North Texas "Sweepstakes Gaming" Company Guilty of Running Illegal Gambling Operation

Over the past several years, in shopping malls and storefronts across the country, entrepreneurs have begun operating what are called sweepstakes parlors. They look and smell like miniature casinos, and they're lined with terminals featuring electronic games that bear an uncanny resemblance to slot machines, video poker and other games on which money tends to be wagered. But they aren't, their proprietors claim. That would be illegal, at least in most of the states where they operate.

Sweepstakes parlors have skirted state gambling laws, or tried to, by selling a product or service (often Internet access or phone cards, according to Wikipedia), then entering purchasers into a sweepstakes in which they can win cash by playing a game of chance. Think of playing the McDonald's Monopoly game, subtracting the hamburgers and adding the creepy casino atmosphere

At the forefront of the sweepstakes gaming trend -- indeed "the originator" of the entire industry, if its website is to be believed -- is a Haltom City software company called HEST Technologies.

HEST spills a lot of ink elaborating on just how above-board and completely legal its products are. So legal is it, that it touts its software as a fabulous way for charities and nonprofits to raise money. But its compatriots in the sweepstakes industry have found themselves on the losing end of a lot of arguments of late. In August, the Wall Street Journal reported that "there are bans, criminal complaints or lawsuits pending in roughly 20 states."

Make that 21. Texas Attorney General Greg Abbott announced this afternoon announcing that HEST Technologies pleaded guilty to engaging in organized criminal activity for gambling offenses. Its president, Chris Canard, pleaded guilty to the organized crime charge and for money laundering. Three others, including Canard's wife, also entered guilty pleas.

"HEST Technologies' promotional materials claimed that they develop 'sweepstakes promotional systems,'" Abbott's press release says. "However, the so-called 'sweepstakes' systems actually constituted an illegal lottery using gambling devices."

Law enforcement officers took a good deal of equipment and $1.5 million in gambling proceeds from a pair of HEST's Tarrant County offices. None of the guilty parties face jail time, though they will be forced to pay fines and be placed on community supervision. As for HEST, the company has to stop operating and dissolve within a year, which means it can no longer help bankroll charities. Because that's what the operation was all about: charity.

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Eric Nicholson
Contact: Eric Nicholson