Title: Crazie Overstock Promotions, LLC v. State
Citation: N/A
Docket Number: 345PA19
State: north-carolina
Issuer: north-carolina Supreme Court
Date: June 11, 2021

IN THE SUPREME COURT OF NORTH CAROLINA 
2021-NCSC-57 
No. 345PA19 
Filed 11 June 2021 
CRAZIE OVERSTOCK PROMOTIONS, LLC 
 
 
v. 
STATE OF NORTH CAROLINA; and MARK J. SENTER, in his official capacity as 
Branch Head of the Alcohol Law Enforcement Division 
 
On discretionary review pursuant to N.C.G.S. § 7A-31 of a unanimous decision 
of the Court of Appeals, 266 N.C. App. 1 (2019), affirming, in part, and reversing and 
remanding, in part, an order entered on 7 August 2018 by Judge Vince M. Rozier, Jr., 
in the Superior Court, Alamance County.  Heard in the Supreme Court on 23 March 
2021. 
 
Morningstar Law Group, by Keith P. Anthony and William J. Brian, Jr., for 
plaintiff-appellant. 
 
Joshua H. Stein, Attorney General, by Olga E. Vysotskaya de Brito, Special 
Deputy Attorney General; Ryan Y. Park, Solicitor General; and James W. 
Doggett, Deputy Solicitor General, for the State-appellees. 
 
Edmond W. Caldwell, Jr., and Matthew L. Boyatt for North Carolina Sheriffs’ 
Association; Fred P. Baggett for North Carolina Association of Chiefs of Police; 
and Jim O’Neill for North Carolina Conference of District Attorneys, amici 
curiae. 
 
 
ERVIN, Justice. 
 
¶ 1 
 
This case arises from an enterprise developed and operated by plaintiff Crazie 
Overstock, LLC, which has sought in this litigation to enjoin enforcement measures 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
taken by the State and certain members of the State’s Alcohol and Law Enforcement 
Division1 stemming from the belief that a Rewards Program encompassed within the 
operation of Crazie Overstock’s enterprise violates various provisions contained in 
Article 37 of Chapter 14 of the North Carolina General Statutes.  For the reasons set 
forth in more detail below, we modify and affirm the decision of the Court of Appeals. 
¶ 2 
 
Crazie Overstock sells discount goods, such as furniture, jewelry, kitchen 
goods, movies, music, and electronics on its website and through licensed retail 
establishments which are operated by independent owners.  Although Crazie 
Overstock’s customers have the ability to view the goods that are offered for sale, both 
in these retail establishments and on Crazie Overstock’s website, the goods in 
question may only be purchased through its website. 
¶ 3 
 
The retail establishments through which Crazie Overstock operates feature a 
“showroom” in which samples of the goods that are available through Crazie 
Overstock’s website are displayed.  In addition, these retail establishments contain 
computers, which Crazie Overstock refers to as “order stations,” that are connected 
to the internet and through which customers have the ability to order products from 
Crazie Overstock’s website.  In addition, customers are also entitled to place orders 
                                            
1 More specifically, Crazie Overstock has sought relief in this case against Mark J., 
Senter, individually and in his official capacity as Director of the Alcohol Law Enforcement 
Division, and Iris L. Redd, Kelly J. McMurray, Chris Poole, and Brian Doward, each of whom 
are agents of the Alcohol Law Enforcement Division; in their official and individual 
capacities. 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
through Crazie Overstock’s website from any location at which an internet connection 
is available.  Crazie Overstock’s customers have the ability to either order goods 
through the website using a credit card or to purchase electronic gift certificates at 
retail establishments which the customer can use to purchase goods through Crazie 
Overstock’s website. 
¶ 4 
 
The customers who purchase gift certificates at the retail establishments 
through which Crazie Overstock operates pay $1.00 for each $1.00 of credit that is 
available in connection with a particular gift certificate.  Each customer who 
purchases a gift certificate receives a receipt bearing a number which can be 
registered with and credited to the customer’s account, which, in turn, can be accessed 
using an individual username and password at an order station or on any device that 
is connected to the Crazie Overstock website through the internet.  In view of the fact 
that the value of any gift certificate that a customer may purchase is not 
automatically loaded into the customer’s account, gift certificates may be freely 
transferred from the customer to other persons.  Although customers may utilize gift 
certificates to purchase goods through the Crazie Overstock website, any such 
purchases involve separately stated shipping and handling charges that the customer 
must cover using a credit card. 
¶ 5 
 
The portion of Crazie Overstock’s enterprise that underlies this case is known 
as the Rewards Program and revolves around the use of gift certificates to play two 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
electronic games.  In order to play these games, a customer is required to obtain Game 
Points by either (1) purchasing a gift certificate, with 100 Games Points being 
provided to the customer for every $1.00 that the customer pays in order to purchase 
that gift certificate; (2) “mailing a handwritten post card . . . contain[ing] the 
[customer’s] name; address; city; state; zip code; age; date of the request for Game 
Points; and the name and store address” at which the points are to be used; (3) 
making an “in-store request from the cashier at a Retail Establishment’s point-of-sale 
terminal”; or (4) “through the award of bonus Game Points by Retail Establishments 
to customers who purchase certain amounts of gift certificates.”  After obtaining the 
required Game Points, the customer may use them to play the two electronic games. 
¶ 6 
 
In the first of the two electronic games, which consists of a game of chance 
called the Reward Game, the customer is entitled to utilize Game Points for the 
purpose of attempting to win Reward Points.  The Reward Game features eighteen 
reel-spinning games which are played on an electronic machine during which various 
icons appear when the reel is spun.  The results derived from playing the Reward 
Game are “drawn randomly for each of the [eighteen] different Reward Games . . . 
from a finite pool of possible results,” with “some results [being] associated with 
Reward Points while others are not.”  A customer who is successful in playing the 
Reward Game receives a number of Reward Points equal to a multiple of the number 
of Game Points which the customer utilized in order to play the Reward Game.  In 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
the event that the customer is unsuccessful during his or her attempts to play the 
Reward Game, he or she is still awarded 100 Reward Points. 
¶ 7 
 
After playing the Reward Game, the customer is entitled to take the Reward 
Points that he or she earned playing the Reward Game and utilize them to participate 
in a game of skill called the Dexterity Test.  The Dexterity Test involves the use of a 
simulated stopwatch that counts from 0 to 1,000 and back at a rapid rate.  During 
the course of the Dexterity Test, the customer is allowed three attempts to stop the 
stopwatch on a number as close to 1,000 as possible, with the customer being awarded 
Dexterity Points based upon his or her best result.  In the event that the customer 
stops the simulated stopwatch at a point between 951 and 1,000, one-hundred percent 
of the Reward Points that the customer used to play the Dexterity Test are converted 
to Dexterity Points, which can be redeemed for a cash payment calculated at the rate 
of $1.00 for every 100 Dexterity Points.  In the event that the customer stops the 
simulated stopwatch at a point between 901 and 950, ninety percent of the Reward 
Points that the customer used to play the Dexterity Test are converted to Dexterity 
Points.  In the event that a customer stops the simulated stopwatch at a point 
between 801 and 900, fifty percent of the Reward Points that the customer used to 
play the Dexterity Test are converted to Dexterity Points.  In the event that the 
customer stops the simulated stopwatch at a point between 0 and 800, he or she does 
not win any Dexterity Points.  On the other hand, the Reward Points that any such 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
unsuccessful customer utilized to play the Dexterity Test are converted into Game 
Points so as to allow the customer to play the Reward Game in the hope of winning 
additional Reward Points. 
¶ 8 
 
The record reflects that ninety-five percent of the customers who play the 
Dexterity Test successfully stop the simulated stopwatch at a point above 800 on at 
least one of their three attempts so as to win some amount of money.  As a result, a 
customer who successfully plays the Reward Game and proceeds to play the Dexterity 
Test will likely recoup some portion of the money that he or she utilized in purchasing 
the gift certificate that allowed him or her to play the games.  However, in the event 
that the customer does not successfully play the Reward Game, the cash price that 
he or she is able to win is limited to a maximum of $1.00.  In addition, the customer 
retains the full value of the gift certificate that he or she purchased and is entitled to 
use it to purchase merchandise from Crazie Overstock’s website. 
¶ 9 
 
On 24 May 2016, Crazie Overstock filed a complaint against defendants in 
which it sought (1) a declaratory judgment that the Rewards Program is lawful and 
did not violate N.C.G.S. §§ 14-289 (prohibiting the advertisement of lotteries), 14-290 
(prohibiting “[d]ealing in lotteries”), 14-292 (prohibiting gambling, defined as “any 
game of chance or any person who plays at or bets on any game of chance at which 
any money, property or other thing of value is bet, whether the same be in stake or 
not”), 14-306 (defining slot machines), 14-306.1A (prohibiting the use of video gaming 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
machines, including a “video game not dependent on skill or dexterity that is played 
while revealing a prize as the result of an entry into a sweepstakes”), 14-306.3 
(prohibiting certain game promotions), 14-306.4 (prohibiting the operation of “an 
electronic machine or device” to play a “video game not dependent on skill or dexterity 
that is played while revealing a prize as the result of an entry into a sweepstakes,” 
with a “prize” being “any gift, award, gratuity, good, service, credit, or anything else 
of value”), or “any other applicable law of this State”; (2) permanent injunctive relief; 
(3) a request for a declaratory judgment that Director Senter and Agents McMurray, 
Poole, Doward, and Redd had deprived Crazie Overstock of its constitutional right to 
procedural due process; (4) prospective injunctive relief against Director Senter and 
Agents McMurray, Poole, Doward, and Redd based upon alleged violations of 42 
U.S.C. § 1983; and (5) damages against Agents McMurray, Poole, Doward, and Redd, 
in their individual capacities, jointly and severally, for violations of 42 U.S.C. § 1983.  
The injunctive relief that Crazie Overstock sought in its complaint included enjoining 
defendants from (1) warning or threatening any current or potential North Carolina 
retail establishment that it might be subject to criminal or administrative sanctions 
if it continued to display or sell Crazie Overstock gift certificates or operate 
equipment associated with the Rewards Program; (2) citing any North Carolina retail 
establishment for criminal or administrative offenses or violations based upon the 
display or sale of Crazie Overstock gift certificates or products, or the operation of 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
any equipment associated with the Rewards Program; (3) compelling or attempting 
to compel, coerce, or persuade any North Carolina retail establishment to remove 
products and equipment associated with the Rewards Program or to refrain from 
selling or operating any such items; (4) making or issuing any statement outside of 
the proceedings in this case alleging or contending that any gift certificates, products, 
or equipment associated with the Rewards Program constituted an illegal gambling 
arrangement, lottery, game of chance, slot machine, or unlawful device; and (5) filing 
any false or misleading affidavits or otherwise engaging in any similar deceptive or 
unlawful conduct in connection with any investigation into the activities in which 
Crazie Overstock or any retail establishment offering the Rewards Program has 
engaged. 
¶ 10 
 
On 1 July 2016, defendants filed a motion to dismiss Crazie Overstock’s 
complaint pursuant to N.C.G.S. §§ 1A-1, Rules 12(b)(1), (2), and (6), in which they 
contended that Crazie Overstock’s claims were barred by the doctrines of sovereign 
immunity, public official immunity, and qualified immunity and asserting that 
Crazie Overstock’s request for a declaratory judgment that its Rewards Program did 
not violate N.C.G.S. § 14-306.4 failed to state a claim upon which relief might be 
granted.  On 13 April 2017, the trial court entered an order denying defendants’ 
dismissal motion. 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
¶ 11 
 
On 17 March 2017, Crazie Overstock filed a motion seeking the issuance of a 
preliminary injunction that provided the same relief that it sought in that portion of 
its complaint seeking the issuance of a permanent injunction.  On 16 May 2017, the 
trial court entered a temporary restraining order precluding defendants from taking 
certain actions against Crazie Overstock and any retail establishments participating 
in the Rewards Program pending a decision concerning Crazie Overstock’s request 
for the issuance of a preliminary injunction.  On 12 July 2017, defendants filed an 
answer in which they denied the material allegations set out in Crazie Overstock’s 
complaint and asserted a number of affirmative defenses, including public official 
immunity, sovereign immunity, qualified immunity, and estoppel. 
¶ 12 
 
A hearing concerning the merits of Crazie Overstock’s motion for the issuance 
of a preliminary injunction was held before the trial court on 29 September 2017, 5 
and 6 October 2017, and 2 and 3 November 2017.  On 13 December 2017, the trial 
court entered an order denying Crazie Overstock’s motion for preliminary injunctive 
relief.  In making this determination, the trial court concluded that Crazie Overstock 
had failed to demonstrate that it was likely to succeed on the merits given (1) that 
“[t]he fact that Crazie Overstock’s games involve some level of skill and dexterity in 
and of itself is not enough to show a likelihood of prevailing on the merits”; (2) that 
“[t]he test for determining whether a game is prohibited under North Carolina law is 
not whether the game contains an element of skill,” but is, “[i]nstead, . . . whether 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
chance is the dominating element that determines the result of the game,” citing 
Sandhill Amusements, Inc. v. Miller, 236 N.C. App. 340, 368 (2014), rev’d per curiam 
on the basis of the dissenting opinion, 368 N.C. 91 (2015); and (3) that “[t]he element 
of chance predominates any amount of skill or dexterity that may be present in Crazie 
Overstock’s games, and therefore the Crazie Overstock Rewards Program may violate 
N.C.G.S. § 14-306.4 and other North Carolina gambling provisions.”  In addition, the 
trial court concluded that Crazie Overstock had failed to show that it was likely to 
sustain an irreparable injury in the absence of the issuance of the requested 
preliminary injunction given that (1) “Crazie Overstock’s ability to sell goods over the 
internet will in no way be affected by law enforcement officials being allowed to 
enforce what they believe to be violations of the gambling laws of North Carolina as 
performed by retail establishments that are operating the Crazie Overstock Rewards 
Program”; (2) “[Crazie Overstock] will still be able to use its website to sell goods over 
the internet and may continue to license retail establishments to promote the sale of 
their goods by displaying goods for sale and selling gift certificates”; and (3) “[t]he 
only impact not entering an injunction will have is that the retail establishments, 
that are not a party to this action, will not be able to continue to use the Crazie 
Overstock Rewards Program until such time as a trial/hearing on the merits is 
conducted and this Court rules on the pending declaratory judgment action.” 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
¶ 13 
 
On 11 July 2018, defendants filed a motion seeking the entry of summary 
judgment in their favor on the grounds that the record did not reveal the existence of 
any genuine issues of material fact and that defendants were entitled to judgment as 
a matter of law with respect to Crazie Overstock’s claims pursuant to N.C.G.S. §§ 14-
306.1A and 14-306.4.  On 20 July 2018, Crazie Overstock voluntarily dismissed its 
claims against Agents McMurray, Poole, Doward, and Redd, in both their individual 
and official capacities, without prejudice and the claims that it had asserted against 
Director Senter in his individual capacity.  In addition, Crazie Overstock voluntarily 
dismissed the claims that it had asserted pursuant to 42 U.S.C. § 1983 relating to 
alleged violations of its procedural due process rights and its request for prospective 
relief against Director Senter without prejudice, leaving the State and Director 
Senter, acting in his official capacity, as the only remaining defendants. 
¶ 14 
 
On 25 July 2018, defendants’ summary judgment came on for a hearing before 
the trial court.2  On 7 August 2018, the trial court entered an order determining that 
there were no genuine issues of material fact with respect to the claims that Crazie 
                                            
2 At the hearing, Crazie Overstock objected to consideration of the expert reports 
submitted by defendants on behalf of Andrew Baran and Katrijn Gielens on the grounds that 
those reports had not been properly authenticated, that the reports had not been submitted 
in a timely manner, that the report prepared by Ms. Gielens contained new opinions that had 
not been previously disclosed in discovery, and that Mr. Baran’s report invaded the province 
of the trial court by offering opinions concerning the ultimate issue of whether Crazie 
Overstock’s Reward Program violated N.C.G.S. §§ 14-306.1A and 14-306.4.  As a result, the 
trial court “excluded this information from consideration in its evaluation of the motion for 
summary judgment.” 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
Overstock had advanced pursuant to N.C.G.S. §§ 14-306.1A and 14-306.4 and that 
defendants were entitled to judgment with respect to those claims as a matter of law.3  
As a result, the trial court allowed defendants’ motion for summary judgment, 
resulting in the dismissal of each of Crazie Overstock’s remaining claims and the 
entry of final judgment in favor of defendants.  Crazie Overstock noted an appeal to 
the Court of Appeals from the trial court’s order. 
¶ 15 
 
In seeking relief from the trial court’s order before the Court of Appeals, Crazie 
Overstock argued that the trial court had erred by concluding that the Rewards 
Program violated N.C.G.S. §§ 14-306.1A and 14-306.4.  As an initial matter, the Court 
of Appeals noted that N.C.G.S. § 14-306.1A “prohibits one from placing into operation 
a video gaming machine which allows a patron to make a wager for the opportunity 
to win money or another thing of value through a game of chance” and that N.C.G.S. 
§ 14-306.4 “prohibits one from placing into operation an electronic machine which 
allows a patron, with or without the payment of consideration, the opportunity to win 
a prize in a game or promotion, the determination of which is based on chance.”  
Crazie Overstock Promotions, LLC v. State, 266 N.C. App. 1, 5 (2019).  According to 
the Court of Appeals, “[o]ne difference between [N.C.G.S. § 14-306.4] and [N.C.G.S. §] 
                                            
3 In light of this determination, the trial court declined to rule upon the claims that 
Crazie Overstock had advanced pursuant to N.C.G.S. §§ 14-289, 14-290, 14-292, 14-306, and 
14-306.3. 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
14-306.1A is that a violation of [N.C.G.S. § 14-306.4] can occur even if the patron is 
not required to wager anything for the opportunity to win a prize.”  Id. 
¶ 16 
 
After noting that N.C.G.S. §§ 14-306.1A and 14-306.4 “only proscribe machines 
where prizes can be won through a game of chance” rather than by winning a “game 
of skill,” the Court of Appeals distinguished these two types of games on the basis 
that: 
The phrase, “game of chance,” is not one long known in the 
law and having therein a settled signification, but was 
introduced into our statute book by the act of 1835. . . .  
[This term] must be understood [ ] as descriptive of a 
certain kind of games of chance in contra-distinction to a 
certain other kind, commonly known as games of skill.  [We 
hold that] “a game of chance” is such a game, as is 
determined entirely or in part by lot or mere luck, and in 
which judgment, practice, skill, or adroitness have 
honestly no office at all, or are thwarted by chance. 
 
Id. at 5–6 (alterations in original) (quoting State v. Gupton, 30 N.C. 271, 273–74 
(1848)).  In addition, the Court of Appeals noted that, more recently, this Court has 
adopted a dissenting opinion reasoning that “the essential difference between a game 
of skill and a game of chance for purposes of our gambling statutes . . . is whether 
skill or chance determines the final outcome and whether chance can override or 
thwart the exercise of skill.”  Id. at 6 (quoting Sandhill Amusements, 236 N.C. App. 
at 369).  As a result, the Court of Appeals determined that, even though “there are 
elements of ‘chance’ in many ‘games of skill’ ” and that “there are sometimes elements 
of skill present in games of chance,” id. (first citing Gupton, 30 N.C. at 274, then 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
Collins Coin Music Co. of N.C., Inc., v. N.C. Alcoholic Beverage Control Comm’n, 117 
N.C. App. 405, 409 (1994)), “[u]ltimately, whether a game is one of chance or one of 
skill is dependent on which element ‘is the dominating element that determines the 
result of the game,’ ” id. (quoting State v. Eisen, 16 N.C. App. 532, 535 (1972) 
(recognizing that blackjack contains elements of both skill and chance)). 
¶ 17 
 
Although the Court of Appeals determined that the Dexterity Test, considered 
in isolation, is a game of skill given that “the outcome of the game is dependent 
primarily on the patrons’ ability to react in a timely fashion,” it went on to conclude 
that the Reward Game “is a separate game in which patrons have the opportunity to 
win something of value,” consisting of “the opportunity to play an easy game of skill 
for money,” and that “this opportunity to win money, itself,” constitutes “a thing of 
value” and, therefore, a prize pursuant to the definition set forth in the statute.  Id. 
at 6–7.  As a result, the Court of Appeals held that, even though the Dexterity Test 
did not, standing alone, violate either N.C.G.S. §§ 14-306.1A or 14-306.4, the Reward 
Game violated N.C.G.S. § 14-306.4 as a matter of law.  Id. at 8–9.  On the other hand, 
given that “there [was] at least an issue of fact as to whether the Reward Game 
violates [N.C.G.S. §] 14-306.1A” arising from the fact that “[o]ne does not violate this 
Section unless the game of chance requires the patron to wager something of value” 
and the Court of Appeals’ determination that it is “unclear whether, here, patrons 
are required to wager anything of value,” the Court of Appeals affirmed the trial 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
court’s decision to grant summary judgment in defendants’ favor with respect to the 
issue of whether the Rewards Program violated N.C.G.S. § 14-306.4 while reversing 
the trial court’s decision to grant summary judgment in defendants’ favor with 
respect to the issue of whether the Rewards Program violated N.C.G.S. § 14-306.1A 
and remanding this case to the Superior Court, Alamance County, for any necessary 
proceedings.  Id. at 9 
¶ 18 
 
In a separate concurring opinion, Judge Hampson stated that, “at least in [his] 
view, [the Court of Appeals’] reversal of summary judgment on the question of 
whether Crazie Overstock’s business model violates [N.C.G.S.] § 14-306.1A should 
not be construed as an indication that Crazie Overstock’s business model does not 
violate [N.C.G.S.] § 14-306.1A” and should, instead, be understood as a recognition 
that “Crazie Overstock has generated a triable issue of fact as to whether the sale of 
gift certificates, in fact, constitutes the sale of a legitimate product offered in the free 
marketplace by a business regularly engaged in the sale of such goods or services or 
whether the sales of these gift certificates constitutes a mere subterfuge for illegal 
gaming.”  Id (citing American Treasures, Inc. v. State, 173 N.C. App. 170, 177 (2005)).  
In light of the conflicting evidence concerning “the actual value received from [Crazie 
Overstock’s] gift [certificates],” Judge Hampson wrote that “the question sub judice 
is,” at least in part, “whether ‘the price paid for and the value received’ from the gift 
certificates ‘is sufficiently commensurate to support the determination that the sale 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
of [gift certificates] is not a mere subterfuge to engage in [illegal gaming], whereby 
consideration is paid merely to engage in a game of chance.’ ”  Id. at 10 (quoting 
American Treasures, 173 N.C. at 178–79).  This Court granted requests for further 
review of the Court of Appeals’ decision filed by both Crazie Overstock and 
defendants. 
¶ 19 
 
In seeking to persuade us to overturn the Court of Appeals’ decision with 
respect to the issue of whether the Rewards Program violates N.C.G.S. § 14-306.4, 
Crazie Overstock begins by arguing that the Court of Appeals “fail[ed] to apply the 
correct legal standard” in evaluating the lawfulness of the Rewards Program 
pursuant to N.C.G.S. § 14-306.4 and, instead, utilized a broader legal standard 
applicable under other gambling-related statutory provisions, thereby “ignor[ing]” 
the relevant statutory language, which provides that prohibited games are those 
which are “not dependent on skill or dexterity,” see N.C.G.S. § 14-306.4(a)(3), so as to 
“render [the relevant statutory] language meaningless.”  Secondly, Crazie Overstock 
argues that the Rewards Program does not violate N.C.G.S. § 14-306.4 given that 
“[w]hether a participant obtains a prize is determined solely by the participant’s 
performance on the Dexterity Test,” making the “final outcome [ ] dependent on skill 
and dexterity.”  According to Crazie Overstock, “the fact that chance determines the 
value of the potential prize that can be realized through the Dexterity Test (by 
determining the amount of Reward Points awarded in the Reward Game) is not 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
relevant to the analysis of the final outcome of the [ ] Rewards Program” given that 
“the test under [N.C.G.S. § 14-306.4] is limited to the analysis of the role of skill and 
chance in the final outcome only.”  Thirdly, Crazie Overstock asserts that, “even if 
the standard under the gambling statutes is applied, genuine issues of material fact 
preclude[ ] the entry of summary judgment for [defendants]” given the existence of 
“substantial evidence from which a reasonable trier of fact can conclude that skill and 
dexterity predominate over chance.”  Finally, Crazie Overstock argues that the Court 
of Appeals erred by holding that the Reward Game, “viewed in isolation,” violates 
N.C.G.S. § 14-306.4 on the theory that Reward Points constitute a “prize” for purposes 
of the relevant statutory provision.  In Crazie Overstock’s view, the Court of Appeals’ 
determination that Reward Points constitute a prize amounts to a “suggest[ion] that 
the unrealized opportunity to play the Dexterity Test has value independent of the 
value of playing the game” even though “[t]he two are inextricably linked” and the 
“Reward Points have no inherent value.” 
¶ 20 
 
In response, defendants argue, based upon this Court’s decision to adopt the 
dissenting opinion in Sandhill Amusements, that the reference to skill and dexterity 
contained in N.C.G.S. § 14-306.4 incorporates “the traditional distinction between a 
game of skill and a game of chance pursuant to state law” so as to “prohibit[ ] 
sweepstakes that are conducted through video games” in which “chance predominates 
over skill.”  In view of the fact that “luck controls the symbols that appear in the reel-
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
spinning Reward Games, which in turn control whether a customer can win anything 
more than $1 in cash by playing the Dexterity Test,” defendants argue that “pure 
chance is responsible for whether players ever receive anything more than $1 by 
playing its games,” causing considerations of “chance [to] predominate[ ] in Crazie 
Overstock’s games.”  In addition, defendants contend that the Court’s decision to 
adopt the dissenting opinion in Sandhill Amusements establishes that the Court of 
Appeals correctly applied the “traditional” predominant factor test rather than the 
“new test” suggested by Crazie Overstock.  In defendants’ view, Sandhill Amusements 
makes clear “that chance is the predominate factor when it controls the maximum 
prizes that players receive” and “can thwart skill by preventing players from winning 
the best prizes.”  Finally, defendants claim that predominance is “a mixed question 
of law and fact that may be resolved on summary judgment where, as here, there is 
no dispute about how a game is played,” citing Best v. Duke Univ., 337 N.C. 742, 750 
(1994), on the theory that “mixed questions like [the issues presented in this case] do 
not turn on assessments of credibility, but instead require ‘the application of legal 
principles’ to settled facts,” quoting State v. Sparks, 362 N.C. 181, 185 (2008), and 
citing Sandhill Amusements, 236 N.C. App. at 370. 
¶ 21 
 
According to well-established North Carolina law, summary judgment “shall 
be rendered forthwith if the pleadings, depositions, answers to interrogatories, and 
admissions on file, together with the affidavits, if any, show that there is no genuine 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
issue as to any material fact and that any party is entitled to judgment as a matter 
of law.”  N.C.G.S. § 1A-1, Rule 56(c).  An appellate court reviews a trial court’s 
decision to grant or deny a motion for summary judgment de novo.  See Meinck v. City 
of Gastonia, 371 N.C. 497, 502 (2018). 
¶ 22 
 
N.C.G.S. § 14-306.4 prohibits the operation of an electronic machine which 
allows a user, with or without the payment of consideration, an opportunity to win a 
prize in a game or promotion in the event that the patron’s ability to succeed “[i]s not 
dependent on the skill or dexterity [of the patron].  N.C.G.S. § 14-306.4(a)(3)(i).  In 
Sandhill Amusements, we adopted the dissenting opinion at the Court of Appeals, 
which evaluated, in pertinent part, whether an enterprise involved an illegal video 
sweepstakes machines in violation of N.C.G.S. § 14-306.4, Sandhill Amusements, 236 
N.C. App. at 343, before noting that the critical analytical issue revolves around 
whether the relevant game was “dependent on skill or dexterity.”  Id. at 365.  In spite 
of the fact that “the term ‘skill or dexterity’ as used in [N.C.G.S.] § 14-306.4 ha[d] not 
been statutorily defined,” the dissent in Sandhill Amusements opined that a 
reviewing court should look for guidance from the Court of Appeals’ prior decision in 
Collins Coin, in which the Court of Appeals held that “[a] game of chance is such a 
game as is determined entirely or in part by lot or mere luck, and in which judgment, 
practice, skill or adroitness have honestly no office at all, or are thwarted by chance”; 
that “[a] game of skill, on the other hand, is one in which nothing is left to chance, 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
but superior knowledge and attention, or superior strength, agility and practice gain 
the victory”; and that “[i]t would seem that the test of the character of any kind of a 
game . . . as to whether it is a game of chance or a game of skill is not whether it 
contains an element of chance or an element of skill, but which of these is the 
dominating element that determines the result of the game, to be found from the facts 
of each particular kind of game” or, “to speak alternatively, whether or not the 
element of chance is present in such a manner as to thwart the exercise of skill or 
judgment.”  Sandhill Amusements, 236 N.C. App. at 368 (quoting Collins Coin, 117 
N.C. App. at 408) (citations and quotations omitted)).  In light of the numerous 
“inherent limitations on a player’s ability to win [the game at issue in that case] based 
upon a display of skill and dexterity,” including the fact that the machines and 
equipment at issue “only permitted a predetermined number of winners,” would 
necessarily “result in the playing of certain games in which the player [would] be 
unable to win anything of value regardless of the skill or dexterity that he or she 
displays” and the fact that the opportunity to employ skill or dexterity was “purely 
chance-based,” the dissent in Sandhill Amusements noted that it was “unable to see 
how [an] isolated opportunity [to employ skill or dexterity] to affect the outcome 
overrides the impact of the other features which, according to the undisputed 
evidence, affect and significantly limit the impact of the player’s skill and dexterity 
on the outcome.”  Id. at 369.  As a result, given these “inherent limitations on a 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
player’s ability to win based upon a display of skill and dexterity,” the dissent in 
Sandhill Amusements stated that “an individual playing the machines and utilizing 
the equipment at issue simply does not appear to be able to ‘determine or influence 
the result over the long haul’ ” and concluded that “ ‘the element of chance 
dominate[d] the element of skill in the operation’ ” of the machines at issue in that 
case.  Id. at 369–70 (quoting Collins Coin, 117 N.C. at 409). 
¶ 23 
 
The dissenting opinion in Sandhill Amusements that we later adopted suggests 
that N.C.G.S. § 14-306.4 should be interpreted to prohibit the operation of electronic 
gaming equipment in which skill or chance “dominat[e]” over a player’s exercise of 
skill and dexterity or “thwart the exercise of skill or judgment,” id. at 368 (quoting 
Collins Coin, 117 N.C. at 408).  This construction of the relevant statutory language 
does not, contrary to Crazie Overstock’s contentions, render the words “dependent on 
skill or dexterity” as found in N.C.G.S. § 14-306.4(a)(3) superfluous.  Instead, the 
approach that we believe to be appropriate simply focuses upon whether skill or 
dexterity actually give the player the ability to control the extent to which he or she 
receives a prize and the value of the prize that he or she wins rather than merely 
reflecting whether the player bests the odds of winning in a game of chance.4  Thus, 
                                            
4 Assuming that all of the other requirements set forth in the statute are met, nothing 
in this opinion or the dissenting opinion which we adopted in Sandhill Amusements should 
be interpreted as an indication that a gaming enterprise in which skill or dexterity actually 
predominate in resolving the issue of whether the player receives a prize and the value of 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
the relevant test for use in determining whether the operation of an electronic gaming 
device does or does not violate N.C.G.S. § 14-306.4(a) is whether, viewed in its 
entirety, the results produced by that equipment in terms of whether the player wins 
or loses and the relative amount of the player’s winnings or losses varies primarily 
with the vagaries of chance or the extent of the player’s skill and dexterity. 
¶ 24 
 
After applying the appropriate legal standard to the facts presented to us in 
this case, we are satisfied that the Court of Appeals correctly concluded that the 
Crazie Overstock’s gaming enterprise violated N.C.G.S. § 14-306.4.  As an initial 
matter, given that the number of Reward Points increases the dollar value of the 
prizes that a player is entitled to win in the course of the Dexterity Test, the increased 
potential return available to such players during the Dexterity Test compels the 
conclusion that Reward Points constitute a “[ ]thing . . . of value” pursuant to N.C.G.S. 
§ 14-306.4(a)(4).  For that reason, the Reward Game, even when considered in 
isolation, violates N.C.G.S. § 14-306.4. 
¶ 25 
 
Any decision to consider the Reward Game and the Dexterity Test in 
conjunction with each other produces the same result, Crazie Overstock’s argument 
to the contrary notwithstanding.  In spite of the fact that the Dexterity Test, viewed 
in isolation, involves skill or dexterity, the extent to which a customer is able to win 
                                            
that prize would violate N.C.G.S. § 14-306.4, ensuring that the relevant language does not 
constitute mere surplusage. 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
more than a minimal amount of money is controlled by the outcome of the Reward 
Game regardless of the level of skill and dexterity that the player displays while 
participating in the Dexterity Test.  For instance, a person who is wholly unsuccessful 
in playing the Reward Game cannot win more than $1.00 in the event of success in 
the Dexterity Test regardless of how well he or she performs while playing that game, 
a fact that establishes that the amount of a player’s winnings is primarily dependent 
upon chance rather than skill or dexterity as required by N.C.G.S. § 14-306.4.  Cf. 
Joker Club, LLC v. Hardin, 183 N.C. App. 92, 98 (2007) (stating that “the only factor 
separating the players” in a game of poker is the “relative skill levels” of the players).  
In other words, a customer cannot win more cash playing the Dexterity Test than the 
amount established by the chance-driven Reward Game, although a customer may be 
able to reduce the amount of cash that he or she eventually obtains by poor 
performance during that phase of the process, a fact that compels the conclusion that 
“the instrumentality for victory [is not] entirely in the player’s hand.”  Joker Club, 
183 N.C. App. at 99.  As a result, we hold that luck is so “inherent in the nature of 
[Crazie Overstock’s] games” that chance necessarily predominates over the exercise 
of skill or dexterity, Gupton, 30 N.C. at 274, so that Crazie Overstock’s Rewards 
Program should be classified as a game of chance rather than a game of dexterity or 
skill.  See Sandhill Amusements, 236 N.C. App. at 368. 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
¶ 26 
 
The result that we reach in this case is completely consistent with the General 
Assembly’s intent in enacting N.C.G.S. § 14-306.4.  As we recognized in Hest Techs., 
Inc. v. State ex rel. Perdue, 366 N.C. 289 (2012), the General Assembly “noted that 
‘companies have developed electronic machines and devices to gamble through 
pretextual sweepstakes relationships with Internet service, telephone cards, and 
office supplies, among other products,’ and that ‘such electronic sweepstakes systems 
utilizing video poker machines and other similar simulated game play create the 
same encouragement of vice and dissipation as other forms of gambling . . . by 
encouraging repeated play, even when allegedly used as a marketing technique.”  Id. 
at 294 (quoting An Act to Ban the Use of Electronic Machines and Devices for 
Sweepstakes Purposes, S.L. 2010-103, 2010 NC. Sess. Laws 408, 408).  As we 
understand the record, this statement of intent clearly describes the manner in which 
Crazie Overstock’s Rewards Program operates.  Thus, we have no hesitation in 
holding that Crazie Overstock’s Rewards Program represents the type of gaming 
enterprise that the General Assembly intended to prohibit by enacting N.C.G.S. § 14-
306.4.5  In light of our determination that Crazie Overstock’s Rewards Program 
                                            
5 In addition to responding to Crazie Overstock’s challenge to the Court of Appeals’ 
decision, the State argued that Crazie Overstock’s enterprise (1) violated the State’s ban on 
video gaming machines as set forth in N.C.G.S. § 14-306.1A, which defines a prohibited “video 
gaming machine” to include any “video game not dependent on skill or dexterity that is played 
while revealing a prize as the result of an entry into a sweepstakes,” see N.C.G.S. § 14-
306.1A(b)(9); and (2) constituted an illegal gambling enterprise pursuant to N.C.G.S. §§ 14-
292 and 14-301 on the grounds that “participants [in the Rewards Program] are not really 
CRAZIE OVERSTOCK V. STATE OF NORTH CAROLINA 
2021-NCSC-57 
Opinion of the Court 
 
 
 
constitutes an unlawful sweepstakes in violation of N.C.G.S. § 14-306.4 and the fact 
that this determination appears to us to preclude the award of any relief in Crazie 
Overstock’s favor, we conclude that there is no need for the Court to decide either of 
the other issues addressed in the parties’ briefs and modify the Court of Appeals’ 
decision by obviating any necessity for a remand to the Superior Court, Alamance 
County, for further proceedings in this case.  As a result, since the Court of Appeals 
correctly determined that the trial court did not err by determining that Crazie 
Overstock’s gaming enterprise constitutes an unlawful sweepstakes in violation of 
N.C.G.S. § 14-306.4, we modify and affirm the Court of Appeals’ decision. 
MODIFIED AND AFFIRMED. 
 
 
Justice BERGER did not participate in the consideration of or decision in this 
case. 
                                            
buying the promoted products,” with “the purchase of the products” being, instead, nothing 
more than “a pretext to place bets,” citing Hest, 366 N.C. at 294.