Gambling schemes pushed to aid S.C. economy

South Carolina is being targeted by a wave of gaming proposals pushed by powerful lobbyists who say gambling would bring hundreds of millions of dollars in investment to economically deprived areas and millions into the state’s recession-depleted tax coffers.

Native American casinos have been proposed for the Piedmont and the Lowcountry. Meanwhile, new sweepstakes machines are in action in convenience stores statewide and casino-style Internet cafes are operating in Charleston.

A decade-long fight to ban the $3 billion-a-year video poker industry in 2000 left lawmakers with little interest in allowing new forms of gaming into the state. “A lot of people are afraid to open that Pandora’s box again and see what else will come out with it,” said state Rep. Rick Quinn, R-Lexington.

As a result, the gaming interests are engaging lawyers to fight in the courts and lobbyists to make their case before Gov. Nikki Haley and the federal government.

Cherokee casino

The proposal with the most steam behind it would open a Cherokee-owned casino and resort on 50 acres in Hardeeville.

Proponents say the project, which already has gained initial support from some local government officials, could be under construction in two years and bring nearly 5,000 jobs and $92 million in wages and benefits for Jasper County. They also say the state would profit from a yet-to-be-determined portion of the casino’s revenues.

Backers estimate more than 4.3 million visitors a year would frequent the casino along the Savannah River and the Georgia-South Carolina border.

And lawmakers would have no say.

Project backers only must win approval from Haley, who has made job creation and economic development her administration’s highest priority. With a nod from Haley, the project’s fate would be decided by the federal Bureau of Indian Affairs.

Backers hope to bring a formal proposal to Haley by the end of 2012.

However, Haley “has no intention of taking any action that would enable casino gambling,” her spokesman said in a statement Friday.

“Gov. Haley desperately wants to bring jobs to South Carolina,” said Rob Godfrey. “However, she believes South Carolina does not have to settle and that there is a better way. ... Governor Haley does not support sweepstakes machines or anything that further opens the door to gambling.”

But Bob McAlister, former chief of staff to then-Gov. Carroll Campbell and a public relations-political consultant who has been hired to market the project, is undeterred by that brushback.

McAlister says it is too soon to say what Haley will do. He anticipates Haley will hear plenty from Lowcountry leaders, business owners and residents, pleading for the economic benefits the casino project promises.

“I know she and (state Commerce Secretary) Bobby Hitt are putting more emphasis on creating jobs than any other governor since Carroll Campbell,” McAlister said. “This is the chance. This is the project — the only one in the foreseeable future — to help a part of the state that is struggling.”

Big players, big lawsuit

McAlister is just one of a growing cast of high-profile players working for gambling interests.

Dwight Drake, a Columbia attorney, lobbyist and unsuccessful candidate in the 2010 Democratic gubernatorial primary, also is working for the Hardeeville casino proposal, the brainchild of the Cherokees, and developers and investors in Myrtle Beach and Dallas.

Other big names — including Columbia political strategist Richard Quinn, father of state Rep. Quinn — are rallying support for a Rock Hill casino proposal by the Catawba Indian Nation, the state’s only federally recognized Native American tribe. In January, the Catawbas filed a lawsuit arguing they should be allowed to offer gambling on their York County reservation just as the state allows casino cruise ships to operate off its coast.

Quinn is conducting polling for the Catawbas to gauge public opinion on their proposal to build a gaming facility and two hotels on their reservation.

“The public’s attitude toward gaming has changed since (David) Beasley was governor” and video poker was outlawed in 2000, Quinn said. “People are looking for economic development. We live in a state that has one of the highest unemployment rates in the nation.

“It may not be the economic development that some people would prefer, but it’s not like the plague of video poker — people bringing their change in to play instead of buying food for their children. What the Catawbas have proposed for York is an entirely different enterprise and something the state could be proud of.”

The Catawbas say their project would produce 4,000 permanent jobs and have an economic impact of $260 million a year in York County, reversing their tribe’s long struggle with poverty and joblessness.

But Sen. Wes Hayes, R-York, said his York County constituents oppose a casino — and he does, too. Hayes also worries a casino would attract an unsavory element to the community.

“There’s no groundswell of support for changing gaming laws and allowing casinos,” Hayes said. “If the people we serve were demanding changes in the gambling laws, then you would see us working to change them. Nobody is pushing me, and I’ve heard from a lot of people who don’t think it’s a good idea.”

Instead, Hayes says the Catawba proposal “is just another effort to get out of the (tribe’s) agreement with the state.”

The Catawbas have struggled for years in S.C. courts and at the State House to get out from under parts of their 1993 agreement with the state. That agreement granted the tribe land in York County, $50 million and its rights as a tribal nation. But it also said the only gambling the tribe could sponsor was bingo in York County and one other site in the state.

“It’s recognized as one of the worst (agreements) of any tribe in the nation,” said Gregory Smith, the Catawbas’ Washington-based attorney. “It’s infamous in Indian policy circles, giving third-class rights to the Catawbas compared to the other tribes around the nation.”

But while the Catawbas contend the state’s subsequent entry into the lottery business killed their bingo business, state lawmakers and the courts have denied tribal efforts to renegotiate the agreement.

Sweepstakes or video poker?

The maneuvering for Indian casinos is just one way gaming interests are attempting a comeback in South Carolina.

Since taking office this past summer, SLED Chief Mark Keel says he has been inundated with calls from business owners and law-enforcement officials questioning the legality of a new sweepstakes machines. The machines allow players to enter sweepstakes to win various products and also a chance to play poker, keno and bingo for cash payouts.

“They are illegal,” Keel said. “It’s the same thing as video poker.”

But magistrate and circuit court judges have issued varying opinions on the machines’ legality.

Reggie Lloyd, who as Keel’s predecessor as the head of the State Law Enforcement Division once was charged with confiscating illegal video poker machines, now represents several makers of these new sweepstakes machines.

“This genre of sweepstakes machines is similar to Readers Digest or McDonald’s or Coca-Cola or Mars candy bar games that exist on products already all over the state,” Lloyd said. “It’s like any other promotional games or sweepstakes-like games.”

Ultimately, the S.C. Supreme Court is expected to rule on the machines’ legality.

In the meantime, some lawmakers, worried about further proliferation of the machines, have introduced bills to shore up state law, clarifying that the machines popping up in convenience stores and bars around the state are illegal.

Work also is under way at the State House to outlaw casino-style Internet cafes, where players can sit playing electronic poker and other games of chance online for hours on end.

This story was originally published February 26, 2012 at 12:00 AM with the headline "Gambling schemes pushed to aid S.C. economy."