In May 1986, state senator Jack Lindsay engineered an unnoticed amendment to a South Carolina budget bill. The amendment made legal the distribution of “property” but not “money” to anyone playing a commercially operated game of skill. By the time Lindsay died in January 1991 — while a focus of Operation Lost Trust, the massive FBI bribery investigation of the South Carolina legislature — the true significance of this maneuver was still unclear. But three months later, in April 1991, a man named Dick Harpootlian, lawyer for the state’s emerging industry of rinky-dink “video poker” parlors, finally let the cat out of the bag. Harpootlian somehow convinced the South Carolina Supreme Court that when his clients awarded free-game credits to winning poker-machine customers, they were distributing only “property” under the governing Lindsay amendment, not “money.” Even though the credits were redeemable for cash. Lots of cash.
Just like that, without debate or formal design, South Carolina effectively legalized gambling. Other states have succumbed in much the same fashion. Indeed, the mute passivity with which dozens of state governments have surrendered their restrictions against betting — and thus invited a nationwide explosion of gambling — is among the signal features of recent American social and political history. But in the process of welcoming the bookie into semi-respectability, few states have so corrupted themselves as did South Carolina in the 1990s.
By the middle of the decade, South Carolina’s video poker barons had grown sufficiently rich and powerful to evade even those modest and belated regulatory controls the legislature attempted to impose on them. Poker parlors paid no taxes and convicted felons were allowed to own them. The owners ignored a ban on advertising. They let children play the machines. When a law was passed limiting those machines to five per retail establishment, the owners simply partitioned their properties into walled rabbit warrens — and incorporated each resulting five-machine closet as a “separate” business. When a law was passed capping daily payouts at $ 125 per machine, the owners simply winked; you could still win vastly more than that on a given machine, but they made you collect the booty in $ 125 installments.
And when, in January 1998, incumbent Republican governor David Beasley rather bravely declared video poker a “cancer” and proposed to outlaw it, the state’s gambling interests simply bought themselves a new governor. There’s no other way to describe it. Poker consiglieri Dick Harpootlian had by then been installed as chairman of the state Democratic party. Democratic gubernatorial nominee Jim Hodges, who had earlier crusaded against the poker parlors, was quickly persuaded to reverse himself. He promised to allow a statewide referendum on whether video machines should become a taxed and regulated permanent industry. The choice was clear. Poker businesses spent a phenomenal $ 3 million on the November 1998 election. Beasley lost.
So as 1999 began, gambling was far and away the most powerful political force in South Carolina, and South Carolina was far and away the most gambling-saturated state in the Union. Video poker machines were in operation at fully a quarter of the state’s retail businesses — 7,000 mini-casinos in all — and were generating tax-free betting revenues of nearly $ 3 billion a year. How is it, then, that the entire industry has since been consigned to outright extinction? The story is very complicated, but the best short answer appears to be: Awakened by the shock of a statewide election unmistakably mortgaged to professional bookies, South Carolinians finally this year recoiled from the sleaze and pathology of their own video-poker addiction.
Notwithstanding the wealth and insider influence of the video-machine magnates, Governor Hodges’s poker referendum proved much less popular than anyone anticipated and seemed headed for defeat at the ballot box two weeks ago. As it happened, that ballot wasn’t held at all. In mid-October, the South Carolina Supreme Court invalidated the referendum as technically unconstitutional, the practical effect of which ruling will be to abolish video poker throughout the state, beginning next July — unless a new law is enacted specifically reauthorizing the industry. And nobody expects that to happen. Finger to the wind, Governor Hodges has abandoned his poker patrons just as abruptly as he once embraced them. “We will move on and talk about other important issues on the agenda in South Carolina,” he now announces.
Which most definitely does not mean, however, that South Carolina’s gambling adventure has ended. The new agenda Hodges has in mind is his plan fully to resuscitate statewide gambling, with the government itself as proprietor and croupier, through a public lottery modeled on neighboring Georgia’s much-hyped “HOPE scholarship” program. To the average South Carolina gambling junkie, Hodges’s proposed lottery would no doubt feel very much like the current electronic poker racket; Georgia’s HOPE scheme broadcasts high-stakes video keno games every five minutes, 18 hours a day, 365 days a year. But the proceeds of such a lottery would ostensibly be devoted to an unimpeachable goal: improved public schools.
So the smart money in South Carolina has it that this time next year, Hodges will succeed. For who could object to a nice, clean, voluntary game of chance that profits not some strip-mall shyster but . . . “our kids?” Only the “religious right,” that’s who: people eager to inflict their “narrow private moral views” on the “larger sensible majority.” By themselves, according to received wisdom, these religious right types won’t be able to block a South Carolina “education lottery” referendum in the year 2000. Because there just aren’t enough of them.
And maybe there aren’t. But maybe — if recent developments in Alabama are any indication — it won’t matter.
Alabama last month resolved a lottery proposal of its own under circumstances strikingly similar to those in South Carolina. In the 1998 election, a Democratic challenger, Don Siegelman, ran against Alabama’s incumbent Republican governor, Fob James. Siegelman endorsed a new form of gambling for the state: an “education lottery,” again modeled on the Georgia HOPE program. James opposed the lottery. But Siegelman won. And Siegelman then spent most of his first year in office stumping to get the lottery approved — in a referendum scheduled for October 12. His allies accumulated a fortune of money for the campaign, largely from businesses with state contracts. And they loudly advertised their plan as if it were self-evidently virtuous. People resisting his “lottery for the schools,” Siegelman insisted, “ought to be ashamed of themselves.”
Yes, well. Those resistants were slow to organize. They didn’t start an earnest funding drive until late August, and they were never anything but heavily outgunned. But in six short weeks, Alabama lottery opponents did manage to fashion a serious debate on the issue. They did so by raising insistent questions. What’s so great about the Georgia HOPE program, anyway? Isn’t it simply a regressive transfer of money from relatively poor lottery players to middle-class (and academically marginal) college students? Why should an independent, unaccountable “Alabama Education Lottery Corporation” — in a state famous for political corruption — be trusted with hundreds of millions of dollars in public revenues each year? And, above all else, what legitimate business can a state government possibly have in promoting a get-rich-quick sucker scheme to its citizens?
Don Siegelman could not answer these questions. A majority of Alabama voters rejected his lottery.
Were those voters, as they have been widely described in national news accounts, dominated by members of the moralizing, Republican-leaning religious right? Actually, no, they weren’t. Alabama’s anti-lottery drive was led by a businessman. One of its principal advocates was attorney Lenora Pate, Siegelman’s liberal opponent in the 1998 Democratic gubernatorial primary. At the grass-roots level, Alabama’s anti-lottery movement was spearheaded by a remarkable alliance of black and white church congregations, to be sure — but there was nothing particularly “religious right” about them. Alabama’s Christian Coalition affiliate did not distribute voter guides to the lottery referendum. And Alabama’s Republican party did not spend a dime of its treasury in the controversy.
It turns out voters needn’t share the “private moral views” of a religious conservative before they will reject the public morality of state-sanctioned gambling. It turns out they need only be asked to think about and directly act on the matter.
That’s the good news. The bad news is that some form of gambling is already legal in 48 of the 50 states, 37 of which explicitly encourage the vice through their public lotteries. Americans have an awesome amount of thinking and acting left to do before our runaway betting habit can be conquered.
David Tell, for the Editors
