Scoppe: The danger of video gambling isn’t the gambling

Associate EditorAugust 8, 2012 

LIQUOR IS already legal, and the government gets its take, so why shouldn’t we legalize marijuana? And cocaine? After all, they’re no more subject to abuse; some would argue they’re less dangerous. Besides, you can’t stop people from using them, so we ought to legalize and tax them.

Substitute “lottery” for “liquor” and “video gambling” for “marijuana” and “cocaine,” and you have the favorite argument for looking the other way as so-called “sweepstakes” games sweep across our state. To borrow from one-time Texas gubernatorial candidate Clayton Williams, if exploitation is inevitable, relax and enjoy it. Or at least profit from it.

It makes a lot of sense. Until you take, oh, about three seconds to think about it. Then you see that the logic is deeply flawed.

Not the part about the lottery being gambling. Of course it is, and our state has no business running a gambling enterprise. If I had a magic wand, I’d shut down the ironically named “education” lottery, which doesn’t seem to have taught state officials anything as it turned our government into a bookie that profits from the desperation of the mathematically challenged and fueled the defund-education movement by giving people an excuse to pretend that we’re pouring gobs of free money into the public schools.

The logical flaw involves the notion that once we say yes to one vice, we ought to say yes to all of them. Just throw our hands up in despair. When someone mugs you and takes your keys, be sure to give him directions to your house.

Beyond that, though, video gambling isn’t simply more gambling. It’s worse gambling. Not just because its flashing lights and bells and instant-gratification payouts make it far more addictive than scratching off little cards or tuning in to a daily drawing in six hours. Not just because it’s so easy to blow your entire paycheck at a single sitting. Ignore all of the social costs — after all, we in South Carolina don’t believe we are our brothers’ keeper — and you’re left with the most dangerous aspect of video gambling: the way it corrupts our political system.

Don’t think for an instant that our state’s police and prosecutors have come together in opposition to the reemergence of video gambling because they’re morally opposed to gambling. The law enforcement community, which has more than enough to keep it busy with violent crimes, has launched a coordinated assault on video gambling because officials understand how quickly an unregulated, cash-only business can get out of control. They’ve seen it happen.

Video gambling was born of corruption. A powerful state senator, who would escape federal extortion charges only by dying before the indictments could be issued, slipped what he called a “technical” change into state law that legalized one of the most addictive forms of gambling on earth. Over the next decade, the rogue industry grew into one of the most potent political forces in our state by ignoring what meager laws we had and pumping hundreds of millions of dollars of its ill-gotten gains into political campaigns. At its heyday, it was admitting to revenue equal to half the state budget. It managed to take out a governor and nearly take over the Legislature.

But that was then. Video gambling 1.0. This is, as Charleston’s Post and Courier recently put it, 2.0. Nothing like that would ever happen again, you think.

Think again. It’s already happening.

We already knew about some of the re-emergent industry’s efforts to buy up the political establishment — putting former SLED Chief Reggie Lloyd, former Columbia Mayor Bob Coble and current Richland County Councilman Damon Jeter on the payroll. Those are just the ones we know about. Last week, in an article explaining how the industry’s growing web of political connections will make it difficult to tighten the state’s anti-gambling laws, The Free Times’ Corey Hutchins told us about Lexington Town Councilman Danny Frazier.

The article says that Mr. Frazier “is overseeing a network of sweepstakes cafes and back-room video poker parlors.” Mr. Frazier didn’t return my phone message, but he told Mr. Hutchins that he doesn’t make any money from video gambling, although he said he could help would-be operators get in touch with the right people. Which he appeared to be doing in a series of phone conversations that someone recorded and gave to the newspaper, and law enforcement. Mr. Frazier told Mr. Hutchins he didn’t recall making the most outrageous comments, but he didn’t deny the authenticity of the recordings.

The excerpts provide a fascinating look inside the “sweepstakes” industry, which has hired the likes of Mr. Lloyd and Mr. Coble to insist that it’s operating within the law. In them, Mr. Frazier tells potential business associates they need to get in the business now, before the Legislature acts to shut it down.

He describes how he set up limited-liability corporations to operate the gambling operations, saying “I can’t put it under my name” because of “the way it looks.”

He explains that sweepstakes operators don’t have to worry about law enforcement in Lexington County because he helped get the South Congaree police chief and some magistrates their jobs.

He displays the sort of bare-knuckles bravado that we’ve come to associate with higher-profile Lexington County friends of video gambling, at one point issuing what Mr. Hutchins describes as something of a warning to public officials such as magistrates about trying to get out: “‘Let me tell you something. If you’re going to play the game you got to play the game all the way through,’ he says. ‘You can’t get there and then say, “Well, I’m here now, I want to play Mr. Goody-Goody. It don’t work that way.’”

He advises a would-be operator to put the machines in the back room of a business, behind a sign that says “Employees Only,” and to keep the place clean and provide black lights, beverages and snacks — so the players will feel like they’re in Vegas. But don’t try to put them in upper-class neighborhoods. “You’ll get complaints in the rich neighborhoods,” he says. “The lower and middle? They love it. They’ll spend their whole f#!king paycheck.”

So far, the Lexington Town Council hasn’t waded into the video gambling debate. But if it does, Mr. Frazier has a ready argument for rolling out the red carpet. He told Mr. Hutchins it wasn’t fair for the state to have a monopoly on gambling. “‘People are going to gamble no matter what,’ Frazier says. ‘Why don’t you tax it and take advantage of it?’”

But then, you knew he was going to say that, didn’t you?

Ms. Scoppe can be reached at cscoppe@thestate.com or at (803) 771-8571.

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