The state GOP supports sweepstakes industry and empowers sleaze | Citizen | Indy Week
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The state GOP supports sweepstakes industry and empowers sleaze 

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Photo by Bob Geary

Are the Republicans in Raleigh trying to be the party of corruption? They complained about a "culture of corruption" when the Democrats were in charge. It must've been because the wrong party was on the receiving end.

Consider, for example, Thom Goolsby, just announced as the poster boy for legalizing sweepstakes gambling dens.

Sweepstakes gambling is video poker 2.0, a sleazy business that Republicans denounced when former House Speaker Jim Black, a Democrat who landed in prison, was protecting it in exchange for campaign cash.

And Goolsby? He was a Republican state senator until he resigned last August—the one who slammed Moral Mondays as "Moron Mondays."

Goolsby's own morality was on display when an investment business he ran in Wilmington was shut down for misleading clients. Empowered Investor lured customers with a trading scheme worthy of P.T. Barnum; when EI lost their money, they sued. Last May, the North Carolina secretary of state threw Goolsby out of the securities business for 10 years.

This was big news in Wilmington, where Goolsby was known for dispensing financial wisdom on his radio show. Disgraced, he didn't seek reelection.

Good riddance, right? Wrong. Last month, GOP senators appointed Goolsby to the University of North Carolina Board of Governors. Then last week, Goolsby stepped out from the shadows again, this time as pitchman—and lobbyist—for the new "N.C. Small Business Coalition." Its mission: legalize sweepstakes gambling.

"Small business owners who offer a sweepstakes promotion and are fully complying with North Carolina's electronic sweepstakes laws deserve the right to operate without state interference," Goolsby said.

In other words, sweepstakes gambling is perfectly legal, except that it needs legislation to make it legal.

State Rep. Harry Warren, R-Rowan, introduced Goolsby's bill Thursday. House Bill 938 should be called the Empowered Gamblers Act.

Empowered INDY readers will remember that the General Assembly, after Black's downfall, banned video poker machines and other electronic gambling. The N.C. Supreme Court upheld the ban in 2012.

But the industry, if you can call it that, wasn't finished.

For public consumption, the operators said they would "modify the software" and present only "sweepstakes" games not explicitly disallowed by the law. "Sweepstakes" in this context means ... well, not one thing. Behind the scenes, meanwhile, the gamesters made nice with newly elected Gov. Pat McCrory and GOP legislators who, in 2012, won huge majorities in the General Assembly.

For example: Chase Burns and his wife contributed $8,000 to McCrory's campaign and $235,000 to state GOP candidates, according to Democracy NC. Burns, whose Oklahoma firm provided software to gambling dens, soon pleaded guilty to corruption charges in Florida.

In North Carolina, though, stalemate ensued. Attorney General Roy Cooper maintains that the industry's "modified" software is the same old illegal gambling games in disguise—and is still illegal.

But Cooper, though he has lawyers, has zero police authority. At the state level, enforcing the gambling laws is the job of the Department of Public Safety, which reports to McCrory. Color it uninterested.

A few local police and sheriff's departments have brought charges against gambling dens, usually resulting in convictions. But when they do, the industry hits back with lawsuits charging that the cops misinterpreted the law. This discourages other police agencies from stepping in the mess.

On Friday, the N.C. Supreme Court left standing the convictions of two men who operated an electronic gambling den in Edgecombe County. Theirs were the first such convictions to reach the high court.

"Today's action by the Court makes it clear that North Carolina officers and prosecutors have authority to go after illegal gambling operations in their community," Cooper said.

They do—unless Goolsby can get his friends to change the law.

On Friday, I was in a storefront gambling den in Raleigh losing $13.

Here's what happened: I paid $20 to the cashier. This bought me 200 playing points on the computer terminal of my choice, plus 50 extra points—for luck?

I played a slot machine-style game, won a little, lost more, and in 15 minutes my playing points were gone—so I was finished. I did, however, receive $7 back for "prize" points I won.

How was this not gambling? In the industry's logic, it's because I could've used my points to log on to the Internet—though the cashier forgot to tell me that.

Having "purchased" Internet time, I was then "entered" into a drawing for a prize of up to $4,800, which I immediately lost, though I wasn't told this either.

Thus, I couldn't have been "gambling" because, before I "played," the software had determined whether I would win or lose.

By the way, these sleazy parlors are most often found in low-income neighborhoods. This one was in a dingy strip mall next to a check-cashing business and a Family Dollar store. The games are designed to prey on poor people, who lose more gambling in this fashion than if, say, they bought $20 worth of lottery tickets. And far more than if they could afford to travel to a real casino somewhere.

But the point is, they can't.

This article appeared in print with the headline "Empowering sleaze."

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