Video poker: Big and complicated

February 07,2005
Kadi Hodges
Times-News

David is the kind of guy who gets illegal video poker operators turned in.

Around 1990, the Charlotte man played his first hand of video poker. He had beginner's luck.

"It turns out that for me, the worst thing that could happen is the big win," he said.

For nine years he chased the payoff, looking for the hot machine and a return to the initial thrill.

"You start winning, and then you start losing, and then you start chasing and then you start desperation," said David - who asked that his real name not be used.

During his gambling years, David spent between five and 24 hours every day in front of the screen.

He remembers driving to gamble with an empty gas tank. Unwilling to spend his video poker money for fuel, he would run out of gas on the way home.

Although David does not offer a dollar figure on how much he spent on video poker, he says, "What I ended up gambling before I stopped was everything I had, everything I could get, legal or illegal."

David hid his gambling from his wife by managing their finances himself. Because he was self-employed, he was able to slip away from work to gamble.

The accumulated stress of the addiction led David to his "rock bottom," and he gave up video poker - sometimes called "video crack" - after nine years.

David now attends four or five Gamblers Anonymous meetings weekly. He hasn't played video poker since 1999.

Sheriff's departments frequently are tipped off to illegal video poker operations when family members report that someone like David has spent his entire paycheck on a video poker machine.

The machines are legal. The problem is, they aren't used in legal ways, especially where payoffs are concerned.

"If the machine pays off in cash in any way, form, or fashion, it's illegal on its face," said Mike Robertson, director of the state's Division of Alcohol Law Enforcement.

Owners of machines who make illegal payoffs - sometimes in thousands of dollars - have had their machines seized throughout the state.

"It's much greater than people would ever even care to acknowledge," said Randy Jones, spokesman for the Alamance County Sheriff's Department.

The ALE has made 179 arrests for gambling violations in recent months, and all were related to video gaming.

Local law enforcement agencies do not report how many illegal machines they have seized in addition to the state busts.

A bust in Guilford County in September 2003 led to eight arrests, including one former police chief, Gibsonville's Robert Tickle.

Tickle, who retired from the town's police force in 1991 after 15 years as chief, has been charged with two misdemeanor gambling violations and two misdemeanor video game machine violations.

Officers who conducted the investigation say Tickle handed out cash prizes to undercover agents at an establishment known as "The Hill."

The 68-year-old man, who spent his entire career in law enforcement, is scheduled to appear in court in March.

There are quite a few registered video poker machines in Lenoir County, Sheriff W.E. "Bill" Smith said. Many times complaints are made about larger payoffs than the legal payoff of $10.

"I had one person complain to me that the machines wouldn't pay him off more than $10, and that he always won more than that from the machines in the county where he lives," Smith said. "I told him he should go back and play the machines in his own county because in Lenoir County the payoffs are not to be more than $10."

Smith added that it is difficult to monitor all of the county's registered video poker machines. His officers make spot checks, he said, but unless the illegal payoffs are observed it is difficult to prosecute anyone for gambling violations.

Video all the rage

Video gaming machines, which can play a variety of video games including poker, bingo, craps, keno, lotto, eight liner or pot-of-gold, dot the state's highways, country markets, bars and convenience stores.

According to the most recent report to the General Assembly, just over 10,000 video poker machines are legally registered statewide.

George W. Trent Jr. of Trent Brothers Music Company says video poker is a legitimate enterprise that provides jobs, and that the "bad eggs" and bad press sensationalize the problems within the industry.

Trent's father and uncle founded the company 77 years ago. It provides coin-operated machines including jukeboxes, pool tables, arcade games and video poker.

"The biggest problem from our perspective is the illegal unregistered games," Trent said.

Trent Brothers distributes machines to restaurants, convenience stores, garages and other retailers. He says his machines are always operated within the boundaries of the law, as are others that he sees in his base in Rockingham County.

"If I see an illegal game in the county, I will report it," Trent said.

Trent supports an initiative by the North Carolina Amusement Machine Association to move machine registration to a central database within the Division of Alcohol Law Enforcement and provide sheriff's departments with $1,000 per machine. He says those changes would make it easier for law enforcement to get rid of illegal machines and would supply money for enforcement.

Trent said legitimate video poker operators are overwhelmed by the paperwork needed to stay legal.

He does not think removing video poker machines would change gambling addictions. He noted that video poker is available on the Internet 24 hours a day and has no money limit.

Eliminating video poker would put people out of jobs, according to Trent. Video poker revenue provides salaries.

BEYOND INDIVIDUAL gamblers, bigger players in the video poker industry have been implicated in more serious crimes.

Owners and operators of illegal machines can be charged with possession of unregistered machines, making unlawful payoffs, or failure to register a machine. All are misdemeanors.

For the past five years the FBI has conducted an investigation called Operation Double Black Diamond that has examined illegal activity in the industry throughout the state. Illegal operators can be charged with federal offenses based on the size, duration, and revenue of the business.

In September, the U.S. Attorney's office announced guilty pleas were entered for two Johnston County men who had structured bank deposits from their illegal video poker business to evade IRS requirements.

David R. "Ricky" Godwin, 57, of Kenly, faces a maximum sentence of 15 years in prison and $750,000 in fines. His son David "Ricky" Godwin Jr., 33, faces a maximum sentence of five years in prison and a $250,000 fine.

Others convicted as part of the same operation include former state transportation secretary Garland Garrett and the Wilmington Elks Lodge #532.

The Elks Lodge pleaded guilty to conspiring to conduct an illegal gambling business by paying cash prizes from machines.

The Elks Lodge split profits with Garrett's business, the Cape Fear Music Company, which owned the machines.

The forfeitures from all federal convictions have totaled $7.25 million.

In June 2004, Democracy North Carolina, a watchdog group that studies the electoral process, filed a complaint with the state's board of elections asking the board to study political contributions from members of the video poker industry to the state's legislators.

Democracy N.C. alleged that "certain campaign contributions related to the video-poker industry Â… appear to involve political corruption, money laundering, and a possible conspiracy by members of the industry to violate campaign-finance statutes."

The complaint describes an industry that donated $800,000 to political campaigns in the 2000 and 2002 election cycles. The money came from individual contributions and lobbying efforts and was spread among candidates for the Republican and Democrat parties. It notes that a political action committee created by the N.C. Amusement Machine Association in 2000 managed to spend $369,633 in lobbying and legislative services between 2001 and 2003.

Bob Hall, co-director for research at Democracy North Carolina and author of the agency's complaint, called the industry "a corrupting influence in North Carolina politics."

"They are an industry that is very sensitive about their legal status because they are on the edge of the law," Hall said. "They feel beleaguered and under attack."

Kadi Hodges can be reached at

mailto:kadi_hodges@link.freedom.com

Although video poker is legal in North Carolina, it is restricted:

n An establishment is only permitted to have three machines.

n The games must require some degree of skill.

n All machines must be in plain view.

n The machines must be registered with the county's sheriff.

n The maximum payoff for a win is $10 worth of merchandise.