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People are winning — and losing — big at this hot NC arcade trend. But is it legal?

Behind the locked front door and tinted windows of the Tank Arcade, people are winning — and losing — big.

In a back room, a woman’s voice breaks through the rattle of plastic buttons being slapped over and over again.

“Good shot,” she says.

Garish aquatic creatures swim across a 55-inch TV screen embedded in the six-foot game table. If you shoot and kill one — sometimes a whale, a sea dragon or monster crab — you win points. Points are redeemable for cash or more credits to keep playing.

This is the fish game.

Twelve years after North Carolina’s ban on video poker machines, fish game tables are flourishing across the state. Charlotte has one of the highest concentrations of fish game arcades with at least 40, although authorities say there could be twice that many in the city.

Arcade operators maintain they’re following state law because they say the money a person can win is based on skill, not luck.

Police agencies are skeptical, saying fish games may violate the state’s gambling laws and that arcades attract crime.

But neither the Attorney General’s office nor the State Bureau of Investigation have clarified whether the games are legal, leading to inconsistent enforcement across the state.

In Greensboro, for example, police have banned fish games.

In other cities, though — including Charlotte and Raleigh — fish game arcades openly advertise, with neon lights, big banners and packed parking lots. Some police agencies told The Charlotte Observer they suspect illegal gambling inside the arcades but they don’t know whether a judge or a prosecutor will agree.

In the city of Concord, officials took up the issue on their own last year and put restrictions on arcades. The police chief still says state lawmakers need to step in and clarify what’s legal and what’s not.

“The state legislature created this mess and they need to fix it. The law is as clear as mud,” says Concord Police Chief Gary Gacek.

Even some in the arcade business want clearer rules.

“The state should come in and say this is legal and this is not. And the operators would comply,” says Terry Wood, who has owned three arcades in North Carolina. He sold his last arcade, in Salisbury, after a part-time employee was fatally shot inside during a domestic argument.

Inside a typical arcade, rows of stand-up arcade machines, computers and fish games cast a colorful glow inside otherwise low-lit buildings. The atmosphere is casual, with upbeat music playing over house speakers.

‘Like a social club’

The money, operators say, is good.

In a week’s time, a large arcade can easily collect $50,000 in revenue, according to several employees and police investigators. Smaller locations with fewer customers might pull in about $10,000 weekly.

Some customers stay in the arcades hours at a time, managers say. Investigators say they’ve talked to players who, over a few hours, make multiple ATM runs for more cash.

The lure is to “play their money and see if they can double their money,” explains Keisha Reed, employee at the Tank Arcade location on West Boulevard in Charlotte.

“When you lose, it’s a hard pill to swallow,” she said. “And you’re not guaranteed to win every time.”

Many arcades stay open 24/7. Inside, customers are often fed free food and drinks.

“Once they start coming here, it’s like a social club for them,” says Rio Simpson, manager at Xpress Arcade on Moores Chapel Road in Charlotte.

The cost to play, though, is high for some.

“Every time you hit the trigger, you’re spending money,” says Gary Gray, executive director of the North Carolina Council on Problem Gambling.

Gambling addiction and the number of people who ask for help to quit has been on the rise in North Carolina, according to statistics from the state’s hotline and counseling program.

Hotline calls jumped from 3,825 between July 2015 and June 2016 to 6,113 calls from July 2017 to June 2018. The lottery and casino games are the most-often cited problems, with sweepstakes and arcades making up about 16 percent of the people who are referred to gambling counseling through the hotline.

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Some people are more susceptible to an addictive video game than others, Gray said. Arcades in North Carolina, he said, are often found near low-income neighborhoods, where people can least afford to lose.

“I’ve had a ton of phone calls from family members of people losing money at these things. We’ve had people lose their homes, lose their marriages ... You can lose an entire paycheck in one evening.”

Twelve years after North Carolina banned video poker machines, fish game tables are flourishing across the state’s small towns and big cities.

Top agencies silent

The fish game isn’t new.

Experts believe the fish game was first popularized in China more than ten years ago, according to Waypoint, VICE Media’s gaming news and culture website. Since then, the games have been found in arcades worldwide from Singapore to Australia.

In the United States, news reports show law enforcement officials have raided fish arcades in places like Hawaii, Colorado, California and Florida.

In North Carolina, fish tables have taken off the last 18 months, police say.

The Attorney General’s Office, which often assists local police in prosecuting crimes, said it’s aware of fish games. But when asked by the Observer, the AG’s office would not say whether the games violate state gambling laws or whether it has given any advice to District Attorneys in the state on how to handle criminal charges related to fish games.

Similarly, the SBI — which has special agents to investigate gambling in North Carolina — would not say specifically whether fish games violate the law.

In response to the Observer’s questions, the SBI cited North Carolina’s law against “slot machines” and other video games where people bet money. Legal amusement games, according to the agency, can only offer prizes or merchandise worth $10 or less. Exchange of scores or “tallies” in the game for money is not allowed.

“If a fish game or any other other gaming device is in violation of this statute or other North Carolina General Statutes for gambling and gaming, then it would be unlawful for them to operate said gaming devices,” an SBI spokesperson said.

So far, the SBI has not raided any fish game arcades or made any fish game-related arrests in North Carolina.

The issue, then, has been left to local officials.

The Observer’s investigation found numerous police agencies and district attorneys handling arcades in vastly different ways. The patchwork of enforcement also extends to local zoning and business regulations.

For example, a few municipal governments require arcades to register, limit their operating hours and don’t allow tinted windows. Others deny operating permits on the basis that gambling is outlawed.

Crime at arcades is like a “free for all,” says Charlotte-Mecklenburg Police Department Detective Travis Cook, who specializes in gambling and alcohol investigations. Some crimes, he suspects, go unreported to police because operators may be worried they could be arrested on gambling charges.

Is it ‘skill’ or luck?

Nearly every form of betting is considered illegal gambling in North Carolina except for the state-run lottery, the casino on Cherokee Indian land and bingo games run by charities. Even buddies playing for keeps around a small poker table is technically illegal but rarely, if ever, enforced.

Where things get blurry over what’s legal and what’s not tends to center on a part of state law that permits adults to win money if a game is based on “skill” or “dexterity” — not just luck.

Many games have faced legal scrutiny before the fish game: video poker, slot machines and, most recently, sweepstakes.

Historically, it’s taken a judge in North Carolina and years of legal jousting to determine whether a gambling machine complies with the legal definition of “skill.” In the case of sweepstakes, lawsuits and challenges to the state law started more than five years ago and still aren’t settled in all jurisdictions.

Fish games, too, are “going to be an argument in court one day,” predicts Capt. Aaron Barlow, supervisor of the investigative division at the Caldwell County Sheriff’s Office.

In court, both arcade and police attorneys often call expert forensic witnesses to weigh in on whether a machine’s inner-workings prove the game is based on pure chance or a player’s skill.

The Caldwell County Sheriff’s Office has investigated and made arrests inside local gaming businesses over the past few years. The names and look of the games changes — “The gaming industry will find different loopholes,” Barlow said — but he believes the premise is always the same:

“It’s an (illegal) video poker machine,” Barlow said.

Naturally, though, fish game managers disagree.

Historically, it’s taken a judge in North Carolina and years of legal jousting to determine whether a gambling machine complies with the legal definition of “skill.”

Plans to expand

Inside a typical arcade, rows of stand-up arcade machines, computers and fish games cast a colorful glow inside otherwise low-lit buildings. The atmosphere is casual, with upbeat music playing.

Many locations have installed ventilation systems and allow smoking inside. There’s usually more than one game available but fish games are the newest and most popular, especially among young adults.

Arcades are open to adults only and can’t sell alcohol. The locations the Observer visited have dozens of security cameras and an armed guard. Weapons aren’t allowed inside, except by employees.

There are stories of players betting $5 and winning $400. There are customers who say the arcade is a safe alternative to the street.

Dale and Vonne Gregory say their workers and customers at Tank Arcade are like family.

They say they left their jobs at a major multi-national shipping and delivery company to manage the arcade. Now, they manage two locations in Charlotte and have plans to open a third.

Vonne Gregory says she vets the machines inside to make sure they comply with state gambling laws and to make sure the payouts and accounting for cash are fair. They’ve also made improvements to the building to meet fire code and enhance security and safety, she said.

Several of their regular customers are senior citizens. They told the Observer that the arcade has improved their neighborhood by establishing a business in a vacant building where otherwise squatters, prostitutes or drug dealers would take residence.

Arcade managers say they pay a percentage — usually around 25 percent — of the weekly take from fish games to the supplier who owns the table and is leasing it to the arcade. The games — with names like Ocean King, Fish Hunter and Turtle Revenge — appear to be mostly manufactured overseas though some companies advertise tables “Made in the USA.”

None of the arcade managers or employees the Observer spoke with were willing to say which company or person supplies their fish tables or who hired them to run the business.

Detective M.J. Calvert with the Greensboro Police Department suspects the secretive chain of command is by design. He works for the department’s vice and narcotics unit.

“If you’re the owner, you may only show up once when you set up the business,” Calvert said. “You sit back and collect all the money while these other folks are having to handle all the risks.”

‘Fight the fight’

The risk in Greensboro for running an arcade is a felony gambling charge.

Police there have been among the most aggressive in the state to shut down fish game arcades.

At the peak of operation last summer, there were about 45 arcades in Greensboro. Now, there are only a handful. Calvert says those are operating underground and remain under investigation.

Greensboro saw a mass exodus of fish games in late 2017 after its police chief sent a warning letter to operators, saying they had to close their doors or face criminal prosecution. Most arcades heeded the warning and left voluntarily. Only a few stayed open, prompting police to take their equipment and arrest operators.

One of those operators hired a lawyer and sued the city. His lawyer, Jonathan Trapp of Durham, asked a judge for a temporary injunction or restraining order against police. But, that was denied.

Trapp says his client operated games of skill, allowed under state law. The fish game, he contends, requires strategy, timing and experience.

“You have to have a feel for it ... You have to figure out how the table is running.”

Recently, Trapp dropped a lawsuit against Greensboro Police because he doesn’t believe his client can have a fair hearing in Guilford County where the District Attorney’s Office has already determined fish games are illegal. The arcade operator’s criminal charges were dropped in exchange for agreeing to keep the two Greensboro locations, Fish Palace I and II, closed.

“We’re going to fight the fight somewhere else,” Trapp said.

He said he’s representing fish game clients with legal issues in communities across the state — from Rocky Mount to Lumberton and from Winston-Salem to Pinehurst.

Too much crime?

Gambling isn’t the only thing police say they’re worried about.

Arcades are often associated with a high frequency of robberies, shootings and other crimes, says Eddie Caldwell, attorney with the N.C. Sheriff’s Association.

There have been deadly robberies and homicides in many arcades across the state including in Charlotte, Burlington, Salisbury and Greensboro. And, the amount of cash inside, police say, attracts criminals.

In Lumberton, for instance, three men ambushed a security guard in a parking lot as he walked a winning customer to their vehicle, The Robesonian newspaper reported in May. The Robeson County Sheriff’s Department told the newspaper the men took the guard’s gun and forced him back inside where they robbed the arcade and stole money from the one customer.

Crime at arcades is like a “free for all,” says Charlotte-Mecklenburg Police Department Detective Travis Cook, who specializes in gambling and alcohol investigations. Some crimes, he suspects, go unreported to police because operators may be worried they could be arrested on gambling charges.

CMPD, though, has yet to aggressively pursue shutting down the fish games.

Instead, the police department is waiting to see the results of one pending gambling case resulting from an arrest and search warrant at an arcade on Westinghouse Boulevard in December. The manager there is charged with a felony for operating five or more illegal gambling machines. He did not return several phone calls from the Observer.

CMPD detectives have visited many locations to give advice on securing doors and setting up video surveillance systems.

At both Tank Arcade and Xpress Arcade, managers said they aren’t worried about police shutting down fish games.

Vonne Gregory says she wants to start a business network among arcade managers to help each other reduce crime, improve safety and report people who try to cheat or cause problems inside an arcade. She recently began keeping surveillance photos of troublemakers in the arcade for a “wall of shame” after a patron broke into a fish game table and stole cash.

“If everyone communicates and works together, everyone can still eat,” she says. “We can cut down the robberies, cut down the shootings and keep people employed.”

Anna Douglas: 704-358-5078, @ADouglasNews

Need help?

If you or someone you know needs help with problem gambling, the state of North Carolina provides free counseling and other confidential resources to individuals and their loved ones. The hotline number is 877-718-5543 or text “morethanagamenc” to 53342.

Editor’s note: An earlier version of this story said the city of Concord prohibits arcades. City officials have clarified that the city has placed restrictions on the arcades, limiting where they can locate and requiring enhanced security measures.