Proposed lottery expansion

North Carolina seeks to regulate video gambling machines via the state lottery

Bill sponsor Representative Harry Warren estimated that the number of legal video lottery machines envisioned by the bill could be 70% fewer than the number of machines that are now operating in the state illegally. 
2021-09-01
Reading time 2:47 min
The House Commerce Committee passed a bill Tuesday, which will now go to the House Finance Committee. It intends to tackle the current illegal market authorizing video lottery terminals and directing the lottery commission to allow bars, restaurants and convenience stores to install up to 10 machines. Manufacturers and owners would have to be licensed, and retailers would contract with owners to set up machines.

Legalization of video gambling machines through the state lottery is a step closer to a final verdict as North Carolina lawmakers advanced a late session effort Tuesday, with supporters saying it is time to regulate them, as attempts to dismantle shadowy machine parlors often fail. 

The bill, which cleared the House Commerce Committee, aims to authorize video lottery terminals and direct the state lottery commission to allow bars, restaurants and convenience stores to install up to 10 machines.

Patrons would be able to play games of chance and redeem winnings for cash. Machine manufacturers and owners would have to be licensed, and retailers would contract with owners to set up machines. Criminal checks would be required of license applicants. 

During the session, bill supporters claimed that the proposed lottery expansion is “the way” for the state to root out illegal video gambling activity, as police and prosecutors have gone after “unlawful video gambling and sweepstakes machines” for years. 

“We pass a law; they change the game. They dance around; we pass another law. They do the same," said Representative Harry Warren, a Rowan County Republican and bill sponsor. “This bill is not just an off-the-cuff ‘let’s go and make them all legal.’ That’s exactly the opposite of what we’re trying to do”, 

Warren estimated that the number of legal video lottery machines envisioned by the bill could be 70% fewer than the number of machines that are now operating in the state illegally. 

Committee members, who passed the bill on a voice vote, said little about authorizing the machines, but rather centered their questions about specifics on how portions of the state’s share of profits would be distributed.

Each of the state’s five public historically Black colleges would receive $2 million annually, while a new forgivable loan program for community college students would be funded. Otherwise, machine operators would receive 35% of terminal revenues while 25% would go to retailers.

Bill sponsors said they “have put a lot of emphasis” on building confidence in machine operations. The commission would contract for a central monitoring system to link the terminals, each of which would have a permit affixed to the machine and be subject to inspection by the commission or the state Division of Alcohol Law Enforcement. Those machines that do not have permits would be considered unlawful.

According to the La Crosse Tribune, John Rustin, president of the North Carolina Family Policy Council, called the machines the “crack cocaine of gambling” for their addictive nature, taking money from people who can least afford to lose it. 

“This bill doesn’t eliminate the machines that are already there. It just adds a large number of additional machines to continue to prey on our citizens,” said Eddie Caldwell with the North Carolina Sheriffs' Association, which also opposes the measure. The players, Caldwell added, “are not high-roller folks that can afford to go to Vegas, but these are folks that are betting their rent money and their grocery money.”

“What we’re trying to do in this legislation is to get rid of the unsavory characters that are out there who are operating now and would not meet the qualifications,” Warren said.

The bill, which next goes to the House Finance Committee, advanced in what appear to be the final weeks of this year's session. Representative Tim Moffitt, a Henderson County Republican and another bill sponsor, said after Tuesday's vote that he was optimistic about a bill passing the full House but was less certain about prospects in the Senate.

“The reality that’s before us is do we regulate video gambling or do we not regulate,” he told colleagues. “It’s apparent that we can’t stop it.”

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