Gambling's 'pernicious effect' on government

October 5, 2014

Gambling's 'pernicious effect' on government

By Rev. Mark H. Creech
It may come as a surprise for many, but just within the lifetime of most Americans, legal casino gambling existed in only two places in our nation: Nevada and Atlantic City, New Jersey. Starting in the 1990s, casinos began spreading across our country at break-neck speed. Today, at least 23 states have commercial casinos, a category that includes land-based, riverboat, dockside, and race track casinos. In the Mid-Atlantic and Northeast, nearly every adult lives within a relatively short distance to a casino. [1]

North Carolina is not exempt from the spread of this insidious industry. Harrah's has one casino on the Cherokee reservation in western North Carolina. A new gambling compact approved in 2012 by then Governor Bev. Perdue, guarantees they can build more. And now, the Catawba Indians have petitioned the federal government to place 16 acres off Dixon School Road in Kings Mountain into a trust for a $340 million complex to include a 220,000-square-foot casino in that location.

Taylor Branch, a Pulitzer Prize winning historian of the Civil Rights Movement and biographer of Martin Luther King, Jr, once described state-sponsored gambling as "a corruption of democracy." "It violates the most basic premises that make democracy unique: that you can be self-governing, you can be honest and open about your disagreements as well as your agreements, and that you trust other people – that you are in this together. That's what a compact of citizens is. And the first step away from it is to play each other for suckers. We're going to trick them into thinking they are going to get rich, but they are really going to be paying my taxes." [2]

Kings Mountain and Cleveland County residents are already witnessing the way gambling can corrupt, even if it hasn't arrived on the scene.

In April, the Christian Action League reported that both the City Council and County Commissioners had admitted they signed letters of support for the casino without ever investigating its potential impact beyond the sales pitch of casino promoters. [3]

During the last city council meeting, Tuesday, September 30th, Naomi Torberson, eloquently expressed to Kings Mountain council members the way the current political process was continuing to infringe upon citizens' freedoms. She wrote:

Mr. Mayor, City Council -

I have been privileged to live in Kings Mountain since 2005 and in the greater Cleveland county area for an additional five years. Since moving here, I have enjoyed learning of the historical significance this area played during America's war for independence.

Kings Mountain is a proud city. We are proud of our heritage of standing up for what we believe. We are proud of the victory gained over a form of government that repressed the people, and failed to represent the interests and safety of the local community.

Yet, in recent history, this council has chosen to go against this proud heritage, and has chosen to act in a way that does not represent the citizens of this community. Consider these numbers:

There have been 74 Regular City Council Meetings from July 2008 to August 2014. In those meetings, over the course of six years, the council has been addressed 112 times by citizens, in the citizen recognition portion of the meetings.

Thirty-six of those instances were citizens who were concerned about the liquor license issue, and its effect upon our community. Another 4 were citizens who were concerned about drugs, crime, and prostitution in their neighborhood. An additional 34 instances have been citizens who are concerned about this council's position on inviting a predatory gambling casino to come to our area.

In the course of the last six years, more than 66 percent of the times that citizens have addressed this council for any reason, they have come to express their concern regarding businesses which make a profit by preying on our citizens. This council claims to represent the citizens of Kings Mountain by, quote, "enthusiastically and emphatically expressing our strong support" of the casino.

Yet, over two-thirds of the citizens who have addressed this council in the last six years are concerned about the affects businesses such as this casino will have on our community. This community most definitely DOES NOT enthusiastically and emphatically express our strong support of this casino. The opposite is true.

In a few days, we will celebrate the 234th anniversary of the Battle of Kings Mountain, in which men fought and died to win freedom from a government that refused to represent their interests. I believe it is a mockery for this council to proclaim our proud heritage on one hand, while refusing to factually represent our citizens on the other hand.

I would remind you of these words that motivated our forefathers: "All men . . . are endowed by their Creator with certain unalienable Rights, that . . . to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed . . . "

Mr. Mayor, City Council. I am grateful for the opportunity to speak here tonight. But you have not given me this opportunity. This is my right as a citizen. Rather, your opportunity to sit on that bench has been given you by we the people, and you serve at our pleasure. When we as citizens take time to come before you to express our concerns, we are not keeping you from your work. We are giving you information that is vital in order for you to do your work.

You have been elected to represent this community. We the people ask that you perform the task for which you were elected, and that you begin to accurately represent the concerns of the citizens of this community.

Withdraw your letter welcoming the Catawba Casino to our area. Issue a letter to the Bureau of Indian Affairs, informing them that your constituents are against this proposed casino. Begin to "enthusiastically and emphatically" express your strong support for the citizens of this community, rather than for an outside organization whose business model can only wreak havoc on the life, liberty, and happiness of the citizens in this community.

This is surely what gambling does. Those who favor and entertain it become blinded and corrupted by the spirit of covetousness. In this case, leaders in Kings Mountain and Cleveland County can't see what their constituents really want for the perceived promises of dollar signs obstructing their vision.

In his book, What if America Were a Christian Nation Again, the late Dr. D. James Kennedy noted that "[t]he greatest example of this in history is the picture of the Roman soldiers – the gamblers at Golgotha – surrounding the cross of Christ. They are down on their knees with their faces to the mud, casting dice for the garments of Christ, while above them the savior of the world is dying. Gambling has a pernicious effect upon people in every conceivable way." [4]

We should pray that God would remove the scales from the eyes of these local leaders. Moreover, we should pray that God would give grace for all to see that gambling is a cancer, eating away at our integrity – eating away at our most fundamental values – that we shouldn't live by bread alone, we shouldn't see life consisting only in the things we possess – that we can really trust one another – that we really should love our neighbor as we do ourselves. Gambling degrades the soul of a state and nation.

Resources:

[1] Why Casinos Matter. New York, NY: Institute of American Values, 2013

[2] Stop Predatory Gambling, stoppredatorygambling.org, N.p.,n.d. Web. 03 Oct.2014

[3] "Local Officials Endorsed Catawba Casino without Considering Effects." Christian Action League RSS. N.p., n.d. Web. 03 Oct. 2014.

[4] Kennedy, D. James, and Jerry Newcombe. What If America Were a Christian Nation Again? Nashville: Thomas Nelson, 2003. Pg. 138


http://www.renewamerica.com/columns/creech/141005

Casino is a bad bet

LETTER: Casino is a bad bet

Published: Friday, September 13, 2013

Much has been written in recent days about the Catawba Indian Nation’s proposal to build a 220,000 square foot Las Vegas-style gambling casino in Cleveland County, North Carolina. Yes, a gambling casino may bring new jobs to the area, but at what cost?

An editorial in the Shelby Star on September 10 suggested casino jobs would be comparable to the employment opportunities provided by Clearwater Paper, AT&T, KSM Castings, and the like. This is not the case. Businesses like these not only employ local citizens but also produce valuable goods and services that benefit citizens, businesses, and the local and state economy. In contrast, the entire purpose of a gambling casino is to separate citizens from their hard-earned dollars without offering any tangible benefits in return. In doing so, casinos cannibalize the state and local economy by diverting consumer spending away from the purchase of goods and services, and into the pockets of the multi-billion dollar gambling industry.

The same editorial acknowledged that the establishment of a casino would inevitably lead to an increase in gambling addiction. This is absolutely true; however, it would not just be limited to “visitors” or “tourists,” as the editorial suggests. Studies show that, on average, five percent of the general population who gamble will become problem or pathological gamblers. Among regular gamblers, problem gambling is estimated to be as high as 20 percent. Moreover, a report to the

National Gambling Impact Study Commission found that the prevalence of pathological and problem gamblers roughly doubles within 50 miles of a gambling facility. Gambling addiction breeds a host of economic and social ills, including increases in crime, embezzlement, bankruptcy, job loss, domestic violence, child abuse, divorce and even suicide. These problems would not only plague “tourists” and “visitors” of the proposed casino, but they would heap devastating consequences on the individuals and families in and around Cleveland County who become victimized by gambling addiction.

Going “all in” in favor of a Las-Vegas-style gambling casino without considering the substantial negative social and economic costs is short sighted at best. Undoubtedly, job creation and economic growth are extremely important to Cleveland County and our State, but the ends simply do not justify the means. A gambling casino would be a bad bet for the citizens of Cleveland County and the State of North Carolina, and for these reasons, this proposal should be rejected.

John L. Rustin
President, North Carolina Family Policy Council
Raleigh

http://www.shelbystar.com/opinion/letters/letter-casino-is-a-bad-bet-1.202071

 

....casinos are the wrong way to go....

Column: Chris Fitzsimon says casinos are the wrong way to go

Gov. Bev Perdue and Michell Hicks, principal chief of the Eastern Band of Cherokee, kick off live-table games at Harrah's Cherokee Casino. The casino introduced live dealers under a new gaming compact enacted in June.

Gov. Bev Perdue and Michell Hicks, principal chief of the Eastern Band of Cherokee, kick off live-table games at Harrah's Cherokee Casino. The casino introduced live dealers under a new gaming compact enacted in June. Credit: EASTERN BAND OF CHEROKEE INDIANS VIA PRNEWSFOTO

1

 

By: CHRIS FITZSIMON | NC Policy Watch
Published: August 25, 2012

 

Gov. Beverly Perdue headed to Cherokee Tuesday to join officials of the Eastern Band of Cherokee Indians to officially open live-table gaming at Harrah's Casino and Hotel. The first hand has been dealt.

It's not the biggest story of the week. It doesn't have anything to do with the election or Medicare or a U.S. Senate candidate claiming that women can't get pregnant when they are raped.

In fact, it's almost a nonstory, announced by press releases published in places like the Casino City Times. But there's something about it that is worthy of a discussion and it boils down to a simple question:

Is this the kind of state we want?

Think about it. The governor of North Carolina is celebrating not only the launch of live-table gaming in North Carolina but the latest escalation in the cozy relationship between the state and the predatory gambling industry.

Officials in the Perdue administration negotiated the deal that allowed live dealers at the casino in exchange for the state getting a cut of the profits, a few million dollars a year for education. And it was a plan with bipartisan support. The Republican-led General Assembly approved it.

This is not about the morality of gambling. It is about the state of North Carolina literally partnering with the predatory gambling industry to help fund our schools. And predatory is the right word.

Les Bernal with the national group Stop Predatory Gambling came to Raleigh earlier this year and laid out the disturbing facts at an N.C. Policy Watch Crucial Conversation luncheon.

Casinos make the vast majority of their money off a small percentage of customers, mostly problem gamblers or folks on the way to a serious problem. Bernal described how the most sought-after players were the folks who repeatedly used the ATM machine in the casino to keep getting more cash to keep gambling.

Casinos have a deal with the company that operates the cash machines to sell them the names of the people who make withdrawals, as they are the most likely customers to return. The prospects are then lured back with vouchers or a free hotel room to get them back in front of the live dealers whom Perdue celebrated this week.

Supporters of the casino compact tout the dealer jobs that will be created and the increase in tourism that new live games will bring to that area of the state. It's economic development, they tell us.

Then why only the casino in Cherokee? Why not live gambling in state-sanctioned casinos in Pinehurst or the Outer Banks or Charlotte, maybe right next to the NASCAR Hall of Fame? Think of the jobs we could create and all the money we could raise for our schools by luring problem gamblers into all those places, too.

You might be thinking that it's not a big deal that the state is now a more involved partner with the predatory gambling industry since the state already operates a lottery.

That's true, and that is a problem too, judging by the strong evidence that low-income people play the lottery at higher rates than the general population.

The folks who run the lottery and the people who defend it tell us virtually every day how much money schools are getting from the "education" lottery, but they never talk about where it's coming from. In fact, they don't keep any demographic information at all.

They just keep up with how much they make by convincing people to waste their money on a one-in-a-million chance of striking it rich because politicians of both parties would rather not raise money for education honestly and fairly.

They'd rather prey on the poor and the desperate the same way the casinos do. It's bad enough that Perdue and her legislative partners in predatory gambling approved the Cherokee deal.

Now she's appearing at the casino to celebrate it. This is not the kind of state we want, but it is the one we are getting. And it's disgusting.

http://www2.journalnow.com/news/opinion/2012/aug/25/wsopin02-chris-fitzsimon-column-the-kind-of-state--ar-2543749/

Updated: August 25, 2012 - 12:00 AM

Gambling is not "gaming."

http://tinyurl.com/ycwxrsf

Government and Gambling Don't Mix

By Robert M. Levy

Sunday, June 17, 2012

Taking from the poor and giving to the government is not supposed to be the method used to finance public services.

But that may be the regressive taxation template if the gambling interests now invading North Carolina are allowed to put down roots where longleaf pines used to prosper.

When The Pilot opposed the North Carolina lottery, stating it would soon lead to "even more insidious forms of publicly sanctioned gambling," it was prophetic. At the "Education Lottery," public officials do not refer to their scheme as "gambling"; it is "play to pay" for better schools.

These are the words of leeches that profit from low-income workers and the dollar bills of welfare recipients, none of whom can afford to gamble, but all of whom feel the need to place sucker bets on a dream that they will never be poor again.

The latest scheme to tax the families of the poor and working class is the so-called "sweepstakes" Internet gambling hall. A court ruling recently confirmed a loophole in state law that permits persons to enter into Internet "cafe" sweepstakes for the chance to win big. It should have been met with outrage, and it was by some.

Bipartisan House Bill 226, if passed, would outlaw Internet sweepstakes. But it was referred to two committees in March and appears to be well-buried. Federal officials should have closed such operations for holding "sweepstakes" while ignoring the "no-purchase necessary" requirement imposed on Monopoly at McDonald's, but they were obviously too busy ignoring medical marijuana laws in California.

In the meantime, a bipartisan bill to expand Indian gambling was passed by the General Assembly and signed by the governor on June 6.

In Moore County, too, gambling has been met with some friendly reception. The Carthage Town Board is preparing for what The Pilot called the "emerging Internet gaming business." Robbins already has at least two gambling parlors. Whispering Pines now zones such casinos as part of its "neighborhood shopping district."

Meanwhile, back at the legislature, Senate Bill 209 seeks to create a video lottery, and Senate Bill 523 seeks to allow slot machines near Interstate highways in counties that border another state. And still there is no real effort in the new legislature to fulfill Article V(4) of the 2012 Republican Party platform to repeal the lottery passed by a Democratic General Assembly.

The problem with gambling is that it, like other vices, allows government to profit with very little pain. Those who choose to gamble are often the poor or those who financially struggle. These people rarely vote.

Therefore, governments like Aberdeen can pass high taxes on such establishments, increasing revenue with little backlash from the electorate. This symbiotic relationship between government revenue and voter ambivalence is a match made in hell.

Modern casino management preys upon addicted gamblers. On the NPR show "This American Life," in a recent episode titled "Blackjack," the producer explained how gambling "hosts" target the most vulnerable among us, people whose brains are "wired" for gambling addiction, running them into debt even after they have declared bankruptcy.

I am a conservative, not a libertarian. I believe that government needs to outlaw the taking of life at any time after conception. I further believe that government should continue to arrest those who sell intoxicating, recreational, narcotic drugs.

I have no problem when government passes laws consistent with public morality because government, as the collective will of its people, has an obligation to protect families from those who profit from addiction. And government ought to be ashamed of itself when it raises money from those who can least afford to pay.



Gambling is not "gaming." It is not a game. It is the big business of transferring wealth from the vulnerable to those who prey upon the vulnerable. If we need a school, we need to all pay our fair share of taxes for it or simply "make do" with what we can morally afford. Congress ought not overtax the rich, and the General Assembly ought not allow a gambling tax on the poor.

Gambling and class warfare taxes are similar. They are rooted in a desire to pay for our needs using "other people's money."

And that is immoral.

Robert M. Levy is chairman of the Moore County Republican Party. Contact him at Law52@prodigy.net.

http://www.thepilot.com/news/2012/jun/17/government-and-gambling-dont-mix/

N.C. gambling arrives by accident

N.C. gambling arrives by accident
The Virginian-Pilot

Those quaint produce stands lining the drive through Currituck County to the beach may soon be outnumbered by Internet sweepstakes parlors - if they aren't already.

Although the North Carolina legislature banned the video games in an amendment to an existing law against gambling two years ago, they're alive and thriving on N.C. 168 in Moyock and beyond.

Shortly after the ban was approved, sweepstakes operators and software providers challenged it. This month, a divided state Court of Appeals sided with the industry, contending the law is too broadly drawn.

Since then, more parlors have opened in Currituck, joining others that have been in operation during the court challenge.

The parlors work like this: Players purchase Internet or phone time to click through computer screens to see if they've won a cash prize. The game operators contend it's not gambling because the results are determined before the players sit down at the screen.

As The Pilot's Jeff Hampton recently reported, Currituck officials have issued citations to sweepstakes parlors for zoning violations. Those citations are also being challenged, and sweepstakes operators have asked the County Commission to allow the games.

Two years ago, Elizabeth City approved a similar change that imposes taxes on each sweepstakes machine. Three parlors have been operating there, generating revenues of approximately $62,000 a year, according to officials.

But both localities have more to lose than gain from these establishments.

And North Carolina has much to lose if it can't find a way to regulate an industry that seems to operate in the small space created by loopholes and technicalities. In Portsmouth, for example, gambling threatened to overrun the city before officials stepped in.

Gambling is an industry that shouldn't happen by accident or because laws are insufficiently precise.

Elizabeth City is striving to revitalize its historic downtown, and sweepstakes parlors - even on the outskirts of downtown - don't project an inviting image to visitors or prospective businesses. The same is true for Currituck, which relies heavily on its family-friendly tourism image.

Proponents of sweepstakes parlors contend they're good for the economy, but there's substantial evidence that gambling, even in its simplest forms, isn't an innocuous pastime. It diverts money that would be spent on real goods and services, and money disproportionately comes from people who can least afford to part with it.

Virginia successfully shut down these games last year. If North Carolina's high court doesn't uphold the ban, lawmakers in Raleigh need to try again. The state has a history of corruption related to video gambling, and it shouldn't run the risk of more.

The North Carolina Sheriffs Association and the Association of Chiefs of Police oppose the games. Those warnings sound like winning advice for local and state officials.

“Stacked Deck”

Class warns of dangers of gambling
by Keith Strange
Staff Writer Mount Airy News


A first-of-its-kind class on gambling addictions is hitting the jackpot among students taking the course at Surry Central High School, school resource officer and co-instructor Randy Simpson said Wednesday.

The course, called “Stacked Deck,” is comprised of six classes that include pre-tests, presentations, interaction with students and a post-test used to gauge the effectiveness of the class. It is designed to cover the history of gambling and the pitfalls that can result.

“The entire six-course class took two weeks to work with the students’ schedule,” said Simpson, who helped teach the class with instructor Greg High.

After completing the class, the students were asked to design posters for placement around the school that warn others of the dangers of compulsive gambling.

The first class was attended by 22 students, Simpson said.

“We were the pilot school and this is the first class,” he noted, adding that officials are considering expanding the class to other schools in the region. “During the course of the class, we had representatives from other schools who may be interested in teaching it in their curriculum.”

The take-away from the class, Simpson said, was students coming away with a clearer view of problem gambling. He said he was impressed with the students’ maturity and point of view.

“They asked a lot of good questions and were very interested in what was being taught,” he said. “I’m not a teacher, I was the guy standing there in a police uniform, but I noticed that they were very attentive during the presentations and they asked good, valid questions. Some of the stuff we covered during this class included the kinds of things to look for if you suspect a family member has a gambling addiction.”

To that end, Simpson said he left some materials laying on the table “for students to take anonymously if they wanted to.”

“I noticed that quite a few of them were taken,” he said.

The impetus for the course was a noticeable rise in problem gambling across the state, Simpson said.

“There are a lot of people spending their paychecks in the Internet cafes or buying lottery tickets,” he said. “That’s money that could and should be used for other things like a house payment and groceries. These kinds of problems have been reported throughout the state, and we saw this class as a way to address the problem.”

Simpson said he hopes the class can open a dialog in the community to raise awareness about problem gambling.

“People have addictions. They’re going to gamble,” he said. “But this is a way to make us more wise to the problem and more capable of diagnosing the signs and symptoms.”

Simpson said the program was funded through state grant money, and called the experience “very rewarding.”

“The kids taking the class were going home and telling their mothers and fathers about it, and we’ve gotten some positive feedback from the parents as well,” he said.

Asked how they liked the class, the students were unequivocal.

“We loved it,” they said. “It was really interesting.”

As for the “coolest” thing they learned, just ask 15-year-old Kyle Scritchfield.

“You have a better chance of dying going to buy a lottery ticket then you do of winning the lottery,” he said.

Gambling Cafes

Those who promote Gambling and "Something for Nothing" schemes by whatever name, challenge and promote unregulated Gambling around the nation to suck discretionary income from the local economies.

Prosecutors are pursuing Leo Pelletier in the Commonwealth, yet the issue is mushrooming as Government Sponsored Gambling is supported.

Worth watching!

Barely legal: reincarnation of video gambling continues on borrowed time pending court challenge
Written by Quintin Ellison

It’s early on a workday, and there’s a single player seated at one of the 18 machines in the two-room M&J’s sweepstakes café, located in a small strip mall on Highlands Road in Franklin.

Louise Dills, who works at the nearby manufacturing plant Whitley Products, has casually dressed for the time she’ll spend here. The Macon County native was wearing a sweat suit, T-shirt and tennis shoes, her typical sweepstakes attire. She was playing her favorite sweepstakes game: “Candy Money.”

M&J’s is one of more than 1,000 sweepstakes cafes that have sprung up statewide, despite a ban by the General Assembly on video gambling. Dozens are here in Western North Carolina.

Sweepstakes cafes such as this one sell “time” to customers to gamble online or by cell phone. Customers, in return for whatever amount of money they care to risk, log on to their machine of choice and play for the allotted time they purchased.

Sweepstakes café owners and managers argue that letting customers “find” cash and prizes via computers is simply buying and selling Internet or phone time — not real gambling, in other words.

Dills has defied the odds, in her accounting at least. She said she’s won more money at the games than waved goodbye to. Dills won $5,800 playing Candy Money a few weeks ago. It isn’t a hard game to master, she said, putting down a cigarette into an ashtray to free her hands and visually explain the game. You simply match identical items on the screen. They match; you win, she said, pointing at the screen.

“I’ll probably never win that much again,” Dills said of that blue ribbon day. “But I really play just to take a break.”

That break could end for gamblers such as Dills if the state of North Carolina has its way. Sweepstakes cafes such as this one are in the crosshairs.

The General Assembly first banned video gambling in 2007. It didn’t take long before so-called “sweepstakes” cropped up as an alternative. Lawmakers viewed the sweepstakes as a reincarnation of video gambling under a different name, designed to circumvent the previous ban. So the General Assembly went back to the drawing board and passed another ban in 2010 aimed at putting sweepstakes cafes out of business as well — the third attempt in an ongoing game of cat and mouse between the state and video gambling industry.

But the situation didn’t turn out as black and white as lawmakers had anticipated. Lawsuits challenging the ban have allowed the games to continue, leaving local law enforcement officers confused about whether sweepstakes machines operating in their counties are illegal or not.

And, meanwhile, owners of sweepstakes cafes are arguing that any attempt to close them down is a violation of free speech rights under the First Amendment — the basis of the pending lawsuit.

“There are some people who have gambling problems,” said Melissa Hurst, the owner of M&J’s in Franklin. “But what is the difference between us doing it here, and the casino being right over the mountain?”

Or, for that matter, sweepstake proponents argue, what’s the difference from sweepstakes machines in parlors and the state-endorsed, state-managed education lottery?

The sweepstakes cafes are a helpful, if not always fully embraced, revenue source in towns such as Franklin. The municipality charges a $50 business licensing fee and a $2,600 sweepstakes fee. The towns of Canton and Maggie Valley levy comparable fees on businesses operating sweepstakes machines.

In Franklin, it adds up to about $10,000 a year in revenue for the town, according to Franklin Finance Officer Janet Anderson.

And that’s just for four sweepstakes cafes located in the town limits; there’s many more operating outside those boundaries in greater Macon County. The county, however, doesn’t levy specific fees for these types of businesses.



‘Confusing law’
Law enforcement officers in Macon County, and in most of the state, have taken a hands-off approach to the sweepstakes cafes.

“We’ve been advised by the state Attorney General’s office not to enforce the law,” Macon County Sheriff Robbie Holland said. “It’s a very confusing law. We know there are people potentially abusing it, but the AG did not want us to prosecute any cases until they have a ruling.”

The state Court of Appeals held oral arguments last month on two lawsuits challenging the state’s sweepstakes ban but has not issued a ruling. The cases were first heard by lower-level courts, with those judges issuing mixed reviews on the 2010 law.

One judge upheld the entire law to ban the machines. Another judge struck down part of the law and allowed that certain machines could operate legally but also agreeing to the Free Speech argument in certain other cases.

“We have to keep watching the law, because it keeps changing,” M&J’s Hurst said.

Christy Wilson, who works in a nearby sweepstakes café owned by the same family, agreed with Hurst.

“You’ve got to make sure you’re up to date,” Wilson said.

The Buncombe County sheriff was one of the few in the state who was enforcing the state law banning sweepstakes machines. Buncombe, perhaps, has a lower tolerance for the offshoot of video gambling. Its former sheriff went to jail for his involvement in an organized crime ring centered around video poker.

After charges against those operating the sweepstakes machines were dismissed in Buncombe County court because of the pending lawsuit, the sheriff announced this month that he would suspend action against sweepstake operators.

Running sweepstakes cafes come at potential costs in the community to these business owners and workers included.

“There’s a lot of people who look down on it,” Hurst said.

Leaving possible moral implications aside, Sheriff Holland’s deputies in actuality respond to very few calls at or from the local sweepstakes cafes.

“There are few to zero problems at the establishments where these machines are set up,” Holland said.

What happens in Vegas hurts N.C.

Letter: What happens in Vegas hurts N.C.

“What happens in Vegas stays in Vegas” is a reassuring lie. Sam Skolnik, in his book “High Stakes: The Rising Cost of America’s Gambling Addiction” (reviewed in The Christian Science Monitor), describes the cost to those states which depend on gambling to bring in money to meet their expenditures. The social fallout is sobering: Nevada has “higher rates of crime, bankruptcy filings, home foreclosures, divorces and suicides than anywhere else in the country.”

One in 16 adults is a pathological gambler, losing nearly four times as much as the average gambler. The suicide rate among seniors in Nevada is three times that of the rest of the country. This makes Las Vegas one of the most dysfunctional communities in America.

Why don’t we hear more about this? Skolnik notes, “When gambling in America brings in about $100 billion a year in profits, good P.R. and rigged studies come easy to help expand the industry.” Highly paid lobbyists and unscrupulous politicians try to minimize the problems.

How does this affect North Carolina? There is a process called contagion. When politicians listen to the propaganda of the gambling industry and think other states are paying off huge obligations by this method they ignore prudent fiscal policies and rush to raise money in this unprincipled way.

Chris Fitzsimon in a recent column noted that, “State officials want you to know that no matter how poor you are, you can buy a lottery ticket and count on that one in a million chance of striking it rich.” He reports that an investigation last year by N.C. Policy Watch found that, “the counties with the highest per capita lottery sales were almost all also the counties with the highest poverty rates.”

What negative impact is our “educational lottery” having on North Carolina?


CALVIN S. MALEFYT, Ph.D.

Greenville

North Carolina Cherokee and the Potential of Default

Cherokee election politics fixed on looming casino debt
Written by Colby Dunn


In the current political debate, the word ‘debt’ has become ubiquitous. Cherokee is no exception, where discussion of the debt of the Eastern Band of Cherokee Indians — and how, precisely, to dispose of it — has dominated the election season since it began this spring.

With one month to go until the election for chief, vice chief and tribal council, voters are standing up at every public forum to ask questions about the debt while candidates are touting their plans to eradicate it.

Meanwhile, the finance department for the tribe has gone on a massive public information campaign: opening a forum on the tribe’s website, starting a hotline where people can e-mail questions and get an answer back from a finance officer and leafleting the reservation with brochures entitled things like “A Closer Look at Tribal Debt.”

One question seems to underlie the whole discussion: how much, exactly, is the debt?

Answers from different sources have been many and varied, and depend very much on where you stand politically. The incumbent chief and vice chief claim the tribe’s debt is manageable. The challengers claim it has ballooned out of control.

It’s often said that numbers don’t lie, and with tribal debt, these are the raw numbers as of June 30, the end of the last fiscal year.

The tribal government has two debts it’s paying off directly: $57.2 million is still owed on the $107 million school complex and $10.8 million is still owed on the Sequoyah National Golf Club.

There’s also an $8.9 million series of loan guarantees that the tribe backs for the Cherokee Historical Association’s line of credit, the Tribal Bingo Enterprise and Balsam West, a broadband enterprise the tribe has a stake in.

If you take the position of the tribe’s finance department and Principal Chief Michell Hicks, that’s all the debt the tribe has — $76.9 million.

But then, of course, there’s the casino debt.

The casino is undergoing a massive expansion project, for which the tribe’s casino enterprise has secured a $650 million line of credit. So far, the enterprise has tapped $494.3 million of it.

Deputy Financial Officer Kim Peone expects that not all of it will be spent when the expansion is complete, and she doesn’t consider that tribal debt at all.

The casino is an entity of the tribe, but is run by a separate group called the Tribal Casino Gaming Enterprise. The gaming enterprise, not the tribe itself, is responsible for the casino’s half billion in debt.

But here’s where politics comes into play. The current administration running for re-election is adamant that tribal debt shouldn’t include casino loans.

And it’s true that, if the casino defaulted, the bank wouldn’t come looking for the tribal government’s assets.

“We’re not ignoring the impact that a default would have on this tribal government and the services that we provide to this community,” said Peone. “But the casino debt is not guaranteed by the tribe, it’s guaranteed by TCGE.”

From that perspective, there’s $76.9 million in debt. Meanwhile, the tribe’s designated account it makes debt payments from has just over $134 million in it.

Simple math tells you that the tribe could pay the debt off today, but according to Peone, choose not to because that money is earning more interest than the debt is costing.

“Currently, the interest rate on that loan is less than the funds that we’ve invested in,” said Peone. “From year-to-date, that fund has earned 4.5 percent as opposed to 2 percent in a loan.”

On the current schedule, she plans to have both the school and golf course loans paid in full by 2014.



Casino debt part of bigger picture
But opponents say you can’t remove the tribe from the casino; they’re inextricably linked.

For starters, profits from Harrah’s Cherokee Casino accounts for roughly 90 percent of the tribe’s operating budget. If more of those profits were diverted to making debt payments, the tribe’s budget for providing services to enrolled members — such as schools and medical care — would be impacted.

Patrick Lambert, a challenger for the position of principal chief, said he thinks it’s impossible to separate casino debt from the tribe.

“It’s all tribal debt,” said Lambert, pointing out that the tribe’s operating budget would plummet precipitously were anything to happen to the casino debt.

This is Lambert’s second time going for the chief’s seat, and though he lost by a slim margin in the 2007 election, he defeated Hicks in the July primary. He is a lawyer for the Tribal Gaming Commission.

Lambert said he is concerned, too, about just where the tribe is investing its money to get such good returns, asking if such investments are too risky.

“I think it’s pretty clear on debt. I come from a background of small business, and so I understand about debt and borrowing and those type of issues,” said Lambert. “Debt is a necessity, but it’s also something you can’t let get out of control. We need to control the spending so we can start applying more of the revenues we do have to overall debt.’

Right now, said Peone, the tribe puts 8 percent of every dollar it spends to paying off its non-casino debts.

The casino pays $20 million a year on its debt, plus more on interest.

Both principal chief candidates have promised to pay down the debt if they are elected, though that could be plus or minus a few hundred million depending on what you consider “the debt.”

The current administration is out to prove that the tribe is on sound financial footing, especially compared to other municipal governments.

The opposition is calling for a check on spending and reigning in the debt.

And when voters visit the polls September 1, it may be the best numbers that win.

“Operation Last Man Standing”

Sheriff: Bribe offered to keep illegal activity under radar
Jordan-Ashley Baker

SHELBY — A Gaston County man faces charges of bribing an undercover deputy in the hope of keeping his illegal video gaming businesses in Cleveland County under law enforcement’s radar.

More than $24,000 in bribes and three illegal gambling machine raids later, officials say Artie Stevenson Smith’s luck ran out. Sheriff Alan Norman said the Cleveland County Sheriff’s Office conducted “Operation Last Man Standing” on Wednesday to end 63-year-old Smith’s alleged illegal video gaming business and months of bribery.

Norman said Smith approached a Sheriff’s Office narcotics sergeant in the hope of protecting his video poker businesses on South Post Road in Shelby and Cherryville Road in Waco. That meeting tipped off a more than four-month-long investigation into Smith, his video poker business and allegations of bribing a government official.

“This sends a statement that this agency has zero tolerance when it comes to public corruption,” Norman said. “When his deputy was approached, he immediately informed his supervisor, and it immediately became an investigation with the Sheriff’s Office narcotics division.”

Norman said the sergeant met with Smith nine times – eight of which Smith gave the undercover officer cash payments ranging from $500 to $10,000. In total, Smith paid out $24,500 in cash, Norman said.

Smith was arrested Wednesday and both of the gaming businesses he allegedly operates were raided simultaneously. Norman said deputies removed 26 video gaming machines used for Smith’s illegal gambling operation.

Sheriff’s deputies hoisted the large black machines onto hand trucks Wednesday, strapped the machines tightly into place and wheeled them into a trailer emblazoned with the Cleveland County Sheriff’s Office logo. Sheriff’s vehicles in the parking lot of Susan’s Sweepstakes aren’t an unfamiliar sight for neighbors and passersby on South Post Road.

Wednesday marked the second time in as many months that the Cleveland County Sheriff’s Office raided Smith’s business and seized the gaming machines. Norman said Smith refurbished his business with more machines since the first raid, and, to date, the Sheriff’s Office has seized 42 of Smith’s machines.

‘A law enforcement nightmare’

The bulky machines, painted black with gold trim along the edges, had TV monitors to view the games and slots where dollar bills could be inserted. Norman said illegal video gaming machines are a multibillion-dollar industry with cash profits.

Smith, a convicted felon, had more than $3,600 in cash in his possession when he was arrested, Norman said. Officers executed a search warrant at Smith’s home on Anne Neely Road outside Gastonia, where they found a handgun, according to Norman.

North Carolina passed a law banning video poker machines in 2006. Sweepstakes machines replaced video poker in the following years as trial judges ruled that the video poker statutes didn’t apply to some types of electronic sweepstakes devices. Lawmakers voted to make sweepstakes gaming illegal last year, but the judges continue to hear challenges to the law in North Carolina courts.

“It’s my wish that the General Assembly would undertake the study of video poker and legalize it through the state of North Carolina or make it totally illegal to possess the machines, because it is a law enforcement nightmare,” Norman said. “And this is a prime example of what could occur in a neighboring county or in any county in North Carolina. It’s something that the state needs to decide what they’re going to do with these machines or this industry.”

Norman two other Cleveland County video sweepstakes businesses, that are no longer in operation, reported armed robberies at their locations where perpetrators displayed handguns.

Smith is charged with eight counts of bribery of a government official and two counts of felony possession of video gaming machines. Officers took Smith to the Cleveland County Detention Center on Wednesday, and he was given a $500,000 secured bond. Norman said Smith’s first court appearance is scheduled for today.

Law enforcement officers from Gaston County and Shelby Police Department assisted the Sheriff’s Office with “Operation Last Man Standing.”

Gaming ban made sense in past, makes sense today

Gaming ban made sense in past, makes sense today

You can bet on some good news today.

A new state law that bans Internet sweepstakes games, the latest wrinkle in video gambling, goes into effect today after a Wake County judge dismissed a lawsuit by an amusement company trying to beat back the legislation passed by the N.C. General Assembly.

There's plenty of gambling in North Carolina. If some people want to throw their money away, hoping to beat often astronomical odds in a game of chance, there are perfectly legal opportunities galore, such as through the state lottery. In that case, proceeds from gambling go directly to the educational needs of Tar Heel schoolchildren and college students.

But as we've said before, the amounts of money that flow from unregulated gambling don't go to any worthwhile causes and too often attract criminal activity and corruption.

Former Buncombe County Sheriff Bobby Medford sits in a federal prison today, serving a 15-year sentence for shaking down video game operators for protection money. Questionable contributions from the video poker industry are what first brought a spotlight on former House Speaker Jim Black, who was just released from federal prison after serving time on corruption charges.

Industry officials argue that Internet sweepstakes games are a different animal from video poker. Customers buy Internet or phone time or offer services first with predetermined odds before playing games on a computer that reveals potential prizes on a monitor. You can largely bet the odds are stacked against winning.

The temptation for legislators facing a $3.5 billion shortfall in the state's budget is to legalize some form of video gaming operations once again, hoping for a cheap source of revenue. Some local governments have already placed taxes on local operations.

But government-sanctioned gambling has been called the “poor man's tax” with good reason. Counties with the highest poverty and unemployment rates have been shown to have the highest lottery proceeds as well. Legalizing Internet sweepstakes games only sticks the industry's hand deeper into the pockets of the people who can least afford it as we make our way out of the Great Recession.

Some officials understand the problem. “The legislature spoke loudly and clear that North Carolina does not tolerate Internet sweepstakes casinos,” said Sen. Josh Stein, D-Wake, who shepherded the ban through the Senate. “What these casinos offer is a form of video poker.”

It would be nice if North Carolina has decided this problem once and for all, but don't bet on it. The video gaming industry is likely to appeal Wake County Superior Court Judge Paul Ridgeway's decision, looking for yet another loophole.

But we agree with Mecklenburg Sheriff Chip Bailey's assessment of that risk: “Video poker in North Carolina is run by organized crime, period. It has been and will be again if they let it back in.”

But today, the law should be clear enough. It's time for the video game operators to unplug their machines and quit playing North Carolinians for suckers.

No gaming hypocrisy

No gaming hypocrisy

The state legislature's persistent efforts to ban video poker and other forms of electronic gaming raise suspicions among cynical observers.

Some say the state is just trying to protect its own turf, making sure the N.C. Education Lottery continues to profit from a gambling monopoly.

The charge of hypocrisy isn't fair. Video gambling operations have been associated with political and law-enforcement corruption in North Carolina. They've skirted the laws and created headaches for sheriffs. They take advantage of people who find the games addictive and spend too much money playing. Stamping them out is good public policy.

Still, the state's attitude toward gambling isn't entirely consistent, to put it charitably. Gov. Bev Perdue, visiting Greensboro on Thursday, proved the point. While she supports the ban on video sweepstakes, she said, she wouldn't rule out putting some version of those games under the control of the state lottery as a source of additional revenue.

That move has been proposed before. State Sen. Julia Boseman, D-New Hanover, filed a bill in May that would have done just that; it received no support. She went on to cast the only vote in the Senate against the bill banning video sweepstakes.

Last year, state Rep. Earl Jones, D-Guilford, introduced a bill that would legalize video gaming and funnel 20 percent of gross revenue to the state. It garnered no support, and Jones also voted against the 2010 video sweepstakes ban. Neither Boseman nor Jones will return to legislative office in 2011.

Perdue should take the hint.

Yes, the governor is right to worry about a looming budget gap she pegs at $3.6 billion. Raising state revenue was the motivation behind Jones' and Boseman's efforts, too. And that's what the lottery is all about.

But the lottery puts North Carolina deep enough into the gambling industry -- more than deep enough. Lottery sales topped $1.4 billion during the 2010 fiscal year. That's a lot of money to take out of the pockets of North Carolina residents. It's money they could have spent with local businesses but gambled away instead. The state should not add to the take by further enticing them with video gaming devices that state officials themselves have said can be highly addictive.

The opportunity to raise revenue isn't a good reason to expand the state's participation in gambling. Enough is enough. Except where allowed by federal law -- meaning the Cherokee reservation -- no one should run electronic gaming in North Carolina. If it's a bad idea for private operators, it's just as bad or worse for the state.

And, surely, the state does not want to be called a hypocrite.