No Limit Games, granting an injunction that blocked law enforcement from seizing the terminals. However, the North Carolina Court of Appeals swiftly intervened, issuing a superseding injunction in September 2023. The December 31 ruling, which favored law enforcement, solidified that action, marking a significant legal setback for No Limit Games.

The company’s legal team has indicated its intention to appeal the decision to the North Carolina Supreme Court. However, the state's highest court has discretion on whether it will hear the case, leaving the matter in a state of uncertainty for the time being.

 

A National Debate on “Skill Games”

The issue of unlicensed electronic gaming machines, often referred to as “skill games,” has not only been contentious in North Carolina but also across the U.S. Other states, including Virginia and Kentucky, have recently passed or considered similar bans. In May 2024, Virginia Governor Glenn Youngkin vetoed a bill that would have regulated these machines, leaving operators at risk of criminal prosecution if they continue to offer the terminals. Kentucky has already enacted a ban, and Pennsylvania's Supreme Court has heard multiple cases regarding the legality of such games.

The national attention on “skill games” reflects the growing complexity of regulating gambling that blends elements of skill and chance. While these games are designed to give players some control over the outcome, the randomization of the prizes still places them within the realm of chance, which in many states is classified as gambling.

The court ruling has broader implications for the future of regulated gambling in North Carolina, especially in relation to the potential legalization of online casinos. While the state has not yet legalized online slots or table games, the success of online sports betting—legalized in 2023—has prompted speculation that lawmakers could revisit the issue of online casino gambling in the coming years.

If such a conversation were to emerge, the ban on unlicensed “skill games” could clear a path for online casino operators to make a more compelling case for the legalization of online gambling. In neighboring Virginia, for instance, businesses that operate skill games have come to rely on these machines as a key revenue stream. As a result, there have been legislative attempts to regulate the machines, but with significant pushback from gaming operators who see online gambling as a potential competitor.

In contrast, North Carolina’s relatively limited presence of skill games means that businesses offering these machines would not be able to strongly argue against the expansion of online casinos, should the state decide to pursue such a move.

While North Carolina has not shown any immediate signs of expanding into the realm of regulated online casinos, some experts believe that this ruling could play a role in easing regulatory concerns. If lawmakers do choose to consider such a step in the future, the lack of a significant “skill game” industry could help facilitate that conversation, as businesses would have fewer established interests to protect.

 

Their prize is determined by chance,” stated the North Carolina Court of Appeals, reinforcing that No Limit Games’ terminals constitute unlicensed gambling.

 

Looking Ahead

As of now, there is no definitive timeline for the legalization of online casinos in North Carolina, and the current regulatory focus remains on sports betting. However, the court’s December 31 decision suggests that the state’s legal framework for gambling could evolve in a way that allows for online casino expansion. If this happens, the absence of a robust “skill game” industry in the state would likely make the path smoother for the introduction of regulated online gambling, should it be deemed a priority by lawmakers.

For No Limit Games, the legal battle is far from over, and any potential appeal to the North Carolina Supreme Court could have further implications for the state's gambling laws. Whether the ruling will have lasting effects on North Carolina's broader gambling landscape, particularly in regard to online casinos, remains to be seen.