Ala. gambling gives way to closed casinos, trial

May 22, 2011 - 11:00 AM

MONTGOMERY, Ala. (AP) — Casino developer Ronnie Gilley used to turn heads when he strolled through the Alabama Statehouse with country music stars like George Jones and Randy Owen at his side. Now, Gilley's Country Crossing casino is dark and he's headed to prison after he testifies against several influential figures in the state's short-lived casino boom.

At the Legislature, gambling proposals pushed by Gilley and others used to tie up debate for days. Now, many lawmakers who advocated gambling are gone — turned out by voters in a Republican wave that crested amid news of the gambling scandal — and no one mentions the issue any more.

During the investigation, three lawmakers wore wires and Gilley's phone was tapped.

"I don't think you are going to see an effort to expand gambling. If we had the old Senate, they would be screaming for it every day," said state Sen. Scott Beason, one of the legislators who aided the FBI and helped federal prosecutors secure guilty pleas from Gilley and two of his lobbyists.

They admitted offering legislators millions in campaign contributions and appearances by Gilley's celebrity friends in return for supporting pro-gambling legislation.

Their gambling proposal passed the Senate in late March 2010 and was headed to the House when the FBI summoned legislative leaders into a meeting and revealed the secret investigation.

"I was scared to death when they called me into the room. I knew I hadn't done anything wrong, so I can't imagine what it was like for the folks who were involved in it. It was a sad day for Alabama," said Republican Rep. Mike Hubbard, now speaker of House.

News of the investigation quickly killed the casino bill. State police raids and court rulings closed the two big casino resorts and more than 30 smaller operations across the state.

In October, FBI agents arrested Gilley, another casino owner, four legislators and several lobbyists for the two casino operators. The defendants were charged with buying and selling votes on the pro-gambling legislation. None of the entertainers involved in Gilley's project were accused of any wrongdoing.

Gilley and his two lobbyists have agreed to testify when Milton McGregor, once Alabama's largest casino owner, goes on trial June 6 with four present and former state senators and two of state's most influential lobbyists, who worked for McGregor.

Defense attorneys accuse the government of timing its actions to kill gambling legislation and influence state elections. Lawyers for McGregor say he's an honest businessman who tried to generate badly needed jobs and make legitimate campaign donations.

"He's a 71-year-old grandfather who's never been arrested for so much as jaywalking," attorney Joe Espy said.

Prosecutors say they have a strong case built on legislators wearing wires and on wiretaps on the phones of the casino developers while they were trying to pass legislation to protect their investments.

In one recorded call played in court, Gilley told McGregor, "We're going to pass it, whatever we have to do."

Gilley insisted for months he was innocent. But with no gambling revenue coming in to pay his investors, he pleaded guilty last month to bribing legislators for their votes. His plea deal calls for 21 to 27 years in prison, but that could be lessened by his trial testimony.

Gilley, 46, portrays himself as a politically naïve real estate developer who got caught up in dark side of Alabama politics.

"In my opinion it's a cesspool — a very contagious cesspool of corruption," he said during a court hearing.

Gilley, a perpetually upbeat promoter, describes his guilty plea as one of the best things that ever happened to him because it turned his life around. And he promotes his new role as key government witness as he once did his casino development.

"I'm going to tell the truth," he said. "I've been living a lie for far too long."

For about a decade, small electronic bingo gambling halls operated across Alabama amid legal questions. Each year, legislators pushed bills to safeguard the operations, but they lost every time.

The picture changed in 2009 when Gilley and McGregor opened Vegas-style gambling destinations with thousands of electronic bingo machines that sported flashing lights and graphics resembling slot machines. No table games were involved.

Gilley created Country Crossing in the southeast corner of the state, a made-from-scratch resort resembling a small town. Crowds flocked to Dothan to stay in an inn bearing George Jones' name. They ate in restaurants and bars named after Lorrie Morgan, Darryl Worley and John Anderson. Randy Owen, lead singer for Alabama, was supposed to have his name on the family entertainment center when it was finished.

Kid Rock, Taylor Swift, Alan Jackson, Brooks & Dunn and many others performed at Gilley's outdoor music festivals.

About 100 miles north along Interstate 85 between Montgomery and Atlanta, McGregor expanded his VictoryLand dog track to include more than 6,000 gambling machines, upscale restaurants and a gold-colored luxury hotel. McGregor's ads in the Atlanta market urged viewers to head to Shorter, Ala., where, "You can be a winner too."

Gilley and McGregor pushed a proposed constitutional amendment in 2009 and 2010 to protect their gambling destinations and allow more casinos in Alabama.

New state Sen. Bryan Taylor recalls fighting the bills in his previous role as the governor's policy director and trying to counter the attention Gilley got with his celebrity friends.

"Mr. Gilley knew he was gaining credibility by bringing these folks. Nobody here in the Legislature would think these people they respect and adore would align themselves with anything illegal, and Mr. Gilley knew that," Taylor said.

As the legislative battle developed, campaign money flowed.

Campaign finance reports show McGregor donated $1.94 million in last year's elections, while Gilley and others who worked for him contributed $824,000.

In November, however, Alabama voters went to the polls and ended 136 years of Democratic control in the Legislature. The gambling indictments, coupled with a scandal in Alabama's two-year college system that sent three lawmakers to prison, made voters seek change, Hubbard said.

The new Republican-controlled Legislature quickly passed tougher ethics and campaign finance laws making it easier to track campaign donations by gambling interests and limit the role of lobbyists.

"It was unfortunate that Alabama had gained a reputation of being a corrupt state because Alabama and Alabamians do not deserve that label," said Hubbard.

Democratic Sen. Roger Bedford, who sponsored the 2010 gambling legislation, hasn't tried to revive it.

"That issue is over as far as I'm concerned," he said.

The Alabama House's longest-serving member, Democrat Alvin Holmes, and other veteran lawmakers say the wires, the investigation and the indictments haven't affected how legislators deal with one another, except on one issue.

"People don't talk about gambling issues now, but people talk about everything else like they did before there were people wearing wires," Holmes said.

Holmes said the future of the gambling issue depends on the outcome of the June trial and whether voters began to see gambling revenue as a way to soften deep state budgets cuts.

"The gambling issue is a dead issue until after the trial," Holmes said. "If there are convictions, it will be dead for this four-year term. If there are no convictions, it will probably come back up."