Video Poker Folds in South Carolina

July 7, 2008 - 7:02 PM

This is the first of a three-part series on legalized gambling

Washington (CNSNews.com)
- When the final plug is pulled July 1 on the 34,000 video poker machines that have sprouted up across South Carolina like palmettos, the state will say goodbye to a $2 billion industry, but the social and economic problems associated with the devices were too costly, say many South Carolinians.

"Video poker machines are the crack cocaine of gambling," said South Carolina State Senator Robert W Hayes (R-York).

"I saw them as a cancer, primarily to poor people," said South Carolina State Sen. Greg Ryberg (R-Aiken)

Last October, the South Carolina Supreme Court upheld a vote by the legislature to end video gambling in the state by July 1. State law enforcement officials say businesses must have the machines turned off by midnight, and then have one week to get them out of South Carolina.

When the video poker machines are gone, it will mark the end of a 14-year era in South Carolina that began when then-Sen. Jack Lindsay (D-Marlboro) slipped a rider onto a budget bill, allowing the machines into the state.

Their numbers grew until South Carolina eventually had "more gambling machines than any state in the nation, including Nevada," said Richard S. Perry, the chief-of-staff to U.S. Rep. Lindsey Graham (R-SC). The state even had more video poker machines than palmettos, said Hayes.

In 1998, South Carolina incumbent Republican Gov. David Beasley ran for re-election, and lost, to Democrat Jim Hodges, who was heavily backed by the video gaming industry. Beasley campaigned strongly for the removal of the poker machines from the state.

"So as we look at the difficult issue of video poker, we are confronted with one simple question," said Beasley in his last state-of-the-State speech. "Does the face of video poker represent the goodness, decency and honor of a state that all of us know so well? The answer, my friends, is no, and I ask you to ban video poker from South Carolina forever."

Beasley's next line proved to be prophetic.

"With their unlimited resources for lobbying and advertising, the video poker industry is mounting an assault on the senses and sensibilities of the people of South Carolina," said Beasley.

"Video poker machines are the reason why the current governor is not a Republican," said Perry.

"No question about it," Ryberg agreed.

Hayes concurs that it was strictly the video poker industry's money that cost Beasley his job, despite the existence of a strong coalition of opponents to video poker in South Carolina. That coalition includes business groups, Democrats, Republicans, Catholics, Protestants, whites and blacks.

"It''s the most bi-partisan, bi-racial, bi-religious, bi-everything you ever saw," said Hayes.

The bi-partisan National Gambling Impact Study Commission recommended in its report to Congress last year "that convenience gambling, such as electronic devices in neighborhood outlets, provides fewer economic benefits and creates potentially greater social costs by making gambling more available and accessible."

The Commission further recommended "that states should not authorize any further convenience gambling operations and should cease and roll back existing operations."

Records show that the 34,000 video poker machines in South Carolina are spread between about 7,500 separate establishments - mostly bars, restaurants, gas stations and convenience stores.

Ryberg, a successful businessman as well as a state senator, said that at one time he owned 53 convenience stores across South Carolina, but declined to put video poker machines in them, which cost him millions of dollars in profits. He said he could have put up to five video poker machines in each store, which would have grossed about $100,000 per store. "You do the math," he said.

Although each machine brings in an average revenue of $20,000 per year and provides a nice profit to many small businesses, they have a negative effect on South Carolina as a whole, said a study done for the South Carolina Policy Council Educational Foundation by Dr. William Thompson of the University of Nevada, Las Vegas.

Among other things, the study estimates that "each problem gambler costs other South Carolinians $6,299 per year in debts, court costs, criminal actions, lost work hours and unemployment compensation."

In November, South Carolinians vote on whether to have a state-run lottery like neighboring Georgia.

Currently, 37 states and the District of Columbia have lotteries. Both Hayes and Ryberg admit that support for a lottery in South Carolina is stronger than for the video poker machines.

"The lottery is popular," said Hayes, who added that he, like Ryberg, is opposed to government run gambling enterprises.

"Why balance the budget on the backs of the poor?" asked Ryberg.

Part two will focus on lottery gambling

Jennifer Groover also contributed to this series