COLUMBIA — South Carolina’s historically high-powered gambling industry has so far largely kept its powder dry as some state senators move to close a perceived loophole in the state’s video poker ban.
By the numbers
1,064: Video gaming machines seized by the State Law Enforcement Division since January 201230-40: Rulings on video gaming machines by magistrate court judges won by the S.C. Attorney General’s Office in 20121: Ruling by a magistrate court judge on a video gaming machine lost by the S.C. Attorney General’s Office in 201210: Number of machine seizure cases currently on appeal at circuit court levelNote: The S.C. Attorney General’s Office gets involved in cases when there is a request for a hearing by a machine owner who has had one or more machines seized by law enforcement.Sources: SLED, S.C. Attorney General’s Office
But just as last year when a similar proposal stalled out in the Senate, the new measure by Senate Judiciary Committee Chairman Larry Martin faces a tough road ahead, even with the industry mostly staying on the sidelines for the time being.
A Senate Judiciary subcommittee cleared Martin’s bill last week following a hearing, and the proposal is set to be taken up by the full committee when the new legislative session opens on Tuesday.
During the last two years, video gaming has made a big comeback in the Palmetto State, even after video poker was banned by the state Supreme Court in 1999.
“We just need to address it before it gets completely out of hand,” said Martin, a Pickens Republican.
Machine operators believe they have found an exemption in the ban through the introduction of “sweepstakes” machines. The machines allow users to play computerized poker, slots and other games, but with pre-determined odds of winning a prize redeemable for cash. Supporters contend the new machines often found in convenience stores and strip malls are really no different than sweepstakes such as the Monopoly game offered at McDonald’s. The State Law Enforcement Division and S.C. Attorney General’s office disagree, saying the machines do not fall under any loophole.
Even with SLED conducting raids across the state to seize machines and state lawyers working courtrooms (the legality of seized machines must be decided by judges on a case-by-case basis), sweepstakes rooms have proliferated.
The financial incentive is strong.
SLED Chief Mark Keel said operators can make $1,000 to $5,000 per machine each day. “As long as there’s so much money in this business as there is, they’re going to look for another way,” he said. “I promise you that the day (the ban came down in 2000), they started looking for a loophole that they could drive a truck through.”
State Democratic Sens. Robert Ford of Charleston and Brad Hutto of Orangeburg both oppose Martin’s bill and think the state should move to regulate and capture revenue from video gambling.
Ford made bringing back video poker the centerpiece of his unsuccessful 2010 gubernatorial campaign.
He said statewide regulation of video gambling is the state’s only feasible, long-term option. Ford thinks even if Martin’s bill or another similar proposal filed in the state House passes, it won’t hold up in court. The video gambling industry is too adaptive to be stopped, Ford said, and lawmakers will have to file new bills each year to try to match wits with an industry adept at finding its way around regulations.
“There’s nothing you can do to keep up with the law to stop it,” Ford said.
Hutto, who described efforts by state government to outlaw sweepstakes machines as paternalistic, said he will place a minority report on Martin’s bill when it reaches the Judiciary Committee.
That scenario would make it much more difficult for the measure to pass even if it clears the committee.
Both Hutto and Ford have received campaign contributions from the gaming industry, according to state records.
South Carolina’s once-booming video poker industry has a history of flexing its political muscle, most notably throwing millions behind a successful effort in the late 1990s to unseat former GOP Gov. David Beasley. Beasley had tried to ban video poker before the state Supreme Court decision.
Whether the gaming industry will throw its weight around this year remains to be seen. Reggie Lloyd, an attorney who was Keel’s predecessor at SLED, continues to represent sweepstakes operators, along with a small cadre of other state attorneys. Former Columbia Mayor Bob Coble, who lobbied for a Georgia sweepstakes machine manufacturer during last year’s legislative session, declined to comment on whether he will be representing manufacturers this year.
The initial registration period for lobbyists to sign up with the State Ethics Commission is still under way, so a clear picture of who’s representing the industry isn’t yet available. Still, the industry could add more lobbying power at any time during the five-month-long session.
And Martin concedes that even if his bill passes, it likely won’t be the final word on the machines. “I think it will eventually play itself out in a case that will get to the Supreme Court,” he said.