Editorial

Editorial | Second Curse, Same as the First; Legislature needs to stamp out video gambling once more

Video gambling's back, and legislature needs to stamp it out once more

November 17, 2012 

  • What are these sweepstakes machines? The devices can vary, from machines that look very much like the old video poker machines to ones that more closely resemble desktop computers. Standalone machines can be found in convenience stores, often just one or two per location. In these, players put in money and receive a product in return, such as a coupon or phone minutes. Then they can play poker, slots or other games for the chance to win prizes. In Internet cafes that are popping up, dozens of computers are networked. Players often buy Internet time that allows them to surf the Web, but also gives them access to poker, keno, blackjack or other games. If they win, they might be paid in phone cards or more Internet time, which they can then trade in for cash.
  • How have local municipalities responded? Horry County “Since they’re not legal in the state of South Carolina, they’re not legal in Horry County.” – Horry County spokeswoman Lisa Bourcier Georgetown County Spokeswoman Jackie Broach said County Council members have decided not to take a position on the businesses and are waiting for the state legislature to act. In the meantime, if you want to open a sweepstakes business in Georgetown County, “we don’t have any laws saying you can’t.” Myrtle Beach “While the State Law Enforcement Division and the solicitor’s office are saying they are illegal, the courts have not weighed in with a final determination. The courts are the ultimate authority. For the moment, rather than have our zoning enforcement and business license personnel say this is an illegal device, we are issuing business licenses, and that money is unrefundable.” – Myrtle Beach spokesman Mark Kruea Conway Administrator Bill Graham said they’ve had one application so far and advised the applicant that they thought the business was illegal under state law and wouldn’t approve a business license in Conway. North Myrtle Beach “The city of North Myrtle Beach will not issue a business license for this type of business until a decision as to their legality or illegality is made by the state attorney general or the General Assembly.” – North Myrtle Beach spokesman Pat Dowling Surfside Beach Did not return phone calls or emails about policy. Atlantic Beach Official policy unclear, but at least one business is already in operation.

State lawmakers need to decide, and decide soon: Is video gambling something we want to allow or not? We’d prefer not, but any clarity one way or the other would be preferable to the gray area we’re stumbling through right now.

Didn’t the state already decide this issue back in 2000? We thought so, too. But having ferreted out a possible weakness in the 12-year-old ban on video gambling, gaming interests are barreling through the supposed loophole at high speed.

Gone are the thousands of video poker machines that had filled convenience stores, gas stations, restaurants and bars, generating up to $3 billion a year. Instead, the state now has “sweepstakes” machines, which are quickly taking their place. These machines have all the hallmarks of the old machines, but come cloaked in a flimsy facade of entering sweepstakes for prizes, rather than bald-faced gambling.

It’s always a bit risky to start talking about the intent of a law rather than the actual law, but it’s clear that the intent of the state’s video gambling law was to outlaw video gambling. And it’s clear that these sweepstakes machines, however they’re costumed, are made for gambling. Players hand over money, play a game on a machine for the chance to win prizes, and can walk out with more money than they came in with – or, more often, walk out with much less money. It walks like a wolf, looks like a wolf, howls like a wolf. And yet its supporters say it’s a sheep.

Years in court

The question here is not whether to legalize video gambling. The state decided that 12 years ago – correctly, we believe. The only question is whether these new machines are actually new or just old machines in new clothes. If they’re really new, the state will need new laws to ban them as well. If, however, they’re still covered by the current law, they’re contraband that should be seized and stamped out now. That question will likely ultimately be decided by the S.C. Supreme Court, though it could be a while. Gambling interests have become proficient in delaying tactics and appeals, dragging out the process as long as possible.

“It could take another four or five years for the courts to rule,” pointed out Horry County Councilman Marion Foxworth, “and in the meantime local government, local sheriffs, local police departments and local prosecutors are kind of on their own.”

Horry County and many of the municipalities in the area have sided with the state’s law enforcement agencies, taking the position that such businesses and machines are illegal and shouldn’t be condoned. Myrtle Beach stands out as a glaring exception, taking the position that until there is a clear ruling from the courts that the machines are illegal, they will tolerate them in the city.

“While opinions may be that the devices are illegal,” explained city spokesman Mark Kruea, “the courts have yet to make a determination on that, so rather than have our zoning and business license personnel be in the position of saying, ‘Gee that’s an illegal device,’ we are provisionally issuing business licenses until a higher authority makes a decision.”

The city’s position is perhaps understandable. It’s difficult to put city staff in the position of determining the legality of something that state courts haven’t even made up their mind on yet. But that doesn’t mean the position is correct. Perhaps some guidance from City Council could help settle the city’s stance and make it clear that these almost certainly illegal businesses are not welcome in town. Georgetown County, which has also avoided any decision, would do well to do the same.

Meanwhile, in the absence of an absolutely clear interdict from above, those who profit handsomely from such machines are making hay while the sun yet shines.

Outgoing 15th Circuit Solicitor Greg Hembree put it this way: “They’re still out there kicking it around until somebody shuts them down.”

‘They’re illegal’

Hembree, who just won a seat in the state Senate, has no doubt about where he stands: “They’re illegal.” In that position he’s aligned with the state attorney general and the head of the State Law Enforcement Division. So why are the machines and parlors still popping up? Because court cases move slowly, especially when you have a mountain of ill-gotten gambling profits to pay for your defense.

“They’ll spend all the money in the world to defend these things,” Hembree said.

Deputy solicitor Jimmy Richardson, who is likely to replace Hembree, said that trying to prosecute the machines is like trying to pin down a moving target. As soon as you get rid of one type of poker machine, he said, they just change the machines a bit and bring them back out to test the legal waters again.

Some progress is being made. More than 800 have already been seized by SLED statewide, spokesman Thom Berry said this week, including 54 in Horry and Georgetown counties. But it’s a long battle. After 24 machines were seized in Little River in June 2011, for instance, it took until August of this year for a judge to decide they should be destroyed.

The legislature needs to step in and cut short that process, and soon, before another election offers the opportunity for more legislators bought with gambling money to join the body. Make it crystal clear that these machines are not wanted and not legal.

Significantly, the bills proposed last year (which floundered in the state Senate) would only have outlawed the standalone sweepstakes machines and done nothing to address the casino-style Internet “cafes” where residents can spend hours gambling on computers for the chance to win prizes. Both need to be banned, and we’re looking for our legislators to act quickly this year to do so.

‘Born of corruption’

Why is this such an important fight? Why should state law enforcement agencies devote public funds to a long, drawn out fight against the industry? Not only because of the social problems that gambling brings with it, the lost paychecks, the debts, the crime. That’s just one part. The bigger issue is the creeping, corrupting influence that the unregulated, cash-based business extends over our entire political system.

Cindi Ross Scoppe, who has been writing about the state’s politics for decades at The (Columbia) State, explained it well earlier this year:

“Video gambling was born of corruption. A powerful state senator, who would escape federal extortion charges only by dying before the indictments could be issued, slipped what he called a ‘technical’ change into state law that legalized one of the most addictive forms of gambling on earth. Over the next decade, the rogue industry grew into one of the most potent political forces in our state by ignoring what meager laws we had and pumping hundreds of millions of dollars of its ill-gotten gains into political campaigns. At its heyday, it was admitting to revenue equal to half the state budget. It managed to take out a governor and nearly take over the legislature.”

That’s not a situation we should be pining to return to.

The longer the legislature waits to act, the more brazen the industry becomes and the fatter its wallets grow. What’s at stake is no less than the political future of our state. And yet action has been absent.

“The General Assembly now has ducked the issue,” Foxworth said this week, leaving us with “a no man’s land of what the law is.”

It’s past time for legislators to stop gambling with our state’s future, screw their courage to the sticking place, and do their job. Stamp out the weed before it takes any greater hold of our state than it already has.

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