Last week it was announced by federal prosecutors that they had reached an agreement with half a dozen major providers requiring them to stop servicing hundreds of so-called internet sweepstakes cafes in North Carolina with equipment and software.

If all operations in the state cease by July 1, federal prosecutors for the Eastern District of North Carolina will not bring charges for past illegal activities.

North Carolina has passed several laws to stem the spread of the gambling parlors and police have led several raids on the establishments in an effort to shut them down. In early 2013 North Carolina’s Supreme Court upheld the state’s ban on the machines and within a few months authorities started cracking down. Among other police actions, Little Vegas Sweepstakes City parlors in Cumberland County were raided in March 2013 with machines seized, and owners along with a few employees arrested. Operating sweepstakes machines is a misdemeanor for a first offense and a felony for subsequent offenses.

The Cumberland County Sheriff said following the announcement, “For several years, video poker machines have been masquerading as sweepstakes,” he added, “We hope these agreements will stop and deter evasion of North Carolina’s gambling laws. We have long been involved in this fight, and we will not stop until the laws passed by the legislature and the North Carolinians they represent are fully enforced.”

Over 600 Internet cafes will find themselves without machines or software with the retreat of the 6 companies. The companies involved in the federal agreement include White Sands Technology, TNT Software, Digital Reveal, Sierra Software, HSV Entertainment, and Figure 8 Technologies.

An industry group representing sweepstakes companies said they are trying to get legislators to legalize the games before the July 1 deadline.

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