Capital - May 2005

Speaker refuses to fold on video poker
By Jack Betts

Where are rites of spring in Raleigh. Every other year when the General Assembly convenes for its long session, the Senate passes a bill outlawing video poker and sends it to the House. And waits. And waits.

This year appears to be no different. Sen. Charlie Albertson filed his bill early in the session, and the Senate began its customary work of trying to get rid of the 10,000 or so video-poker machines that legal authorities say constitute a thorny problem for local law enforcement.

And, as usual, House Speaker Jim Black, whose allies control what comes to the floor, has no interest in outlawing video poker. When Rep. Ronnie Sutton filed a bill Feb. 2 to outlaw the machines, it was referred to the House Rules Committee, a graveyard for measures the speaker has no intention of giving a hearing. “I’m convinced that’s the last we’ll ever hear of it,” says Sutton, a Robeson County Democrat. “The speaker has this thing about video poker.”

Law-enforcement officials say video poker — played in arcades, mom-and-pop shops and convenience stores — is addictive: One electronic-gaming expert calls it “the crack cocaine of gambling.” Thousands of machines wound up in North Carolina after South Carolina banned them five years ago. State law limits winnings to merchandise worth $10 or less. But authorities say machines often are programmed to pay cash — which keeps players coming back and unscrupulous operators flush with their money.

A federal investigation snared Garland Garrett, a secretary of transportation during the Jim Hunt administration whose family owned video-poker machines. He pleaded guilty to violating federal gaming laws and was sentenced last year to five months in federal prison.

Federal officials say Operation Double Black Diamond continues to investigate illegal video-poker activities. Last fall, state and federal authorities found that hundreds of machines were paying cash — confirmation, they say, that video-poker operations often break the law in North Carolina.

So you would think it would be a simple matter for the legislature, a conservative institution that usually pays attention to crime fighters, to act. But you’d be wrong. Sutton’s bill appears to be radioactive, judging by the number of legislators keeping their distance from it. Unlike Albertson’s, which enjoys considerable bipartisan support from 23 co-sponsors — including some of the Senate’s leading lights — the House bill has just three co-sponsors. And no future.

What accounts for such a dramatic difference in the fate of these identical bills? Some believe it’s the hefty political donations the speaker and his political committee have received from video-poker operators. Democracy North Carolina, a campaign watchdog, filed a complaint with the state Board of Elections last year asking for an investigation of the more than $100,000 Black’s committee received from video-machine distributors, truck stops, pool halls, bars and convenience stores.

Black, a Democrat, bristles at the suggestion that most of those donations came from video-poker interests: The donors are involved in many kinds of businesses. And in any case, he says, he would not have known exactly where the money came from — a point that Democracy North Carolina conceded in its complaint: “We must emphasize that we have NO evidence or indication that Speaker Black has any involvement or knowledge of the apparent illegal campaign contributions.” Donor descriptions on his campaign reports “suggest he did not realize they were connected to the video poker industry.”

Several years ago, every member of the North Carolina Sheriffs’ Association signed a petition asking the legislature to ban video poker. One of its most outspoken members is Jim Pendergraph, sheriff of Mecklenburg, Black’s home county. Republican Rep. Joe Kiser, a former Lincoln County sheriff, is a co-sponsor of Sutton’s bill. But Black says, “There frankly is not a lot of excitement about [video poker].” Only about a half-dozen sheriffs, he contends, were concerned about the issue. The rest, he adds, were “really more interested in their retirement pay.”

Nobody has budged Black from his position that banning video poker could cost North Carolina thousands of jobs. Take it away, he says, and a lot of small businesses will go down the tubes. A contingent of convenience-store operators recently told him that video poker was vital to their businesses. “They said that for about half their people it’s a profit center that helps them keep the lights on.”

After the Senate passed a bill in 2003 to ban video poker, Black promised to give the subject a hearing. But instead of outlawing the machines, the House passed a bill last year that changed the way they are regulated. The measure beefed up restrictions on their use, including a $300 fee on every licensed machine and a $5,000 fine on every illegal machine, and tightened penalties for cash payouts. N.C. Alcohol Law Enforcement would have policed it. “We passed a bill to restructure regulation,” Black says, “but the Senate was not interested in it.”

Why not? “It put the fox guarding the henhouse, as we say in the country,” Albertson, a Duplin County Democrat, says. “It’s best to just stop it.”

Odds are gambling’s foothold in North Carolina is going to be bigger than video poker. Black gave them a boost in early April by shepherding a lottery bill through the House, where previous attempts had foundered, on a 61-59 vote.

And gambling proponents aren’t likely to stop with a lottery. Since the Cherokee Indians signed an agreement with the state in 1994 that allowed certain kinds of gaming on federal reservations, pressure has built in Raleigh. The tribe now wants live dealers at its casino. Lumbee Indians in Robeson County want federal recognition, which some say could lead to a casino in Eastern North Carolina. A state senator has pressed for racetrack betting one day a year at the Stoneybrook Steeplechase in Hoke County.

Black predicts a lottery will deal a big blow to the video-poker market. “Video poker will sort of phase out — except for people who play video poker for fun and not just to win.”