Wednesday, July 29, 2009

Video poker might be returning to North Carolina

Rep. Earl Jones doesn’t say he’s arguing for the return of video poker to North Carolina. After all, the Greensboro Democrat points out, a form of the game is spreading even after the state voted twice in five years to outlaw that type of gambling.
“As we speak, throughout this state, there is a proliferation of video (sweepstakes) machines that’s coming into North Carolina from various companies and manufacturers,” Jones said.
Jones argues that legislation he has sponsored could bring $500 million into state coffers while regulating and reining in an industry that is virtually uncontrolled.
That money is tempting for lawmakers, who are struggling to bridge what Democratic leaders describe as a $4 billion gap in the overdue budget. Lawmakers are stuck on how to raise an additional $1 billion in new taxes they say is needed.
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As reported Monday, both the State Employees Association of North Carolina and the N.C. Legislative Black Caucus back the effort to bring video poker back to the state.
Video Poker has a particular history here in North Carolina. Investigations into video poker helped bring down former House Speaker Jim Black. Although he was charged in connection with bribes from chiropractors, it was activity surrounding video poker interests that got federal authorities interested in his activities. Black is now service federal and state prison sentences

NC budget impasse builds hope for tax alternatives

The Associated Press Tuesday, July 28, 2009
RALEIGH, N.C. — Lawmakers and interest groups who sense an opening in North Carolina's budget talks over taxes tried Tuesday to build support for alternative methods to generate more revenue or cut costs beyond what Democratic leaders are seeking.
House and Senate Democrats remain at odds again over how to generate nearly $1 billion in new taxes because Gov. Beverly Perdue nixed a proposal that would have raised income taxes on all individuals and corporations with tax bills.
So groups are working to fill the vacuum caused by a broken deal.
Amusement machine owners and lawmakers held a news conference to unveil endorsements for legislation they argue could raise nearly half that amount by repealing the 2006 ban on video poker machines and regulating them instead while the state takes a 20 percent cut from the games.
"It's time for us to look under every rock that we can to find legal dollars to help alleviate this deficit this state is in the middle of right now," said Rep. Kelly Alexander, D-Mecklenburg. "This particular source of revenue is low-hanging fruit."
Separately, Republican leaders said they could locate $633 million in cost savings or more money by making about a dozen simple changes to state law. And Senate Democrats held a finance committee meeting to build bipartisan support for a tax overhaul they said has been needed for decades.
"I urge you to be statesmen and women on this issue," said former Charlotte Mayor Richard Vinroot, a Republican who co-chaired a blue-ribbon commission of business leaders urging tax reform, told lawmakers. "Don't let this opportunity go to waste."
At the video poker news conference, the State Employees Association of North Carolina and the N.C. Legislative Black Caucus said they support removing the ban.
Supporters of the state regulating and taxing the machines argue it would eliminate the industry's past sullied reputation and generate an estimated $498 million in revenues without having to raise taxes on all citizens as high as the previous revenue deal required.
"We believe that this is a viable option," said Rep. Alma Adams, D-Guilford, the Legislative Black Caucus chairman. "We have, I think, an option that we should not pass up."
The legislation, introduced by fellow Guilford Democratic Rep. Earl Jones, received a hearing in a House committee three weeks ago, but no vote was taken or scheduled. That's because legislative leaders say their members want video poker machines to remain illegal in North Carolina.
"We're not ready to go back to legalizing video poker," House Majority Leader Hugh Holliman, D-Davidson. "A lot of members remember having to get rid of video poker."
One of the industry's biggest supporters was then-House Speaker Jim Black, D-Mecklenburg. whose campaign donations from video poker distributors were investigated extensively by state election officials. He is currently serving a federal prison sentence for corruption unrelated to video poker.
The amusement machine industry wants to be taxed and regulated to show that they are reputable, Entertainment Group president William Thevaos said.
A Superior Court judge in February ruled North Carolina couldn't prohibit videopoker machines while allowing the Eastern Band of Cherokee Indians to operate the same games.
In recent weeks, other trial courts suggested that so-called "sweepstakes" machines, which provide cash prizes when people purchase Internet or phone card time, are exceptions to the ban.
"These gaming systems are alive and well in North Carolina," said Dana Cope, executive director of the State Employee Association, a 55,000-member union.
Republican lawmakers said earlier Tuesday the state could avoid having to raise additional taxes by diverting money North Carolina gets from the 1998 national tobacco settlement and by opposing the expansion of a tax credit for movie makers who film in the state.
The state also could save $50 million by expanding through the University of North Carolina system on a consultant's efficiency study that found UNC-Chapel Hill has too many administrators, GOP members said.
"We can save this kind of money and not harm the education of children," said Rep. Hugh Blackwell, R-Burke.

Wednesday, July 8, 2009

North Carolina asked to re-visit Sweepstakes Video Poker issue

Here is an article that appeared today July 8, 2009 in the Fayetteville Observer:
By Paul WoolvertonStaff writer
Video poker advocates appeal to lawmakers

RALEIGH - Video poker advocates told state legislators Tuesday why they thought their gaming machines should be legalized again in North Carolina.
Republican and Democratic leaders in the House and Senate have rejected the idea on principle, even though the industry promises it will bring strict controls and raise more than $480 million a year in taxes in the face of a $4 billion-plus budget shortfall.
Rep. Rick Glazier, a Fayetteville Democrat, whose committee heard the video poker bill, said it will make no further progress in the committee. This likely will kill it. Glazier opposes video poker and said it would be the wrong way to fund the state budget.
The gaming machines were common in bars and convenience stores until several years ago. Following numerous complaints of abuse and corruption, including illegal cash payouts, the machines were outlawed everywhere except at a casino run by the Cherokee Indians in the mountains, where they can legally award cash prizes.
The bill in the legislature would bring the machines back, under oversight of the N.C. Department of Revenue. Under the proposal, no place could have more than 10 machines, the maximum wager would be $5, and the industry would have to pay 20 percent of its income to the state.
The machines would be wired to a central office with the Department of Revenue to monitor their play, income and payouts.
Pending litigation may force legislators to do something, said Brad Crone, a political consultant and spokesman for the industry.
In a lawsuit which New VEMCO Music Co. of Fayetteville filed against the state, a Superior Court judge in February overturned North Carolina's existing ban. That decision has been stayed while the government tries to reverse the ruling on appeal.
State Rep. Earl Jones, a Greensboro Democrat who is pushing to legalize the machines, predicted the state will lose that lawsuit and the games will return.
In the meantime, some gaming companies have gotten around the ban by bringing in new sweepstakes machines. Customers use the machines to purchase a product - Internet access or telephone calling cards - and with their purchase they play the game.
Law enforcement has tried to stop these games, but in a lawsuit filed by Sandhill Amusements of Pinehurst, a Wake County Superior Court judge in June ordered police to leave them alone.
That order will encourage more companies to bring their machines to North Carolina, said Chase Brooks, a gaming operator from Alamance County and representative of the N.C. Entertainment Group.
"You're about to see an influx, a huge influx, of these machines from out of state," Brooks said. "They're coming in from everywhere. Tens of thousands of them. They're going to be here shortly."
Brooks said gaming operators such as himself would prefer to operate under oversight from the Department of Revenue.
"If you go back and you take a look at history, there's a black cloud over the poker industry," Brooks said. "There's a lot of us that want to remove that black cloud. . We want to remove all these issues."
The industry would employ 5,000 to 10,000 people, he said, and operate games at 25,000 to 50,000 stores. "Those store owners are more likely to retain another individual on payroll," he said.
Christian conservatives said the state should resist the money and jobs temptation.
"Video poker brought both heartache and shame to our great state," said the Rev. Mark Creech of the Christian Action League. "Many of our citizens became addicted to it, leading to both social and economic consequences for them, their families and their communities."
The state could "become so obsessed with the need for revenue that we make compromises that are entirely too costly," Creech said.
Bill Brooks, president of the socially conservative N.C. Family Policy Council, said the gaming industry is exaggerating its likely tax revenue. Bill Brooks is not related to Chase Brooks.
"They're claiming they're going to give the state 20 percent of their profits, and the state's going to get close to half a billion dollars?" Bill Brooks said. "That means that people are going to be putting in $21/2billion into video poker? Well, that number's just way too high."Staff writer Paul Woolverton can be reached at, (919) 828-7641 or 486-3512