Faced with large new fees by the city of Mount Airy and the threat of a statewide ban, some Internet sweepstakes businesses have pulled the plug on their operations.

Some, but not all.

While at least two of the handful of online gaming cafes that were operating here have shut their doors, that’s not the case for the Internet Hut — housed in the former Pizza Hut location on U.S. 52 across from Mayberry Mall.

“We’re going to fight it to the end,” said Diane Ward of Tobaccoville, who has been working at the Internet Hut since it opened last November and previously was employed at a similar business in King operated by her brother.

While critics in the state Legislature and elsewhere have attacked them as a form of illegal video poker operating under a loophole, Ward says Internet sweepstakes businesses are no worse than the state-run lottery.

“There’s nothing bad going on here,” Ward said, arguing that the industry she’s a part of is harmless compared to others. “I’ve never had anyone run out of here and kill people because they were drunk.”

On July 1, Internet sweepstakes cafes operating in the city limits will be subjected to a stiff fee recently imposed by the Mount Airy Board of Commissioners.

Under a new category added to the municipal fee schedule for businesses, a $2,500 annual charge will be required for them to operate. Also, every parlor will be assessed an annual privilege-license tax of $500 for each electronic gaming machine used or stored as part of their operations.

Ward said the Internet Hut plans to pay the new charges, although it will be a burden. “It’s going to hurt, because business is off right now,” she said of the economy’s effect on sweepstakes operations. “There’s going to be a lot of them that can’t pay it.”

Meanwhile, Interstate sweepstakes cafes are facing opposition on another front: a possible outright ban on them by the N.C. General Assembly.

The state Senate voted 47-1 earlier this week to shut the doors at the hundreds of online gaming establishments now thriving in North Carolina. They have been operating under a loophole in state law that outlaws mechanical gambling devices such as video poker machines, but not contests which are Internet server-based.

Sen. Don East, who earlier had questioned whether a state with a lottery should prohibit private businesses involved in gambling, was among the supporters of the bill calling for the ban. “I had mixed emotions about it, because like I (said) before, the state is the primary gambling advocate,” the Surry County Republican said Wednesday.

But East says he has problems with how the sweepstakes parlors seem to be taking advantage of a law that was aimed at making their kind of operations illegal, and established a policy of limiting gambling to the lottery.

“It’s an end run around the video poker ban,” East said of their actions. “And I just voted to reiterate that fact.”

The only lawmaker who dissented was a senator from New Hanover County who backs a separate measure that would put video poker under the lottery’s supervision. That legislator doesn’t support “stand-alone sweepstakes parlors,” but wants to regulate them to generate more revenue for public schools.

North Carolina’s House of Representatives now will consider the bill passed by the Senate. Support in the House is said to be mixed because the Democratic majority in that body is divided on the issue. Some representatives seek to tax parlors while others want to wait until the courts resolve legal questions involved.

In the meantime, Ward — of the Internet Hut in Mount Airy — takes issue with complaints by local police and some lawmakers that the various games offered prey on people’s weaknesses and rob them of their paychecks.

“I’ve never been in here and heard them crying and carrying on,” Ward said of customers as she surveyed the rows of computers inside the business. “I’ve not ever seen anybody get mad.”

Typically, patrons buy telephone or Internet time, then play a wide selection of games on computer screens for the chance to win cash and prizes.

“The Internet sweepstakes has given me jobs and other people (jobs) who were out of work,” said Ward. Reportedly, her brother planned to lobby in Raleigh Wednesday on behalf of the industry.

“To me, it’s a family oriented type of business,” the Internet Hut employee added of the parlors and the clientele they attract. “The people are so nice.”

In another part of the room, Amy Daley sat at a computer screen where she was playing the online game “Blackbeard’s Treasure.”

Daley described herself as a regular customer of the Internet Hut, but says she doesn’t “blow my whole paycheck” there and hasn’t seen anyone hurt as a result of the businesses so many are trying to outlaw.

“I think it’s absolutely ridiculous what they’re trying to do,” Daley said.

Contact Tom Joyce at tjoyce@mtairynews.com or at 719-1924.