Video Poker Comeback? Wheel Spins - Again

Updated February 23, 2009

The ruling addressed a lawsuit brought by a Johnston County convenience store which challenged the new video poker ban.  Manning declared that federal law prohibits North Carolina from outlawing video poker while still allowing it on the Cherokee Indian Reservation. In his decision, he wrote, “The state acted unlawfully in authorizing the Eastern Band of the Cherokee Indians to possess and operate video gaming machines on tribal lands within North Carolina because that activity is not allowed elsewhere in this state."

It isn’t the first time that Manning has issued a controversial ruling. Most notably, the judge has become infamous for attempting to reorganize and run North Carolina school system through his decision in the case Leandro v State of North Carolina.

The battle
For years, proponents of video poker argued that the machines were nothing more than good, clean fun and that they brought much-needed tax revenue into the state. Retailers liked that they drew customers into their stores. Opponents equated video poker to gambling, of which they expressed disapproval. Some said that the games preyed on low-income individuals. They argued that in an industry rife with corruption, video poker wasn’t offering up its fair share in tax revenues anyway.

The fight over video poker machines seems as if it would be simply ideological, but over the years, it became much more complicated than that.

Stimulating the economy or the politicians?
While politicians spend trillions on bailouts and economic stimuli, convenience stores said the ban on video poker machines cost their businesses money and forced cuts. But while the Manning decision is on hold until higher courts either affirm it or toss it out, one thing seems certain. Video poker definitely stimulates the bank accounts of politicians, lobbyists and political fixers.

Black mark
With video poker, payoffs were limited to $10 in non-cash prizes. But higher stakes were played in political circles.

In just the 2004 election cycle alone, video poker interests poured $200,000 into campaigns, according to Democracy North Carolina. Former NC Speaker of the House and Capitol Monitor Hall of Shame member Jim Black led the legislative pack with $46,000 – an amount that was added to the princely sum of $108,000 he collected in 2002.

Of course, it’s easy to see why he was chum-in-chief for video poker. Speaker Black kept the industry in business. In 2000, the State Senate pushed for a state owned gambling lottery while voting to outlaw the 20,000 poker machines located in bars and convenience stores across North Carolina. They feared an influx of new video poker machines from South Carolina, where they had recently been banned. But after the House, under Jim Black’s tutelage, got through with the bill, it only included new restrictions on the video poker industry, not an outright ban.

It was a familiar scenario to legislative watchers. Charlotte Observer columnist Jack Betts even referred to the practice as a “rite of spring.” The House Speaker had protected the video poker industry for years. Robeson County Democratic Rep. Ronnie Sutton told Betts that “The speaker has this thing about video poker.”

A cynic might have said the whole exercise could have been a way to get video poker operators to pay more in political protection money.

Suspicions about Jim Black’s ties to the video poker industry swirled around for years, eventually coming to the attention of prosecutors. Black’s “thing” finally became his undoing, and only after he was indicted on corruption charges, causing legislators to distance themselves from him in droves, was a true ban on video poker finally enacted in 2006.

Political players

• Bribery plays a role – On the very day that anti–gambling Republican Michael Decker, another Capitol Monitor Hall of Shamer, cast a critical vote making Jim Black co-speaker; Decker received $8000 in campaign contributions from video poker operators. Then he used $8000 from his campaign fund to buy himself a car.
• Keeping $ in the family – While the Legislative Black Caucus Foundation was being criticized for using special interest money to award scholarships to family members, video poker was paying to play. The NC Amusement Machines Association, a representative of the video poker industry, gave contributions to the Black Caucus which were used for college scholarships for relatives of five House members, possibly currying the favor of those House votes.
• Lobbyist cozies up – During Jim Black's last campaign, video poker lobbyist Don Beason, a third Hall of Shame member involved with the video poker industry, loaned the Speaker a half million-dollars, a clear breach of ethics for both Beason and Black.

Double Black Diamond
In fact, the investigations of Jim Black and his co-conspirator, Michael Decker, became central in a federal video poker probe called Operation Double Black Diamond. Double Black Diamond resulted in twelve convictions including Jim Hunt’s former DOT Secretary Garland Garrett, whose family business made $2 million in illegal gambling profits.

The next step
Recognizing that his decision was likely to garner a challenge, Judge Manning immediately stayed his own ruling to give the state an opportunity to appeal, and State Attorney General Roy Cooper’s office announced that an appeal was imminent. Meanwhile lawmakers in both the House and the Senate began their analysis, sizing up whether they should take additional action or wait for the courts.

Place your bets
With Judge Manning’s ruling, politicians and influence peddlers may have a chance to get back on the gravy train. Will battered retailers be able to get a piece of the gambling action or will the government keep its lottery as the only game in town?