North Carolina asked to re-visit Sweepstakes Video Poker issue

Here is an article that appeared today July 8, 2009 in the Fayetteville Observer:
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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 woolvertonp@fayobserver.com, (919) 828-7641 or 486-3512

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Proposed Bill to Make Cherry Masters legal in Pennsylvania

Rendell mulls video poker revenue

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BY ROBERT SWIFT
STAFF WRITER
rswift@timesshamrock.com

Published: Wednesday, February 4, 2009 4:11 AM EST

HARRISBURG — Video poker machines would see the legal light of day under a new Rendell administration plan to help families pay college costs.

The proposal would legalize video poker machines in bars, taverns, restaurants and private clubs with liquor licenses. The move would end decades of a shadowy, illegal existence for that form of gambling. If enacted, this law would mark the second major expansion of legalized gambling in Pennsylvania in five years, following the 2004 vote to legalize slots casinos.

The administration wants to use millions of dollars of anticipated video poker revenue to help students attending the 14 state-owned universities, including Bloomsburg and East Stroudsburg in Northeast Pennsylvania, and community colleges, starting this fall if state lawmakers approve.

Officials say an expansion of tuition aid is needed to help students and families cope with job layoffs and stock market losses in recent months.

The plan, outlined prior to Gov. Ed Rendell’s annual budget address today, would target students whose family income is less than $100,000. They would be eligible for up to $7,600 annually for tuition, books, fees and room and board.

“Legalizing this form of entertainment will generate more than half a billion dollars annually to support the tuition relief plan,” said acting state Revenue Secretary Stephen Stetler.

Each licensed establishment would be able to install up to five machines. There are some 11,000 bars and restaurants and 3,000 private social clubs with liquor licenses in Pennsylvania.

Under the proposal, the Revenue Department would issue licenses to establishments as well as machine manufacturing and distribution licenses to companies. The state would tax 50 percent of net profits from the video poker machines.

State Police Commissioner Frank Pawlowski took a practical view of the proposal, saying it would enable the state to obtain revenue from an estimated 17,000 video poker machines being operated illegally.

The proposal is offered against a backdrop where bars and taverns want help to offset the loss of customers from the state indoor smoking ban, tough drunk driving laws and competition from the slots casinos.

“With the economy, the smoking ban and the .08 percent blood alcohol limit, we need this to exist,” said Amy Christie, director of the Pennsylvania Tavern Association.

While Republican senators favor expanding tuition aid, they are leery of underwriting it with video-poker revenue.

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