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South Carolina Bans Sweepstakes Cafes, Video Poker 2.0

By Corey Hutchins
Wednesday, March 27, 2013 |
Almost 15 years after the state Supreme Court thought it had abolished video poker from South Carolina’s strip malls, gas stations and smoky backrooms, lawmakers think they’ve got it this time.

On March 22, Republican Gov. Nikki Haley signed a bill that critics of video gambling believe clears up any ambiguity about how the law applies to sweepstakes machines, phone-time machines and other devices known as video poker 2.0.

In 1999, the state Supreme Court outlawed video poker machines. In recent years, though, they’ve come back in a new incarnation as sweepstakes machines, or phone-card machines, and with the help of well-connected public officials, lobbyists, lawyers and the state’s ex-top cop. Critics say video poker wreaked havoc on communities and corrupted state government; proponents say the government shouldn’t have a monopoly on gambling with the state lottery, and it’s not the government’s job to protect people from themselves. Video poker supporters have also likened sweepstakes machines to the Monopoly game at McDonald’s.

Because state law wasn’t clear, local magistrates in different counties have ruled differently on individual machines. It’s up to a local magistrate to determine whether they’re illegal. Some rule they’re legal; others rule they aren’t. State Law Enforcement Division Chief Mark Keel says they’re illegal, as does the S.C. Sheriffs Association and the state attorney general’s office.

But Pickens Republican Sen. Larry Martin, a sponsor of the legislation, says the new law clears that up.

“We asked law enforcement and the attorney general’s office to provide for us what they needed to clear up any ambiguity in the existing law regarding these sweepstakes machines,” Martin says. “We believe they’re illegal. SLED is seizing them every day under the existing law, but this was an added protection in an effort to keep these folks from suing their way back into existence as they did the first time back in the late ‘80s and early ‘90s.”

As the new law worked its way through the General Assembly, some local sheriffs — most notably Richland County’s Leon Lott — put the word out that his deputies would be raiding sweepstakes cafes and seizing illegal video poker machines.

Controversy over the resurgence of video gambling in South Carolina boiled over last summer when state law enforcement began investigating the ties of Lexington County politicians to a video gambling underworld. Lexington Town Councilman Danny Frazier had been caught on audio recordings explaining how video gambling machine operators were able to run their businesses under the cover of friendly local law enforcement and politicians.

State law enforcement has remained tight-lipped about any investigation in Lexington. In late January, SLED Chief Mark Keel testified in favor of the new law in a public hearing. During his testimony he said SLED had investigated allegations that “officers had been paid” to take machines before magistrates. He declined to comment about what he meant by “officers,” and declined to comment on whether such investigations are ongoing.

Video gambling is a hot topic in the Southeast right now. The sweepstakes industry is pushing for legitimacy in North Carolina. And on March 12, authorities arrested nine people on racketeering charges tied to a multi-state video gambling ring they said was masked as a Florida-based charity called Allied Veterans of the World. Florida’s Republican Lt. Gov. Jennifer Carroll, who consulted for the entity, resigned when news broke of the scandal, though she said she’d done nothing improper. She had once tried to pass legislation related to gaming cafes as a lawmaker, according to ABC News.

More arrests in that investigation are expected in South Carolina, according to SLED. That multi-state gambling probe isn’t related to anything going on in Lexington, SLED spokesman Thom Berry said.

About the new state law clearing up loopholes in video gambling legislation, Palmetto Family Council director Oran Smith says he believes it will stick and will allow law enforcement to enforce existing law, according to conversations he’s had with the attorney general’s office.

The Palmetto Family Council, a socially conservative advocacy group, early days were spent fighting the original video poker back in the 1990s because it felt with 33,000 machines — essentially one per every square mile in the state — there was more access to gambling here than there was anywhere else in the country. Smith called it the crack-cocaine of gambling.

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