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Hitting the jackpot

National | Gambling forces found their lucky number in South Carolina and look to replicate their political success

Issue: "Justice to the Chief," Jan. 23, 1999

On Jan. 13, Jim Hodges stood on the steps of the South Carolina capitol to take his oath of office as governor. He basked not only in the glow of the newly polished copper dome, but in the adulation of a new rejuvenated Democratic Party. After 12 years of Republican control, the little-known state legislator had overcome a huge deficit in the polls to unseat David Beasley, the telegenic young governor with strong ties to Christian conservatives.

The 143-year-old blue granite capitol building still flies the Confederate flag and memorializes the six spots where Gen. Sherman's Union cannonballs struck. This scene was a fitting symbol for state Democrats who in 1997 were all but broke in both money and morale.

That all began to change a little more than a year ago when Mr. Beasley took up a public fight to ban the state's booming video poker industry, calling it a "cancer that is destroying lives and families."

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The governor's death threat to the $2.3 billion-a-year industry roused operators and convenience store owners like one of Sherman's cannon blasts. With about 30,000 machines in operation-roughly one every square mile or one for every 100 residents-Mr. Beasley may have underestimated the number of people who profited in some way from gambling. They returned fire with unprecedented millions of dollars in contributions and advertising, churning out "Ban Beasley" bumper stickers and billboards and hammering the state's dismal education performance. Their campaign helped Democrats turn an undercurrent of discontent with Mr. Beasley's first term into a flood.

Mr. Hodges, a 41-year-old textile company lawyer and respected state legislator, exploited that discontent with the campaign slogan, "It's all about schools." He promised to make gambling work for the people of South Carolina by earmarking revenues to improve public education. But for many in the state, the campaign was all about power: the power of an industry that for two decades had resisted every regulation and won every major court battle-and now has elected its own governor.

Anti-gambling groups see the November elections in South Carolina and elsewhere as evidence of a new boldness by gambling interests to influence openly the political process with their cash and organized employees.

"We're seeing gambling interests throwing money and muscle in much greater force now, that five or 10 years ago would have been inconceivable," said Tom Grey, executive director of the National Coalition Against Legalized Gambling, as he attacked "the 800-pound gorilla that is now out of the cage and ... feeding on governors and state constitutions."

After years of blunting the industry's expansion plans, Mr. Grey saw gambling interests help beat governors in South Carolina and Alabama, and win issues in Missouri, Arizona, Wisconsin, and California. "The money just came out in droves."

He sees a growing acceptance of gambling now that 37 states have government-run lotteries and an increasing push toward more innovative forms like video gambling where revenues may be drying up.

In Kenosha, Wis., often cited as one of America's most livable cities, gambling interests spent $450,000 to win the right to put a casino in a failing dog track. Missouri casino operators spent roughly $10 million on a successful campaign to have the voters overturn a decision by the state supreme court limiting riverboat gambling. And in California, Native Americans and Las Vegas gambling interests spent more than $100 million in a battle over expanded gambling on Indian reservations.

Flush with cash, the gambling industry almost never has to take "no" for an answer. Gamblers in Illinois have spent huge sums to wear down opposition over the last six years, arguing that the state loses millions in revenue to dockside gambling in neighboring Indiana, Iowa, and Missouri. After years of resistance, a plan is now moving through the legislature that will bring riverboat casinos right to Chicago's doorstep.

Mr. Grey, a Methodist minister, says such wins occur when people become desensitized to the moral issues of gambling. "What gambling did is to repackage itself and call it 'gaming' or 'entertainment.' They packaged it as economic development and jobs. Then government saw it as a painless revenue stream that does not require raising taxes."

When gambling becomes purely an economic issue, opponents invariably lose. In South Carolina, video poker interests provided a steady flow of money and fundraisers that enabled Democrats to pounce on Mr. Beasley's miscues and pound his 30-point lead into an 8-point defeat.

"I'm telling you if Beasley had shut his mouth and went ahead and got elected, he could have changed South Carolina, molded it into any direction he wanted to. He could have been a stealth candidate. He didn't have to say 'I'm going to annihilate video poker,'" says Fred Collins, the state's largest video poker operator with more than 4,000 machines, and Mr. Beasley's most vocal opponent. "I'm not going to be run out of business by some boy-wonder governor."

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