After the N.C supreme court ruled that the Internet Sweepstakes gambling parlors are unconstitutional and that they will be forced to close down starting January 3rd. The parlors continue to remain open, defying North Carolina law.
Last month it was announced that ITT (Internet Technologies) filed a restraining order against Governor McCrory, Secretary of Crime Control and Public Safety Kiernan Shanahan, and Davidson County Sheriff David Grice.
This restraining order prevents law enforcement, state and local government officials from enforcing the ban on the Internet Sweepstakes parlors that was passed by North Carolina’s supreme court in December with the ban going into effect in January.
The restraining order prevents the law from being upheld and raises many questions as to how an Internet software company was able to file a restraining order against Governor McCrory and the State of North Carolina. When the company itself is the one being called into question for violating the law.
After the restraining order was filed in January, a hearing took place on February 4th where Superior Court judge Robert F. Johnson heard arguments that involved Governor McCrory and Sheriff Grice who were mentioned in the restraining order.
The Grandfather of gambling
ITT is one of the main companies controlling the online gambling industry in North Carolina, with the company being called, "The grandfather" in the Internet gambling world. Alexander P Sands III is the chief lobbyist for ITT in N.C and was voted a super lawyer like many others who represent the gambling industry.
He is one of the people that McCrory referred to as those who increase the loopholes to make the gambling legal. But what makes things interesting is how ITT's plans for the gambling industry contradict one of McCrory's key promises.
In 2008 Governor McCrory signed a no tax pledge promising not to raise taxes at all. What his inaction towards the parlors suggest is a support for taxation of the gaming industry which violates his no tax pledge.
The form that Mr. Sands signed with the Secretary of State’s office says that ITT is a company that is involved in, “Government, taxation, financing, revenue, budget, appropriations, bids, fees, funds.” Not job creation and helping to improve the economy as some would have you think.
Much has been said about how shutting down the gambling parlors will hurt North Carolina's economy. But the question that needs to be asked is how can a software company that is based in Texas and registered as “Foreign” with the N.C Department of State really benefit the needs of the state? If S.A.S were based in another state would anything be said of it's positive impact on our economy?
A look inside
Inside the parlors you can find many of the poor and unemployed who spend most of their time and money gambling away what little they have.
The locations in Raleigh also have indoor smoking in a separate section, which violates city law that bans indoor smoking. With the exemptions being for private clubs and cigar bars.
In order for the Internet parlors in Raleigh to operate legally with indoor smoking they would have to be a private club. Not a public place of gambling that is open twenty-four hours a day, seven days a week.
When the parlors first opened in 2009 at the peak of the recession, much was said about how shutting them down would cost jobs for N.C and would increase the state's high unemployment rate.
But the diatribe that the gambling parlors create jobs for North Carolina is inaccurate as some of the workers were let go and replaced by new employees after the recent ban. Meaning that the gaming industry’s top priority is not to create jobs for North Carolina nor improve its economic state but rather to view both as expendable.
Elected officials from both parties who supported the parlors viewed them as a way to gain revenue that was much needed by the state. But critics argue that this profit comes at the expense of the poor and the elderly. As they are the main people who frequent the parlors.
Keeping their distance
State officials have kept their distance from this issue, with U.S Senator Kay Hagan who is up for re-election in 2014 declining to offer her opinion on the parlors in a press conference. Calling the Supreme Court’s decision a “State issue that should be left up to the courts.”
In effect, having the same view as Republican Governor McCrory and former Lt. Gov Walter Dalton who gave the same answer in a Gubernatorial debate from last October. Meaning that no elected official has taken a stand against the parlors in spite of their rhetoric that calls for them being shut down.
Three lobbyists from the law firm of Moore & Van Allen registered with the NC Secretary of State’s office to represent IIT in lobbying the North Carolina government. While Governor McCrory was never a lobbyist for IIT, the situation involving the law firm that he worked for supporting the industry creates a conflict of interest for the Governor.
The relationship between the gaming industry and the State of North Carolina is intriguing. As many of the people who do win big cash prizes have to sign a form reporting their additional income to the federal government.
One woman won nearly $2,000 from a parlor near Johnston county only to have her winnings taxed as extra income that was not reported to the Government.
Which led to a loss of nearly $1,000 on her income tax returns. This indicates a serious business relationship between the tax industry and the gaming industry. But while big money fuels the industry for gaming, there are no vocal opponents in power against it except for the N.C Sheriff's association.
When the ban was first being discussed the supporters of the gambling industry considered it an issue of free speech, and that businesses were being denied their first Amendment rights. But while the legal debate continues as Governor McCrory says, "People are hurting across North Carolina." and the suffering will not end as long as they remain open in violation of the law.