Sheriff’s office struggles with gambling problem

by Amy Kingsley

The three refrigerator-sized video poker machines wedged into the eastern wing at G&S Food Mart on Lawndale Drive in Greensboro always attract a capacity crowd. On a recent Wednesday night two women and a man huddled over their respective screens, dropping quarters into the slots with clockwork regularity.

Rules for playing the games are taped to one machine’s wood paneling: no cash prizes and no drinking, as well as limits on the number of times you can play. The sheet is tattered. Above each screen sheriff’s deputies have affixed serial numbers and a star signaling their approval.

Video poker is big business, raking in millions of dollars statewide every year. People in the industry have organized political action committees and donated out of their own pockets to lobby for the preservation of their embattled business. Their efforts have even extended to the local arena, where they have made campaign donations and gained the ear of Guilford County Sheriff BJ Barnes.

Scrutiny of campaign donations by the video poker industry has focused on the speaker of the house in the NC General Assembly, Mecklenburg County Democrat Jim Black. Members of the video poker industry have doled out contributions to other state legislators as well.

Although he doesn’t make the law, Barnes enforces it and he has recently benefited from the video poker industry’s largesse. He is running for reelection this November and collected a $500 donation from Fred Ayers Jr., the CEO of local company Colonial Vending, in February. County sheriff’s offices and NC Alcohol Law Enforcement share the duty of regulating the state’s video poker industry. In 2002 Sheriff Barnes received a $1,000 campaign donation from the NC Amusement Machine Association, just three months before he joined the state’s other 99 sheriffs in signing a letter asking state legislators to outlaw video poker.

‘“What the letter said was that we wanted it outlawed unless the state was going to do more to help local sheriffs’ departments,’” Barnes said. ‘“What they were asking for is that they include a stipulation that certain monies be collected to fund efforts to regulate the business.’”

Those specifics were not included on the 2002 letter, a two-paragraph memo stating ‘“enactment of legislation to ban video gaming machines in North Carolina is a top priority for the North Carolina Sheriff’s Association.’”

The General Assembly did not pass legislation to ban video poker in 2002 or any of the years that followed. Several bills proposing such a change passed in the Senate but stalled in the House. Revelations that Black received illegal campaign contributions from the NC Amusement Machine Association have stoked speculation that the video poker lobby influenced the politician’s decision not to introduce the legislation.

Ayers contributed money to the NC Amusement Machine Association PAC as recently as October 2005 when he cut them a $1,000 check, according to NC Board of Elections records.

‘“I don’t know who I’ve got contributions from frankly,’” Barnes said. ‘“I appreciate all of them.’”

He said Ayers has been a respectable member of the community. In addition to supplying video poker machines, the company leases jukeboxes and other arcade games.

But some other members of the video poker industry have been less upstanding. Clarence Ray Jernigan closed the Randolph County headquarters of Heath Amusements after sheriff’s deputies and NC Alcohol Law Enforcement officers busted the company in a gambling sting in 2004. Former Guilford County Commissioner Trudy Wade, one of Barnes’ political allies, was briefly married to Jernigan in 2003. The marriage was annulled after two months.

Randolph County Sheriff Litchard Hurley prevailed in a civil suit against Jernigan and his partner Worth Heath alleging the two conspired in a countywide gambling ring. Their company provided machines rigged to award prizes in excess of $1,000, violating strict gambling laws that limit prizes to $10 or less in merchandise vouchers. Jernigan had donated to the NC Amusement Machine Association and was running as a Republican for a House seat before Hurley filed suit.

‘“We don’t have anything to my knowledge that [Jernigan’s] doing anything over here,’” Barnes said.

Records from the Guilford County Sheriff’s Department list several machines operated by Jernigan’s company, but the list is incomplete and out of date.

Enforcement has been a sore point for sheriffs’ departments and Alcohol Law Enforcement agents since a law regulating video poker was passed in 2000. It is also a concern for the NC Amusement Machine Association, according to spokesman Richard Frye.

The law was motivated by South Carolina’s decision to ban video poker, which forced North Carolina lawmakers to contemplate how to prevent the migration of those machines across the border, Frye said. Lawmakers drafted legislation requiring registration of machines, limiting business owners to a maximum of three and banning their presence within 300 feet of a church.

Unfortunately the law dumped this responsibility on local sheriffs’ departments without allocating any extra funding, Frye said.

‘“It turned into mass confusion,’” Frye said. ‘“Now no one can walk into any establishment in this state and tell you what is legal and illegal.’”

Frye said the unregistered machines from South Carolina cause 90 percent of complaints. He supports statewide registration and the imposition of an annual tax of $500 per machine.

The Guilford County Sheriff’s Department has two employees devoted to monitoring video poker machines in the city. Sgt. Gray Siler is the sole officer devoted to registering the machines and tracking their movement in and out of the county. An administrative assistant helps him keep track of paperwork.

‘“It’s very hard to keep track of because if they move them out of the county, they don’t have to tell us,’” Siler said. ‘“I was hoping it would go away with the lottery.’”

Last week the sheriff’s department estimated there are between 450 and 500 machines registered in Guilford County. In a 2001 report to the General Assembly, the NC Sheriff’s Association recommended four full-time deputies and one administrative assistant for counties with more than 400 or more machines.

Sheriff’s departments are solely responsible for registration, but share responsibility for enforcement with Alcohol Law Enforcement. Mike Yates, the director of the Greensboro office of Alcohol Law Enforcement, said his office received 21 complaints last year and five so far this year. Most come from disgruntled customers, he said. No violations were detected in any of the cases this year, Yates said.

Siler said the sheriff’s department receives complaints from spouses and family members of gambling addicts. The Guilford County Sheriff’s Office arrested eight people for operating illegal video poker machines in September 2003.

‘“It’s so hard to investigate these complaints,’” he said. ‘“If a stranger comes into one of these stores the people there are usually standoffish and suspicious.’”

When asked whether he thought most machines in Guilford County followed the law, Yates declined to comment.

‘“It’s been really tough for all the sheriff’s departments to keep track because there are so many machines,’” Yates said.

When the General Assembly convenes the last week of May, legislation to ban video poker is likely to surface again, Frye said. The NC Amusement Machine Association has already conducted a study attributing $11.1 million in taxes and 2,400 jobs to the video poker industry. He said the association has not made illegal campaign contributions and plans to fight a ban if one is passed.

Although some political observers predicted the lottery would finally kill video poker in North Carolina, Frye said collaboration with the education lottery is a logical step for the state to take to increase revenues. If the Lottery Commission takes 20 percent of video poker profits, both the schools and video poker vendors would benefit, he said. But before that happens law enforcement agencies need to find a way to weed out illegal machines. Then the association might consider lobbying for changes to allow cash payouts, he continued.

For his part, Sheriff Barnes said he has the same opinion of the industry he had in 2002: Either tax video poker vendors to fund enforcement or ban the games altogether.

‘“If you’ve done your research you’ll also see that we’ve arrested people and confiscated machines,’” Barnes said. ‘“ A campaign donation doesn’t mean he’ll be treated any differently. I kind of go along with the Ronald Reagan philosophy: a campaign donation says that they go along with my line of thinking, not that I go along with theirs.’”

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