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November 22, 2017

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Should South Carolina gamble on casinos?


Dave Martin / AP

Workers wire new electronic games at the new 20-story Wind Creek Wetumpka, a gaming casino owned by the Poarch Band of Creek Indians under construction in Wetumpka, Ala., Thursday, Oct. 24, 2013. The casino will open Dec. 17 and the hotel in late January or early February. The project cost $250 million and will replace a smaller casino the Creeks have operated next door.

COLUMBIA, S.C. — Every two months or so, Willie Rae Lee scrapes together $200 and steps onto a bus bound for Harrah's Cherokee in North Carolina, Wind Creek in Alabama or a few other casinos dotting the Southeast.

The 72-year-old Columbia resident spends a day or two gambling with her friends, filling slot machines with pennies and nickels and hoping for the same luck that won her $3,750 on a single spin four years ago.

"I like the atmosphere and the games," said Lee, a veteran of the buses that ferry South Carolina residents across state lines to gamble every week. "I like it all. If you go one time, you definitely want to go again."

South Carolina lawmakers this year could consider a proposal to keep Lee's coins in the Palmetto State — in the name of fixing the state's crumbling roads.

State House Minority Leader Todd Rutherford has filed a bill to pave the way for casinos in the Palmetto State. The state's share of the revenue would go toward the billions of dollars needed for road repairs.

Rutherford's bill is unlikely to go far this year. A House panel might not even consider it. And business leaders in one area of the state targeted for casinos say they have no interest.

Opponents doubt casinos would raise the money supporters claim. They also have moral concerns about legalizing gambling, which evangelicals say promotes greed and tears apart families.

Pro-casino lawmakers acknowledge the proposal's chances of passing this year are slim but are aiming to build momentum behind the idea here.

Forty states have commercial or tribal casinos, thanks in part to a recent surge of states turning to casinos as a way to address their budget woes. And, casino advocates note, neighboring Georgia could be next.

In Maryland, six casinos generated $510 million for the state last year, a benefit that casino supporters say South Carolina could reap as well.

"If this state was operated like a business, we would have had casinos years ago," Rutherford said. "What we've got to do is make sure we're not leaving money on the table."

The idea of legalizing casinos in South Carolina is not new.

Rutherford pitched the same proposal in the last legislative session. Former state Reps. Boyd Brown and Bakari Sellers offered a similar proposal in 2011.

Those plans went nowhere, left for dead in the House Judiciary Committee.

But supporters of this year's proposal say funding shortfalls at state agencies, coupled with the possibility Georgia could legalize casinos this year, could persuade state legislators to take a harder look at the idea.

South Carolina has huge needs and little money or the political willpower to address them, casino advocates note.

• State agencies — from Education to Social Services to Health and Environmental Control — repeatedly have said they cannot do their jobs with the amount of money that lawmakers give them.

• The state owes roughly $20 billion more in promised benefits to retirees than it has in its pension system. Critics say that number could be as high as $40 billion.

• The state Transportation Department estimates it needs $20 billion over the next two decades to repair and maintain crumbling roads that endanger drivers and are threatening to strangle the state's economy.

"Everywhere we turn, we are dealing with the Republicans' failure to lead," Rutherford said. "All they have done is kick the can down the road, and, in doing so, they've put this state in the hole."

Rutherford says the state's problems are too severe to fix by raising taxes — something the GOP-controlled Legislature is not prone to do, anyway.

His proposal would allow S.C. voters to decide whether to give the Legislature the power to legalize gambling — including betting on professional sports, horse racing and casino games — in specified areas of the state.

Supporters envision massive resorts — filled with hotels, restaurants and shops — in addition to casinos with Las Vegas-style gambling.

The ideal location, they say, is in or outside Myrtle Beach — already a booming tourism hub. Casino resorts just south of Charlotte or across the Georgia border from Savannah also could attract thousands of out-of-state visitors, they say.

Gambling would be heavily regulated and limited to those resorts, proponents say.

"The last thing I want is Bubba and Bob's Bingo Parlor on I-77," said Brown, who left the Legislature in 2012 and now works as a lobbyist.

The state could expect "hundreds of millions" of dollars in annual tax revenue for each site, Brown said. He says gambling resorts could have close to $2 billion a year in economic impact and create tens of thousands of jobs — numbers casino opponents label optimistic.

Pro-casino supporters say the state is missing out on that revenue when residents and tourists go elsewhere to gamble. Harrah's Cherokee in North Carolina, for example, usually receives two bus loads of S.C. residents a week, a spokesman said.

State Rep. Russell Ott, a co-sponsor of the bill, himself is a regular.

"I go two or three times a year, and I take all of my money to North Carolina, and I use it there," the Calhoun Democrat said. "I would much rather be able to take my money to Myrtle Beach or somewhere else here in the state of South Carolina and have South Carolinians employed and have my money go to the local economy."

South Carolina would become the latest in a string of states legalizing casinos to help pay for government.

• Faced with budget deficits during the Great Recession, Ohio voted to allow casino gambling in 2009.

• In 2011, Massachusetts passed a law allowing for three casinos to supplement its ailing budget.

• In 2012, Maryland voters legalized full-fledged casino gambling, touted as a way to boost that state's education funding.

Across the Savannah River, Georgia lawmakers now are considering a similar proposal to help fund a state scholarship program. Last month, Georgia's Republican Gov. Nathan Deal said he would not oppose gambling legislation as long as it doesn't hurt that scholarship program.

Forty U.S. states now allow commercial or tribal casinos, up from 29 in 1995. South Carolina is one of 10 with none, though S.C. residents still can take casino boats from Horry County three miles into the Atlantic Ocean, where state gambling laws do not apply.

Gambling has become more acceptable in American life as demographics have changed and "outdated myths and stereotypes" about the business have somewhat eroded, said Whit Askew, vice president of government relations at the American Gaming Association.

AGA-commissioned polls have found 90 percent of U.S. voters find casino gambling is an acceptable form of entertainment, Askew said. Two-thirds of casino patrons are homeowners, 70 percent are in the middle or upper class, and more than one-third attend church regularly, he said.

"It's an interesting industry that over the last 25 years has clearly become more mainstream," Askew said. "When you look at public opinion, it only further backs that up."

Casino supporters say the resorts drive billions of dollars into local economies.

In Maryland, which legalized full-fledged casinos in 2012 after a 2008 experiment, gambling has been "spectacularly successful," according to Maryland Lottery and Gaming Control Agency director Gordon Medenica.

Last year, six casinos in Maryland generated $510 million for the state. Their gaming operations alone — not including associated hotels or restaurants — employ about 7,300, Medenica said.

Their impact on local crime is what you would expect from a sports or music venue, he said.

"Whenever you have that many people coming in to have a good time, you're going to get the typical problems of disorderly conduct and behavior and things like that," Medenica said. "But, in terms of the classic notion that casinos bring crime with them, I would say people have been watching too much 'Boardwalk Empire.' "

But while Maryland casinos have helped the state stave off more tax increases or spending cuts, they have not resulted in more money going to education, the stated goal.

As new revenues have come in from casinos for schools, Maryland officials instead have redirected general fund money that ordinarily would have been spent on education to other purposes.

A pair of powerful House Republicans cast a skeptical eye at Rutherford's proposal, as does the Myrtle Beach Area Chamber of Commerce.

Gambling "doesn't make for good citizens" or produce the revenue its supporters promise, said state Rep. Greg Delleney, R-Chester, chair of the House Judiciary Committee.

Government already is too big — without any added gambling revenues — and always wants more money. "In good conscience, I just couldn't support it."

State Rep. Gary Simrill, R-York, the House's roads expert, says a gas tax hike — up for debate again this spring — remains the best way to pay to repair the S.C. highway system, among the largest and worst-funded road system in the country.

The state's one recent experience with gambling also has not lived up to all its expectations, Simrill notes.

The S.C. Education Lottery — approved by 54 percent of S.C. voters in 2000, largely to pay for college scholarships — fails to pay for all the college scholarships granted by the state and has not curbed rising college costs for S.C. families.

"I just don't think it's a good direction for South Carolina," said Simrill, who also opposed the lottery. "South Carolina has so many qualities to it. In our lexicon of what we do and how we do things, we're a jobs and economic development state. ... I don't think we need the premise and the promise of gambling revenue to pay for other services."

Other opponents, including Southern evangelicals and family advocacy groups, say gambling is driven by greed — a sin in the Bible — and can spawn addiction that tears apart families.

"When you have gambling addiction, you have people that are hoping to change their lives dramatically through gambling," said Oran Smith, chief executive of the Palmetto Family Council. "They're putting more into their gambling habit than feeding their families or putting gas into their vehicles to go to work."

Meanwhile, the Myrtle Beach Area Chamber of Commerce says it does not want casinos on the Grand Strand.

"South Carolina's roads are in terrible shape, and we desperately need sustainable infrastructure funding," chamber chief executive Brad Dean said in a statement. "But the idea of building a casino in Myrtle Beach to help fund statewide road improvements is not a solution."

In a statement, the S.C. Chamber of Commerce said it supports House and Senate gas-tax hike proposals but never has considered the issue of legalizing casino gambling.

S.C. residents, who would have the ultimate say if Rutherford's bill passed, appear to be split on the issue.

In an October 2014 Winthrop Poll, 47.3 percent of those surveyed said they supported opening gambling casinos in South Carolina. But 47.3 percent opposed the idea as well.

When offered a choice of two proposed solutions to fix the state's roads by the liberal-leaning Public Policy Polling in February 2015, 58 percent of South Carolinians surveyed picked legalizing casinos while 26 percent chose raising the state's gas tax by 10 cents a gallon.

Count Willie Rae Lee, who is planning a weekend trip to an Alabama casino next month, among the most ardent supporters of Rutherford's casino proposal.

"That'd be great," Lee said. "You wouldn't have to ride as long, and then you'd be closer to home and you could stay longer if you want. A lot of people like to go to these things, but they don't feel like doing all that riding."

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