By M.H. Cavanaugh
Christian Action League
April 9, 2015
RALEIGH – Former NC. State Senator Thom Goolsby of New Hanover County is now a lobbyist representing the internet sweepstakes industry. Goolsby announced on Thursday he would serve as a spokesman and advocate for a newly formed organization, N.C. Small Business Coalition. The group plans to pressure North Carolina lawmakers to legalize, regulate and tax sweepstakes gambling.
Video Sweepstakes gambling was banned in the state in 2010. The measure HB 80 – Ban Electronic Sweepstakes received overwhelming support in the Senate by a margin of 47-1 and 86-27 in the House.
Video sweepstakes gaming parlors or cafes have computer terminals inside, where patrons pay money for chances to win a prize by playing a casino-style game, similar to a slot machine. Proponents of video sweepstakes say their business is not gaming, but more like the sweepstakes advertised by Coca-Cola or McDonald’s. Yet every appellate court deciding cases involving such games has found that it is gambling.
In a statement, Goolsby argues “the people of North Carolina are in need of more jobs and the state needs more tax revenue to fund education, law enforcement, healthcare and other critical functions.” He added North Carolina is already a gambling state with a state operated lottery and casinos with Las Vegas style gambling in two communities. Therefore, since the legislature already accepts lottery money and casino proceeds, “how could regulating and taxing sweepstakes cafes be anything, but a win?” he asks.
Researchers say that video gaming is more addictive than any other form of gambling. Scott Plakon, a Republican Florida state legislator who has fought to ban sweepstakes in his state, rightly referred to sweepstakes cafes as a predatory form of “convenience gambling” that hurts those who can least afford it. According to the Tampa Bay Times, “Plakon and other critics argue that the cafes are strip-mall casinos…targeted at senior citizens and the poor.”
North Carolina banned video poker gambling in 2006. The industry was rife with corruption despite the state’s attempts to hold it accountable and regulate it by limiting the number of machines and pay-outs. Sheriffs in every county in the state supported the ban.
In 2008, Buncombe County Sheriff Bobby Medford was sentenced to 15 years in prison for taking more than $300,000 in bribes from video poker operators during his 12 years as that county’s top lawman. Two of his former lieutenants and two captains were also convicted in the federal government’s investigation of video poker and its ties to public corruption.
Former N.C. Speaker of the House, Jim Black, who helped keep video poker alive by suppressing legislation to ban it was sentenced to 63 months in prison after investigations into his ties to the industry. Black received more than $200,000 in recorded campaign contributions from video poker operators and the NCAMA PAC during the 2000 to 2004 elections.
After video poker was banned, video sweepstakes gaming evolved to replace it in the state. Video gaming operators have been most adept in seeking to avoid bans by modifying their electronic games to exploit loopholes in the law. Nevertheless, the North Carolina Sheriff’s Association declared there was essentially no difference between video sweepstakes gaming and video poker. Eddie Caldwell, the North Carolina Sheriff’s Association’s executive vice president told the Virginia-Pilot in 2012, “It’s legalized stealing from people who don’t really know they’re being stolen from.”
Video sweepstakes owners mounted a legal challenge to the ban that passed in 2010, but the North Carolina Supreme Court upheld the ban in 2012. Despite the fact that North Carolina’s Attorney General, Roy Cooper, has demonstrably said video sweepstakes cafes are illegal and the law prohibiting it covers all its forms of gaming, some operators continue to defy the law, arguing they’ve developed software with games that don’t fall under its prohibition. The reluctance of local District Attorneys to prosecute where these sweepstakes cafes continue operating has frustrated efforts to completely eliminate their presence.
“I have profound respect for former Senator Thom Goolsby,” said Dr. Mark Creech, executive director of the Christian Action League. “Thom was the point man and worked closely with the Christian Action League in passing comprehensive legislation addressing the problem of human trafficking in our state. Still, I am genuinely saddened he has taken on this egregious cause, especially a man of his influence, and especially when we’ve nearly swept our state clean of these mini-type casinos that precipitated 9 out of 10 calls to the state’s Council on Problem Gambling hotline.”
“I find all this hoopla about creating jobs and increasing tax revenue from gambling the same malarkey we’ve always heard, but it never really works out as proponents claim,” said Dr. Creech. “In fact, gambling simply redistributes wealth, and it does so in a most inequitable way. It siphons money away from legitimate businesses that provide a useful or necessary product. That’s not good for business whether in the city or rural areas. What is more, it dislocates the purchasing dollar. Bad debts, delinquent time payments, and bankruptcies created by people addicted to gambling don’t enhance business but restrict it. And taxing gaming revenues defies every sound theory of taxation. Such revenues are regressive, variable, and unpredictable. Legalizing sweepstakes is an unsound policy for funding public services. It’s really foolish,” he added.
Goolsby said Rep. Harry Warren, a Salisbury Republican, will file legislation this session to legalize video sweepstakes gambling.
The Christian Action League urges its supporters to be ready to inform their lawmakers of their ardent opposition to any further expansions of gambling in North Carolina.