Busted Flush: S.C.'s video-poker operators run a political machine

in Harper's Magazine, August 1999 v299 i1791 p63
by David Plotz.
[ Full Text: COPYRIGHT 1999 Harper's Magazine Foundation]

"If you're not playing at Treasures, you're taking a chance," warns the billboard towering above Broad River Road on the outskirts of Columbia, South Carolina. I don't like to take chances, so I pull into the parking lot, beneath Treasures' glowing, glowering pirate sign, and find a space next to a black Mustang, license plate: HNG OVR.

Treasures is suburban-strip architecture as fun-house. The building, a low-slung, cheap-looking structure the size of a tennis court, is covered with mirrors from rooftop to asphalt. The walls are mirrors, the roof is mirrors, the doors are mirrored glass. It's as though the building is trying to pretend it doesn't exist. I enter through the mirrored doors and find myself in a fifteen-year-old boy's dream room: floor-to-ceiling mirrors, a carpet the color of dried blood, black lights, a choking fog of cigarette smoke, a plastic bowl filled with Tootsie Rolls, and all the gambling one's heart desires.

In any other spot on the planet Treasures would be called a casino, but because Treasures is in South Carolina, and because South Carolina likes to make believe it doesn't have legal gambling, Treasures goes by a cheerful euphemism: "video mall," or, if you prefer, "video parlor." Whatever you want to call it, it's a warren. I wander through a dozen "game rooms" sardined back-to-back off a central corridor. Each is a dark narrow cleft the size of a large closet, with just enough space for five stools, the five people perched on those stools, and the five machines those five people are glued to. The machines are "Pot-O-Golds," and they are video-gambling devices. South Carolina, naturally, prefers the euphemism "video games." The game rooms hold about sixty video-poker machines among them, even though South Carolina law states with blinding clarity that no business can have more man live machines. This is possible because Treasures is not one business but many: technically--and only technically--each closet is its own independent enterprise.

It's past eleven P.M. on a Thursday evening. Even so, every machine is occupied. About half the gamblers are elderly white women, about a third are young black women, and there's a smattering of young redneck men. The manufactured good cheer of Las Vegas is absent here. The gamblers gaze transfixed at their terminals and tap the touch screens with a kind of Stepford intensity. An eerie silence envelops the place: the only noises are the bells ringing on the Pot-O-Golds, signaling gamblers that someone else just won a few bucks, so you will too. I settle into the only empty stool I can find and watch the woman next to me. She is chain-smoking Vantages with her left hand and jabbing the screen rapidly with her right. She's playing Shamrock Sevens, a poker game that rewards a hand of three sevens with a din of electronic Irish music, a digital leprechaun who announces, "Aye, a pot o' gold for ye!" and a mingy bonus. She occasionally interrupts poking and puffing long enough to gulp down handfuls of Tootsie Rolls and Styrofoam cups of water. These are the only food and drink Treasures offers, unless you count breath mints as food. I intrude on her during one of these refueling breaks. Her name is Joyce, she tells me, and she's a grandmother in her fifties. She has been playing Shamrock Sevens on this Pot-O-Gold since four P.M., she thinks. Joyce is betting twenty-five cents a hand, six hands a minute, 360 hands an hour. If she is at the odds,(*) she has lost sixty dollars in her seven and a half hours of wagering.

Treasures is one of more than 7,000 places to gamble in South Carolina, which means that the Palmetto State--which you probably didn't even know had legal gambling--has more places to wager than any state, and about three times as many as Nevada. South Carolina has 36,000 gambling machines, more than any state but Nevada, New Jersey, and Mississippi--and nearly one device for every hundred residents. South Carolina offers gambling without rules: the state collects no taxes, imposes virtually no regulations, does not restrict who can own machines, does not require that the machines be honest, does not forbid children from playing them. South Carolina's video-poker millionaires call this "convenience gaming." (And indeed it must be convenient to gross $2.5 billion annually, net $728 million, pay no taxes, and have your profits climb 20 percent a year.) Gambling experts, on the other hand, call it the worst gambling industry in America, economically useless and socially devastating.

How South Carolina wound up in this mess is a cautionary tale about money and politics, but it's not one of the money-and-politics stories you've heard a thousand times before. It is not a story about how big businesses bent politicians to their will, or a story about how some megacorporation invaded South Carolina and corrupted it, or a story of how an industry lobbied and bribed politicians to lower burdensome taxes and abolish burdensome regulations. No, video poker's conquest of South Carolina is a tale of the sinister power of small business. It is a tale of how, in almost no time at all, a bunch of gas-station owners, jukebox operators, and barkeeps used lawsuits, strong-arm lobbying, dead-of-night legislation, and just plain deception to transform a small-time illegal gambling business into a multibillion-dollar legal one; how these folks fought to increase regulation and taxation; and how, in the process of all this, they resurrected the state Democratic Party, battered the state legislature, wiggled out of campaign-finance restrictions, made common cause with white supremacists, and, in a remarkable and demoralizing 1998 election, deposed one government and bought themselves a new one. And this, in the grandest euphemism of all, they call just politics.

Video poker is South Carolina's white noise, so pervasive that you stop noticing its ugliness. The first building outside the Columbia airport is a dingy warehouse, dressed up with eight video-poker machines, a fresh carpet, and a sign reading AIRPORT GAMES. Video-poker casinos form a stockade around the state. At the northeast tip the ramshackle fishing village of Little River now has sixteen video-poker casinos and a new nickname, "Little Reno." At the southern tip, the State Line Casino guards the Savannah River crossing from Georgia. (It was here, in the summer of 1997, that Army Sgt. Gall Baker left her ten-day-old baby, Joy, in the car while she went inside to play a few hands. When she exited the casino seven and a half hours later, Joy was dead of dehydration.) In the north the first exit off I-77, even before the state welcome center, delivers you to a strip of shabby double-wides and stucco prefabs, halfheartedly decorated with bunting and hopeful names: Golden Touch, Treasure Chest, Lady Luck, Slots of Fun (CHECK CASHING, CASH ADVANCES, CAR TITLE LOANS, says the sign above the door). Each one is a maze of snaking corridors, sardine closets, and countless Pot-O-Golds.

Some 339 cities and towns in South Carolina now have video-poker machines. Columbia, a city of barely 100,000, has 483 places to gamble and more than 2,000 machines. "There is not a place in South Carolina where there could be a machine and there isn't one," says Glenn Stanton, who runs the anti-gambling Palmetto Family Council. Vegas has The Strip. South Carolina has the gambling strip mall: Babylon in the shopping center. Almost any business with a steady flow of customers has a machine or two or five in the corner and a red neon GAMES sign in the window. L'il Cricket, a convenience-store chain, is among the state's biggest gambling companies. So is R. L. Jordan Oil, which owns gas stations. An astonishing one-quarter of South Carolina's retail businesses offer video poker. Sometimes it feels as if all of them do.

As an experiment, I try driving west out of Columbia on a rural road and stopping at every business I pass. The Locker Room, a down-at-the-heels pool club, has two machines at the back. The Hot Spot, the convenience store next door, owns five machines, a bettor parked at every one. Halt a mile up the road at Kelly's, you can buy pickled pigs' lips, then drop a few bucks in the five poker machines along the side wall. Judy's advertises BEER, POOL, GAMES. Club 76 Game Room is a cinderblock shack: its windows are boarded up, but it's open for gambling. At long last, I pass a building where I can't play video poker: the Prayer Bible Study Church.

How South Carolina got this way--a Pot-O-Gold on every corner, a gambler in every home--is a tale that best begins in a handsome office in downtown Columbia with a man known as "Lucifer." His real name is Dick Harpootlian, and he loves his nickname. He loves that the minions of David Beasley--that is, former Republican governor David Beasley, the man whom Harpootlian destroyed in 1998--coined the moniker. "Beasley is an opportunistic, insincere scalawag. An Elmer Gantry," says Harpootlian. "I think his Christianity is his business, but you know it would be very like them to somehow depict an enemy as being sponsored by or somehow inspired by the devil. As a practical matter, my ancestors were worshiping Christ while his people were scraping bark off a tree and worshiping it, okay? So why do they call me Satan or Lucifer? Because it's convenient for them to think of me as being sponsored by the forces of darkness, I suppose. That's how they have to convince themselves that they lost--rather than accepting the fact that they're full of shit and the people finally figured them out!"

Harpootlian unleashes this torrent with undisguised joy. Fiftyish and boyish, he has the air of the Greatest Frat Brother Ever: smarter than you, wittier than you, louder than you, and as much fun as a barrel of monkeys. In the first few minutes of our talk, he fields calls from a lobbyist, a lawyer, and an old friend. All are supplicants. The lobbyist wants to know what happened at an important conference in the statehouse. Can Dick tell him? Hell, yes. The lawyer wants Dick's client to behave himself. Can Dick make it happen? Hell, yes. The old friend wants the new governor to appoint him to a commission. Can Dick arrange a meeting? Hell, yes. When he finally gets off the phone he reaches into his desk, grabs a hazelnut, tosses it to me, and swings into a story about a lawsuit that has something to do with a hazelnut orchard contaminated by runoff from a latex factory. "But these nuts are good! Crack that nut open. You'll be amazed? he shouts. He grabs the nut, smashes a book on it, brushes away the shattered shell, and reveals a bright pink condom. He laughs uproariously, then pockets the condom.

Harpootlian has the irrepressible glee of a man who has gotten exactly what he wants. He is the epicenter of South Carolina, the intersection of money and politics, of gambling and the Democratic Party. As the leading lawyer for the video-poker industry, Harpootlian has done more than anyone to make gambling prosperous, legal, and mighty. As the chairman of the state Democratic Party, he has revived an institution long ago left for dead. In 1998, when both video poker and the party seemed to face extinction, Harpootlian married his vocation and his avocation. He harvested the profits of video poker to save his party and harnessed the power of his party to save his industry.

At rock bottom, South Carolina has a gambling mess because it can't decide if it's a puritanical state or a libertarian one. The interior of the state is severe, religious, and conservative, but coastal Carolina is high-spirited and honky-tonk. The state beverage is milk, but the state university mascot is a gamecock. State law frowns on gambling, but law enforcement has long tolerated illegal wagering on cockfights, dogfights, and golf. In the late 1980s and early 1990s, when states and tribes staked their prosperity on lotteries and casinos, puritanical South Carolina resisted. It abjured a lottery and rejected Vegas mogul Steve Wynn's 1994 proposal to build six dockside casinos. Meanwhile, libertarian South Carolina embraced video poker, a form of wagering that seemed innocent, mild-mannered, and hardly to be gambling at all.

Video poker arrived in South Carolina as a fluke, a spin-off of the jukebox-and-pinball business. The father of the industry is Fred Collins, who bought his first pinball machine fifty years ago, when he was thirteen, and then built a "route" operation for distributing jukeboxes, pinball machines, pool tables, and video games to arcades and stores throughout the state. Collins brought the first video-poker game to South Carolina in the early 1970s--a "kit" that he added to the video game Pong. When stand-alone video-poker games were perfected a decade later, Collins and other route operators began installing terminals all over the state, splitting profits with restaurants, shops, and bars.

Here it's worth noting two critical oddities of South Carolina's gambling industry: it is rinky-dink and it is homegrown. Elsewhere in the United States, megacorporations such as Harrah's, Mirage, and IGT monopolize casinos, machine distribution, and lotteries. In South Carolina, there are more than 400 video-poker companies, all are local, and most came to gambling by chance. The names of the state's biggest video-poker companies--Darlington Music, Tim's Amusement, McDonald Amusement, Rosemary Coin Machines, Harrison & King Music--betray their origins as jukebox route operations and arcades. (Many still like to pretend they're in their old business: Collins, who owns 4,000 video-poker machines--more than anyone--and grossed $90 million off of them last year, insists, "I am in the amusement business, not the gambling business.") Most video-poker operators are small-timers with just a handful of employees, local companies knitted into the fabric of South Carolina.

Video poker began as an afterthought, but as profits surged through the 1980s, operators longed for legitimacy. South Carolina law forbade games of chance, so at first the operators relied on linguistic chicanery: Poker, they said, equals pinball. Play pinball well enough and you win a free game. Same thing in video poker. Suppose it costs twenty-five cents to play a game of pinball or poker. Well, then each skillfully won free game must be worth twenty-five cents. And if each game is worth twenty-five cents, surely you ought to be able to collect a quarter for it. And if you can collect a quarter for one free game, surely you should be able to collect 4,000 quarters for drawing a royal flush.

This pinball wizardry was not quite enough to make poker legal, so the industry turned to a more traditional political tactic: backdoor legislation. In 1986, State Senator Jack Lindsay silently dropped a tiny technical amendment into a distant corner of a 1,000-page budget bill that struck the words "or property" from a law banning any game from distributing "money or property to a player." Lindsay did this at the behest of Alan Schafer, owner of the massive roadside attraction South of the Border. At the time, no one except Schafer and Lindsay seemed to notice this picayune change or understand its significance. But in 1988, the state arrested a convenience-store owner and charged him with illegally paying out hundreds of thousands of dollars to video-poker customers. Harpootlian, once a county prosecutor, was hired for the defense, thus beginning his brilliant service to the industry. By striking "or property," Harpootlian argued, the legislature clearly permitted machines to distribute credit slips, which could, in turn, be redeemed for cash. In 1991, the state supreme court agreed. Without a debate, without an open vote, without a public referendum, South Carolina had legalized gambling.

The supreme court decision opened the way for poker's expansion, but it also galvanized poker opponents. Many of the anti-poker activists were conservative Christian Republicans, but perhaps the most fervent was a Democratic state legislator named Jim Hodges. Hodges, serious-minded and liberal, had grown alarmed at poker's explosion in his district and viewed the machines as a scourge on the poor and vulnerable. He lobbied feverishly to ban poker "payouts" (as the credit slips are called), and in 1991 and 1992 the legislature came up just short. When Hodges and his allies went after payouts again, the industry conceded to a county-by-county referendum, and in 1994 twelve counties voted to abolish them. Although the poker industry had agreed to the referendum, it immediately sabotaged it. Operators in those twelve counties hired Harpootlian, who persuaded a court to overturn the ban on the grounds that it violated the state constitution by applying criminal law inconsistently.

In that same 1994 election, South Carolina narrowly elected Republican David Beasley as its new governor. Then a thirty-seven-year-old state legislator, Beasley had abandoned the Democratic Party and shaken a playboy reputation by becoming a born-again Christian. (He had squired around Donna Rice during his days as a ladies' man.) Blow-dried to Ken-doll perfection and oozing ambition, Beasley was elected chairman of the Republican Governors Association and was discussed as a potential vice-presidential candidate for 2000.

Beasley opposed video poker, but he chose a curious way to fight it: he ignored it, believing that if poker were taxed and regulated, the state would get hooked on the gambling revenues. "We felt it was immoral to enter a profit-sharing plan with an industry whose lifeblood was the peril of the unwitting," says former Beasley adviser Larry Huff. Beasley chose anarchy instead, and the industry mushroomed. "We had a governor who would not admit he had a gambling industry," Harpootlian says. "David Beasley was a narcoleptic when it came to gambling."

It's true that Beasley didn't do much to control video poker, but it's equally true that Harpootlian & Co. squelched what few efforts Beasley and others did make. In 1996, when Beasley and the state legislature attempted to reinstate the twelve-county ban by imposing only civil penalties, Harpootlian persuaded a judge to stay the new law. When a class-action lawsuit on behalf of compulsive gamblers tried to end video gambling on the grounds that it was a lottery, Harpootlian convinced the supreme court that video poker was not a lottery because it does not "involve a drawing."

A year before Beasley took office, the legislature had managed to pass a few anti-poker laws, regulations limiting one location to eight machines (later five), capping winnings at $125 per day, forbidding most advertising, and banning inducements. The industry spent the Beasley administration ignoring some of these regulations and mangling the rest beyond recognition. Consider the $125 cap, designed to ensure that video poker is played for low stakes. Every machine advertises its jackpot: The smallest I saw was $251.04. The largest was more than $7,000. In 1998 lawyers in a class-action suit against the industry sent a private investigator with a camera hidden in his watch to photograph thousands of poker machines; none of them had a jackpot of less than $125. Operators circumvent the law by long division: if someone hits a $500 jackpot, the machine prints out four $125 slips that players must cash on four different days. "The industry said it would just be low-stakes gambling--$125," says Richard Gergel, the lawsuit's lead attorney. "But these people were criminals. They never obeyed the law. They decided they were going to engage in high-stakes illegal gambling until someone stopped them, and no one did."

When Beasley tried to impose a statewide computer-monitoring program that could automatically prevent payouts of more than $125, Harpootlian went to court and delayed it. As for the advertising ban, you can't drive down a highway in South Carolina without seeing a billboard directing you to VIDEO GAMES. The legislature forbade inducements, but operators ply gamblers with free food, free booze, free massages, free taxi rides, even free film development.

During Beasley's term, the industry also managed to weasel out of the five-machine limit that legislators had imposed to prevent casinos. A video-poker entrepreneur named Mickey Stacks noticed that the law simply restricted operators to five machines on one "premises." According to the State Department of Revenue, a "premises" has to have fire walls, a business license, a power meter, and an attendant. Stacks realized that as long as he met those specs, he could cram as many "premises" as he wanted into a single building. So in 1995 he built Treasures, the original warren-casino. Soon scores of these subdivided monstrosities were sprouting across the state. Video malls now house 45 percent of the state's poker machines.

What's remarkable about South Carolina is not simply the few (flouted) regulations it does have but the many regulations it doesn't have. Unlike virtually every other state with gambling, South Carolina has no gambling commission and no rules about who can own a gambling license (two of the state's leading video-poker operators are convicted felons). South Carolina does not forbid children from gambling (though an adult must collect their winnings). Nor does the state require that machines be honest or fair, so operators can set poker terminals to pay out as little as they want. The half-dozen other states with video poker harvest up to 50 percent of revenues in taxes. South Carolina collects only a piddling $2,000 annual license fee on each machine. South Carolina, says University of Nevada gambling economist William Thompson, is "the Wild West" of gambling.

On Friday morning, twelve hours after my first visit, I return to Treasures. It is a gorgeous day, 75 degrees in the middle of February, but Treasures is as packed and gloomy as it had been when I left at midnight. I turn into the game room where I played the night before, and Joyce is sitting there, right where I left her. She is still playing Shamrock Sevens. She is still clutching a cigarette in one hand and pinging the screen with the other. She is wearing the same green sweat suit she had on last night. She claims she went home and has come back "just for an hour" because she won't be able to play all weekend. She'll be too busy babysitting her grandchildren. "Oh, that's going to be a real treat," she told me. "We are going to have a real party."

I play the machine next to her for a few minutes, lose a couple of dollars, then stroll among the game rooms. I spot another woman I had seen playing the night before. She too is wearing the clothes she had on last night. I fall into conversation with Chris, a game-room attendant. He delivers the candy and water to gamblers and wipes down the machines with Windex. For this, Chris makes $5.50 an hour "plus tips," of which there are exactly none. He took the Treasures job three days ago because he got fired from a dog-food factory.

I have gambled in Vegas casinos, Indian casinos, Mississippi dockside casinos, bingo parlors, horse tracks, and dog tracks, but if there is a gambling house one-tenth as depressing as a South Carolina video parlor, I have not seen it. America's vision of gambling is Las Vegas, a fantasyland where the air is--or so goes the myth--perfumed and oxygenated so that customers bet more, where there are cigarette girls and slick dealers and free drinks and sparkling lights. Vegas shellacs gambling with so much glamour that you forget it's gambling. South Carolina has done the reverse. It has distilled gambling to its purest essence: an icy transaction between man and machine. No liquor, no food, no dealers, no glamour, no perfume, no neon, no cigarette girls, only cigarettes. (Forget oxygenated air--there's barely air.) All that remains is the grind: the machine, a few Tootsie Rolls, and a whole lot of people who don't have too much money squandering it.(*)

"You wouldn't really call it entertainment. It's more like a peep show," says Glenn Stanton. "Why do so many people play it?" he asks. "Why do so few people exercise? People don't do what they should. And on this issue, it is clear that the state has a compelling interest in keeping people from behaving in a way that is detrimental to them."

Video-poker supporters recast Stanton's stop-them-for-their-own-good views as overblown and puritanical. "Are we going to ban Ben & Jerry's?" Harpootlian asks. "I mean, more people are going to die from cardiac arrest stuffing their fat faces with Ben & Jerry's ice cream than they are from the perils of betting. It's a little paternalistic." But there is a flaw in Harpootlian's practiced libertarian creed, and that flaw is video poker. As poker metastasized during Beasley's administration, South Carolinians began to realize that it was not simply an irritant but a menace. Video poker is not Ben & Jerry's. It is the crack cocaine of gambling, gambling at its most addictive and virulent, producing few economic benefits and high social costs. If there were ever a case for government restriction of gambling, South Carolina is it.

Video poker is dangerous for the same reason it is popular. It combines the speed of slots and the skill of table games but avoids their bad features. Gamblers dislike slots because they're dull: a random-number generator determines whether you win or lose. Table games are slow and intimidating to novices. But video poker is as fast as slots: I clocked myself playing eight games of video poker a minute, nearly 500 chances for a jackpot in an hour. And video poker requires (minimal) skill: you can make decisions that will improve your likelihood of winning--there's an entire library of books and videos devoted to strategy, such as Fundamentals of Video Poker, Video Poker Mania! Video Poker for Winners--though not decisions that will ever let you beat the house. Unlike table games, video poker doesn't scare novices, because "you can sit down and play the games without being worried about other people judging your competence," says Fred Preston, a sociology professor at University of Nevada at Las Vegas. (Preston adds that this makes video poker especially enticing to women, who rarely play table games.) But video poker is devastatingly addictive to the susceptible. According to compulsive-gambling expert Robert Hunter, gamblers hooked on the horses or table games take twenty years from first bet to bottoming out. Video-poker addicts take only two and a half years. Unlike other forms of gambling, video poker does not excite players. It numbs them. "There is an ability to block out external stimuli while you are playing the games. Almost without exception, my video-poker patients report not excitement but anesthetized nothingness. It is a twilight-zone experience for them," says Hunter. In hours and hours of South Carolina gambling, I saw only one display of emotion. A woman dropped to her knees and prayed for four of a kind: "Give me a king," she implored, "a king for my birthday." She drew a jack. More typical was the middle-aged man seated next to me who hit a $208 jackpot on a quarter bet. I heard the celebratory bells and looked over. He was expressionless, already playing his next hand.

South Carolina does not collect data on gambling addiction, but during the Beasley years the number of Gamblers' Anonymous chapters in the state tripled. Last year Columbia psychologist Frank Quinn conducted the first statewide survey of gamblers and found that some 20 percent of the 553 poker players he quizzed met the criteria for a problem-gambling diagnosis--a compulsive gambling rate twice as high as Las Vegas's.

The economics of video poker are just as devastating. University of Nevada at Reno Professor William Eadington ranks different sorts of gambling by their economic benefits. Topping his list are "destination casinos," such as those in Las Vegas, which draw tourists, support hotels, restaurants, shops, and theaters, and provide tons of new jobs, many of them at union wages. Since tourists take their addictions and bankruptcies home with them, destination casinos "export the social impacts of gambling." Next on Eadington's list are rural casinos, such as most Indian casinos, which bring jobs to undeveloped areas, "export" most social impacts, but don't generate much ancillary development. Large urban casinos rank next. They may attract some tourists and spark a little ancillary development, but because most gamblers are local, the surrounding community bears the social costs.

At rock bottom, says Eadington, is the South Carolina model. The low-density, low-glamour gambling draws few tourists and no development. The jobs are McJobs, such as convenience-store clerks and game-room attendants. Most gamblers are locals, so little out-of-state money flows into the economy, and the state absorbs the social costs, which are particularly high, because video poker is so addictive and the machines are so ubiquitous. Other gambling models limit addiction by requiring gamblers to travel some inconvenient distance to bet. But in South Carolina nothing stops the vulnerable from gambling all the time.

"There is no pretense that this is about tourism or this is about a nice night out or that this is entertainment," says Tom Grey, head of the National Coalition Against Gambling Expansion. "This is hard-core, grab-the-paycheck gambling."

For several months last year, this sign greeted drivers crossing from Georgia into South Carolina: GOV. DAVID BEESLAY WELKUMS YOU TOO SOUTH CAROLINA. WE BE GOTS DE WURSTEST SKOOLS IN DE UNITED STATE. WE BEES NUMBUH 50TH.

The sign was the inspiration of Henry Ingram, one of the state's largest video-poker operators, who, like virtually everyone in the industry, detests David Beasley. Ingram detests Beasley so much that he spent his own money last year--no one knows how much, since such expenditures go unreported--attacking Beasley's education record. Ingram detests Beasley so much that he placed a covenant on his own property: it cannot be sold to a Yankee or "anyone named Beasley." Ingram and his fellow video-poker tycoons detest Beasley so much, in fact, that Beasley is no longer governor.

Now, let's make something clear. Beasley is a shameless political opportunist. He wields his religion like a club. He was caught lying to schoolchildren about his athletic exploits. His fellow Republicans don't trust him. South Carolinians, who loathe Bill Clinton, compare Beasley unfavorably to the President. I had to struggle to find anyone in the state who actually likes Beasley. So it is a testament to the crushing power of the video-poker industry that it actually makes people feel sorry for David Beasley.

In early 1998, Beasley was coasting toward reelection. All good Republican things--incomes, prison populations, executions--were way up. All bad things--unemployment, crime, taxes--were way down. The Christian right, which all but owned the state Republican Party, was thriving, and the party coffers were full of cash. The Democratic Party was battered by twelve years of defeat, its treasury empty, its staff skeletal, its poll numbers dismally low. "They appeared," says State Republican Party Chairman Henry McMaster, "headed for extinction." Early polls gave Beasley a twenty-point lead, and no wonder. His Democratic opponent was the anti-gambling legislator Jim Hodges, who seemed a sure loser: little-known, uncharismatic, and a bit gloomy.

Then Beasley did something that was simultaneously incredibly courageous and cravenly opportunistic. He declared video poker a "cancer," and in his January 1998 State of the State address he proposed to ban it immediately. Almost the entire audience, which included all 168 state legislators, rose in a standing ovation. "The industry was gaining political clout, and if they were not stopped then, a couple of years down the road they would have too much political clout to reverse," Beasley says now. "In your heart you know that this is the time to do it, no matter the political consequences, no matter the cost."

This kind of talk makes Beasley's critics gag. "He decided that he was going to ratchet himself up to the next level. He could be the Governor That Killed Gambling," mocks Harpootlian. "This was all a calculated move on his part, not sincerely based on a hatred of video poker or gambling but to ratchet himself into a V.P. candidacy in 2000. Huge miscalculation."

The move may have been heartfelt and it may have been calculated, but it was undoubtedly disastrous. Beasley prodded the state legislature to outlaw video gambling, and within weeks of his speech the Republican-controlled house overwhelmingly passed a ban. A majority of the Democratic-controlled senate also favored the ban, but anti-gambling senators successfully filibustered. "I stood on the floor and said video poker owns this senate, and no one disagreed with me," says Senator Wes Hayes, who led the legislative campaign to ban poker.

The bill died in April, and in essence so did Beasley. Every machine owner, every owner of a convenience store, truck stop, gas station, bar, or restaurant that depended on video poker, and all their employees were now out for Beasley's scalp. As the new chairman of the Democratic Party, Harpootlian was perfectly positioned to solicit contributions from the disgruntled pokerites.

Harpootlian found a surprisingly cooperative partner in Hodges, who, as the Democratic gubernatorial candidate, conveniently discarded his ferocious anti-poker stance. Hodges says he decided after the 1994 referendum that voters, not politicians, should determine whether poker was to be legal. Republicans contend that he cynically dropped his objections to poker in order to fund his run. In any case, as the gubernatorial race began, Hodges announced that although he disliked video poker personally, he favored a voter referendum to decide whether to keep it. If voters approved poker, he would regulate and tax it. This declaration of neutrality, coupled with Harpootlian's presence in the Democratic Party headquarters, signaled to poker operators that Hodges was their candidate.

"Look, Hodges had a history of being opposed to video poker," says John Crangle, who runs the state's chapter of Common Cause. "But I think he saw an opportunity to knock Beasley off, and he thought the price was worth paying. He thought that as governor, he could do things for education and corrections and race relations that would counterbalance whatever evil video poker was."

In previous elections Democratic gubernatorial candidates had managed to raise only $1-2.5 million, half what their Republican opponents collected. But in 1998 the Democratic Party and Hodges's campaign found themselves awash in money. Hodges estimates that "less than 10 percent" of the $3.7 million he raised came from video-poker sources. This is laughable. The Republican Party analyzed Hodges's large donations and concluded that more than 70 percent of his contributions of $1,000 or more came from people tied to video poker. (For example, one video-poker operator told me she gave the $3,500 maximum to Hodges and enlisted family members to give $20,000 more.) And although campaign-disclosure laws don't require parties to report their soft-money receipts, educated guessers hazard that video poker also supplied a million dollars or more to the Democratic Party. "David Beasley is the best friend the South Carolina Democratic Party has had in the last several years. David Beasley, through his own stupidity, funded the statewide Democratic ticket," says Crangle. (If this seems to be an odd statement from a good-government type, it's worth noting that Harpootlian served on Common Cause's board till he became the Democratic Party chairman.)

Harpootlian and Hodges put the money to good use. Hodges, who had also long opposed a state lottery, reversed himself and made the introduction of a lottery the cornerstone of his campaign. He promised to earmark the revenues for public education, as Georgia had done with great success. The lottery notion polled more than 70 percent of voters' support, and it massacred Beasley. The Democratic Party spent a fortune on ads showing a Georgian "Bubba" thanking Beasley for the millions of dollars South Carolinians had contributed to Georgia schools via the Georgia lottery. "Hodges just took the lottery, turned it into a blunt instrument, and clubbed Beasley senseless with it," says Stanton.

The poker moguls were not satisfied with simply writing checks to Hodges and Harpootlian, however. Several launched their own independent anti-Beasley crusades. Fred Collins had loathed Beasley ever since state agents had conducted a Christmastime raid on one of his warehouses in a fruitless search for illegal gambling devices. "What would you do if someone called your business a cancer?!" Collins shouts at me. Collins ran thousands of anti-beasley radio ads; erected 110 BAN BEASLEY billboards; distributed BAN BEASLEY bumper stickers, hats, and T-shirts; and bought full-page ads in twenty-six state newspapers urging an anti-Beasley vote. Collins staffed an anti-Beasley war room in Greenville and funded anti-Beasley phone banks. He refuses to divulge how much he spent, but even the most cautious estimates peg it at more than $500,000; a good guess is more like $1 million.

Meanwhile, Henry Ingram spent thousands on ads in southern South Carolina, and South of the Border's Alan Schafer is estimated to have dropped more than $50,000 on 4,300 radio ads in the northeast of the state. The L'il Cricket chain sponsored its own dump-Beasley campaign. (The private spending of Collins, Ingram, and Schafer so shocked South Carolinians that one of the first bills the general assembly passed in 1999 requires disclosure of independent expenditures.)

Video poker's money also spilled into other strange corners of the campaign. "Republicans for Hodges," a handful of Republicans who detested Beasley for screwing over a local party operative, received more than $35,000 from poker interests; the Black Community Developer Program is thought to have received more than $25,000 for its grass-roots, anti-Beasley work. And in what must be the most peculiar episode of the race, poker operators underwrote the Palmetto League, a coalition of "heritage" groups. These groups--Sons of Confederate Veterans, Heritage Preservation, the Conservative Alliance, and the like--ostensibly espouse "Southern pride." In practice, they are essentially white supremacists with mailing lists and a veneer of mainstream respectability. The Palmetto League's founder, Jerry Creech, used to run South Carolina's chapter of the racist Council of Conservative Citizens. ("We believe America was founded by Christians who believe in Jesus Christ. Not Muslims. Not Hindus," Creech tells me in one of his milder moments.)

The heritage groups constitute a small but vocal bloc whose greatest passion is to keep the Confederate battle flag flying over the state capitol. In 1994, Beasley courted the heritage vote by promising to protect the flag, but two years later he announced a revelation: his reading of the Bible convinced him the flag should come down. Beasley fought briefly for his epiphany, the legislature smashed him on it, he dropped the issue, and the flag stayed. But the heritage groups never forgot his betrayal.

Hodges had been one of the few white legislators who opposed the Confederate flag, but when Creech called on Hodges early in the campaign, he said that he wouldn't try to remove it. Satisfied that Hodges wasn't a threat, the Palmetto League set about savaging Beasley, mailing fliers, establishing a "Dump Beasley" Web site, and buying ads on cable TV and country-radio stations. At least half of the money the Palmetto League spent, which by Creech's account was more than $100,000, came from video poker.

Beasley's twenty-point lead narrowed and then vanished under the universal ambush. Everything went sour. He was forced to call a press conference to deny that he had had an affair with his former spokeswoman, a rumor reportedly linked to Harpootlian's opposition research machine. With Hodges killing him on the lottery, Beasley abandoned his resistance to it, infuriating his conservative base. Whenever Beasley complained that video poker was buying the election, Hodges countered effectively by blaming gambling's explosive growth on Beasley's inaction. On Election Day, the poker moguls delivered the coup de grace. Collins gave his 370 employees the day off, and they ferried more than 8,000 voters to the polls. Collins's phone banks called 20,000 voters in Columbia and Greenville alone. Other video-poker companies shuttled voters directly from their game rooms to voting booths.

Hodges beat Beasley convincingly, 53-45 percent, and Democrats also snatched four GOP seats in the statehouse and two statewide offices held by Republicans. L'il Cricket celebrated Beasley's defeat by awarding employees a dollar-an-hour raise. Beasley fled to Harvard University's Institute of Politics to teach a seminar about "political figures risking it all."

Hodges and Harpootlian insist that video poker did not win them the election. They note that voters loved Hodges's lottery/education twofer and that Beasley had infuriated his base by flip-flopping on the lottery and the Confederate flag. Harpootlian claims that the million-dollar interference by Collins actually harmed Hodges because it was so heavy-handed ("one ignorant schmuck," is what Harpootlian calls Collins).

But it's undeniable that without video-poker money, Hodges wouldn't have reached so many voters with his lottery message. He couldn't have afforded enough TV time, polling, opposition research, and get-out-the-vote drives to overcome Beasley's incumbency. "Democrats have been sucking on the hind tit here for so long. This was the first time in decades Democrats were able to raise money," says Common Cause's Crangle. USA Today, which in January made the first systematic attempt to calculate the video-poker contribution, conservatively estimates that the industry spent at least $3 million in its varied efforts to topple Beasley. This translates into about $6 for every Hodges vote.

To which Democrats and videopoker operators say: no big deal. Video poker is just another special interest, $3 million is just free speech, and the gang-tackle of Beasley was just old-fashioned politics. "Are those people equally disturbed by the money David Beasley raised from people who had ties to state government? Were they worried about the health-insurance and life-insurance and auto-insurance companies that gave substantial dollars to David Beasley?" asks Hodges. "The truth is that, sadly, people who have interest in state government contribute to campaigns.... That happens to be the way the system works."

But this is a weak rationalization. No special interest gave Beasley anything like what video poker gave Hodges. A "special interest" is an industry whose contributions may total 5 percent of a candidate's war chest or a corporation that spends $25,000 in an election cycle. Put the $3 million in context: In 1997 and 1998 the entire gambling industry, an industry notorious for its muscle, gave $2.8 million in PAC money, soft money, and direct contributions to all candidates in all congressional elections--less than $3 million for 468 races. And here is video poker spending more than $3 million for a single candidate in a single election in a single state. When 70 percent of your big contributions come from a single industry, when the head of your party is the leading advocate for that industry, when a tycoon from that industry spends $1 million on your behalf, that industry is no longer a special interest, it is a parent company.

"Had the video-poker industry not been involved in my campaign, I probably would have won 65-35 percent," says Beasley. "The video-poker industry is buying the leadership in our state. They have shown they can unduly influence elections and there is no consequence to that. They intimidated the media. And they own the governor's office."

"Own" may be an exaggeration, but you can see Beasley's point. The Democratic Party, which seemed dead and buried, is alive and flourishing. The poker industry, which Beasley tried to kill, is alive and flourishing. And Beasley himself is dead and buried, virtually renounced by his own party. "David Beasley is a non-person," says Harpootlian gleefully. "I am here. And he is not!"

I don't believe in the journalistic trope that the office represents the man, but I'm willing to make an exception for Jim Hodges. Governor Hodges's office is cavernous and dark. Thick curtains block the sunlight. A portrait of a grand old South Carolinian--John C. Calhoun, perhaps--sneers at the far end of the room. The principal illumination is the screen saver on Hodges's computer, an endlessly scrolling message: "It's all about South Carolina schools." This somber atmosphere seems suited to the dolorous Hodges. He suffers from a case of Al Gore disease: too earnest to have a common touch.

It's clear from the moment we meet that Hodges would rather talk about anything than what I have come to discuss. He has spent the first months of his administration deflecting allegation after allegation that video poker bought him. And here he is, compelled to deflect another one. "I certainly wasn't advocating for the business," he says. "I'm sure the people that had connection to the industry looked at the options that they had and felt like they had a choice between a guy who said, `Look, I don't like the business and I'd vote against it personally if it came up for referendum again, but I think people ought to have a choice,' and a guy who was basically blaming them for everything that was wrong in South Carolina."

"We have the worst of both worlds. We have unregulated and untaxed video gaming," Hodges continues. "I've made it very clear that if I had my druthers, South Carolina would not have video gaming. But up to this point the people in the state have said they do want it, and until the people of the state say they don't want it, then I think our obligation as leaders is to regulate it as effectively as we can and police it as effectively as we can."

As soon as he took office, Hodges and Democratic legislators introduced a regulatory package: drop the $125-a-day winnings cap, which Hodges calls "unenforceable," and impose a $500 "per-sitting" winnings limit instead; bar felons from owning video-poker machines; tighten the advertising ban; place a moratorium on casinos; and tax wagers to raise $200 million a year. As promised, Hodges is also pushing for a statewide referendum on video poker, which is likely to be held this fall.

Hodges is proud of the strictness of these proposed regulations, and he honestly considers himself a foe of the industry. And it's true that video poker did not buy a governor in 1998. Video poker bought something more valuable than a governor. It bought the right to be taxed and regulated; that is, the right to survive forever. Taxation and regulation are anathema to most businesses. But to a rogue industry they are priceless--guaranteed legitimacy. The poker operators are happy to pay $130 million in taxes. They know that once cash starts flowing into the treasury, the state will grow hooked on the money. And poker operators will still have $600 million in profits to take to the bank. (Collins, with a calculation so blatant that it's almost charming, proposes that poker tax funds be spent on college tuition for South Carolina high school graduates. "Palmetto Promise Scholarships," he calls this proposal. What state legislator would dare to cut "Palmetto Promise Scholarships"?)

John Crangle of Common Cause says he doesn't worry about video poker's 1998 flood of political spending, because it will never happen again. "The magnitude of the spending is a one-time thing." He's right. Collins and his poker partners won't spend millions in the 2002 election to re-elect Hodges. They won't need to. In slaughtering Beasley, they warned every politician in the state: Challenge us and die. The state Republican Party still officially opposes gambling and is pushing for tougher regulations than the ones Hodges has proposed, but the party has faint hope of winning the statewide referendum. "It's over," one COP staffer tells me. "You aren't going to do something when you just know you are going to take an old-fashioned butt whipping if you try."

On my last night in South Carolina, a Saturday, I return to Treasures. I am starting to feel like a regular. I immediately see Joyce. She is wearing different clothes than when I saw her on Friday, thank God. And she is betting on a different machine. She's planted at the terminal right next to the one she had been playing for the past two days. The first thing she says to me is, "I hit it. I hit it this afternoon." I don't have to ask what she means: she won the $700 jackpot on the other machine. "My grandkids got sick, so I didn't have to baby-sit. So I came in around three, and I hit it." It is now seven P.M. She says all this matter-of-factly, her eyes still on her machine, one hand clawing for a Vantage, the other automatically tapping the screen.

She has me sit down next to her, but not at the machine she hit. After all, she says, "What are the chances of getting another jackpot on that one?" Joyce believes in clusters: because she hit one machine in this room, she's confident (if not quite sure) that one of us is going to hit a jackpot on another. We play Shamrock Sevens, twenty-five cents a hand. After an hour or so, I run out for some dinner. She is still there when I get back. I take my seat next to her, and we keep playing, till nine P.M., ten P.M., eleven P.M.

We don't talk at all, except once when Joyce interrupts the silence to say, "There was a guy down in the other room. He was playing blackjack--300 bucks a hand. I couldn't believe it. He just kept sliding twenties into the bill collector. And he was winning too." We are playing for a quarter a hand, and neither of us is winning much of anything. I am up thirty dollars for a while, then down ten, then back up twenty. A woman ducks her head in, looking for a hot machine. "Any bells ringing in your office tonight?" she asks. We shake our heads no. At about 11:15 my right arm starts to ache from all the tapping. It will hurt for the next three days. I go to the bathroom and see that my eyes have turned bright red, a reaction to the smoke and the screen. When I get back to my machine I notice that Joyce's eyes, too, are bright red. Everyone's eyes, in fact, are bright red.

Joyce asks me for the time. "I have no conception of time when I get in here," she says. I tell her it's 11:30. She laughs. "My dog has probably peed in the house by now. I wouldn't blame him if he did. It's my fault. I left him there." She says she has to go. She ups her bet from twenty-five cents to fifty cents, to lose faster.

Actually we all have to go, because the poker machines go dark at midnight on Saturday and stay dark till Monday morning. This is a tiny nod to South Carolina's churches, and it is just about the only law that videopoker operators always obey. At 11:45, Joyce finally stops in earnest. She has lost all that she was playing. ("Just a twenty," she says.) She grabs her pack of Vantages and wishes me goodnight. Then she turns to the attendant and points at her Pot-O-Gold. "Put that machine aside for me for Monday, would you, honey? Eight-thirty A.M., okay?"

(*) On average, gamblers lose about twice as much--10 percent--on every video-poker bet as they do on every table game or slots bet.

(*) Five-card-draw poker is the basic video-gambling game, but "multigame" machines also offer blackjack, bingo, keno, and curiosities such as Pieces of Eight Criss Cross, an inexplicable combination of poker and ticktacktoe.

(*) No one has studied the demographics of video-poker players, but a cursory look around any venue reveals that it is an activity for the lower middle class: elderly women, blacks, hicks. Not a single one of the prosperous pro-poker lawyers, lobbyists, politicians, and machine owners I talked to plays video poker. It is a game for other, poorer people.

David Plotz is the Washington editor of Slate.com. Check it out!

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(posted 13 Oct. 1999)