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Bill would require phaseout of video poker over next year
RALEIGH
The N.C. House voted yesterday to ban the video-poker machines that dot the state's pool halls, convenience stores and other establishments, bowing to concerns about illegal payouts and campaign-finance violations.
Machines would have to be phased out over the next year and eliminated by July 1, 2007.
The Senate has voted five times in six years to ban the machines, but the House had previously voted to change only how the current law is enforced. House Speaker Jim Black, D-Mecklenburg, had defended the industry because he said he was concerned about jobs.
But Black has reversed his position, and he voted yesterday in favor of the ban. He said that the bill deals with his concerns by giving machine owners and operators a year to respond.
"The thing that is different for me is that we finally reached an agreement to allow operators a year to find new jobs," Black said.
"I never liked the idea of, with the stroke of a pen, eliminating thousands of jobs," he said.
North Carolina has about 10,000 registered video-poker machines. They are supposed to pay only coupons for store merchandise of up to $10 - not cash.
The General Assembly has wrangled over what to do with video-poker machines since 1999, when the S.C. Supreme Court banned the machines in South Carolina. Observers in North Carolina expected as many as 36,000 machines to come across the border.
Legislators voted in 2000 to allow owners to keep their machines, as long as they had listed their machines for tax purposes in North Carolina in January of that year, before the South Carolina ban took effect.
Still, industry officials said that there are about 20,000 unregistered, illegal machines in North Carolina.
The bill endorsed by the House yesterday would do nothing to eliminate those, said Richard Frye, an owner of 33 registered video-poker machines and a spokesman for the N.C. Amusement Machine Association.
"Do you think they're at all worried about a ban?" Frye asked, referring to illegal operators. "All this is going to do is get rid of the 10,000 legal machines and leave the rest of them to be fined one at a time."
The state's sheriffs have said that a ban would make it easier for them to eliminate illegal machines because, they said, it can sometimes be difficult to tell the legal ones from the illegal ones.
Members of the N.C. Sheriffs' Association voted unanimously Tuesday to support the House phaseout.
"The proposal to begin eliminating them this fall and to completely outlaw them by July 1, 2007, will accomplish the longstanding goal of the Association to ban video poker machines in our state," the sheriffs said in a news release.
Although Black and others called the bill a compromise, Frye said that neither he nor anyone with his trade group had been contacted about it.
He added that he expects a lawsuit to be filed because the bill would still allow video poker at Indian casinos.
"It's discriminatory," Frye said. "I think it's a dirty deal, a really dirty deal."
The House vote was 114-1, with the lone dissent coming from Rep. John Blust, R-Guilford.
A vocal critic of Black and the legislative process, Blust said that he does not actually oppose a ban on video poker.
"It felt like something that was concocted to let us out of the controversy," he said afterward.
The video-poker industry has been the subject of controversy on several fronts. Federal and state investigators have been looking into illegal machines, including some that pay cash, and their inquiries have resulted in several indictments.
Garland Garrett Jr., a former N.C. transportation secretary, went to prison in 2003 after admitting that his family's video-poker business broke federal gaming laws and took in almost $2 million in illegal profits.
In March, the State Board of Elections sent the names of at least 18 people connected to the video-poker industry to Colon Willoughby, the district attorney for Wake County, for possible criminal prosecution.
Elections officials were looking into campaign donations from the industry to Black, whom they also referred for possible prosecution.
Black received $165,000 from people connected to video poker leading up to the 2002 and 2004 elections, according to Democracy North Carolina, a group in Carrboro that monitors money in politics. But the amount is small compared to Black's total fundraising.
Senators could vote as early as this morning on whether to agree to the House's proposed phaseout.
They could either support it - sending it to Gov. Mike Easley for his signature - or send it to a House-Senate committee for further negotiations.
"I think the political process took a step forward today," said Sen. Charlie Albertson, D-Duplin, who has sponsored video-poker bans. "The Good Book says there's a time for everything, and I think now might be the time for this."
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