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NC’s budget derailed by GOP’s push for new casinos. Why do some lawmakers want them?

Alex Slitz/alslitz@charlotteobserver.com

A controversial push by GOP legislative leaders to expand state-sanctioned gambling in North Carolina in this year’s long-awaited state budget derailed negotiations this week, pushing votes on the nearly $30 billion spending plan until at least next week.

The proposal to approve the opening of new casinos on non-tribal lands, and legalize and regulate thousands of video lottery terminals (VLTs) across the state, became a major sticking point between the House and Senate this week. But top Republican lawmakers have worked on and discussed it behind closed doors all summer.

Senate leader Phil Berger, a chief proponent of casino expansion, insisted throughout the summer that Republicans include casino and VLT legislation in the budget, and stood firm on that position when House Speaker Tim Moore reported this week that he didn’t have the votes to pass the months-late budget if it contained the contentious proposal.

Some House Republicans have said they fundamentally oppose expanding gambling in the state, echoing the concerns of several residents in counties that have been mentioned as possible sites for future casinos, who have said they fear what the introduction of casinos will do to their largely rural neighborhoods.

Others have expressed frustration with the process by which the proposal has been crafted. If it were to be included in the budget, for example, the casino legislation wouldn’t be heard on its own in any committees, and wouldn’t get its own discussion or votes on the House or Senate floors.

What does the proposal include?

It’s not clear what the latest version of the proposal includes. In July, Republican leaders said they were looking at approving up to four new casinos: three in Anson, Nash and Rockingham counties, and a fourth to be operated by the Lumbee tribe.

They also said the proposal would likely include provisions to legalize and regulate the operation of video lottery terminals under a permitting process under the supervision of the state’s lottery commission, as one lawmaker, GOP Rep. Harry Warren, proposed back in May.

In late May, Moore said that the casino bill could create full-fledged “entertainment districts” that would include commercial developments such as retail shops, restaurants and hotels, in addition to casinos, to help boost the economies of some of the state’s poorest areas.

A draft casino bill was obtained and reported on by WRAL in July, but Moore and Berger have both said that there were multiple versions of bills floating around this summer.

This week, Berger said lawmakers were back to debating and discussing a single proposal.

How would the VLT proposal work?

State lawmakers and law enforcement officials have tried to crack down on illegally operated video lottery terminals, also known as video gambling machines, for several years.

Earlier this year, a House committee held a discussion-only meeting to study Warren’s bill to legalize and regulate the operation of these machines, which are scattered across the state and typically found at sweepstakes parlors and gas stations.

During that committee meeting, Warren said it was difficult to determine how many machines were currently being operated in the state, but said that he had heard of estimates between anywhere from 60,000 to 100,000.

Warren said that trying to shut the machines down had proven to be ineffective, and that instead, it would be prudent to recognize there was demand for video poker and fish games. Under Warren’s bill, operators granted a license from the state lottery commission would be allowed to operate VLTs at bars, restaurants, and other businesses with ABC permits, provided that they follow rules set by the commission.

It’s unclear if Warren’s bill, which did not move forward in the House, reflects what has been included in the GOP’s broader gambling proposal.

How many casinos currently operate in NC?

Three casinos currently operate in the state, all on tribal lands in the western part of North Carolina. Two are owned by the Eastern Band of Cherokee Indians, and one by the Catawba Indian Nation.

Why do lawmakers want to expand gaming?

Berger and Moore have both pointed to the opening of multiple casinos in Virginia, particularly a Caesars casino resort in Danville, just an hour-and-a-half north of Raleigh, as the impetus for this summer’s push to give developers the green light to open new casinos in North Carolina.

The Danville casino has already opened a temporary facility while the full resort is completed ahead of an opening scheduled for next year. The GOP leaders have said that could end up luring significant revenues and tax dollars out of the state, if North Carolinians flock across the state line to a venue that is much closer to the Triangle than the tribal casinos west of Charlotte.

At the same time, the gambling industry has launched a substantial effort through campaign contributions and the hiring of powerful lobbyists to try to influence decision-making in Raleigh.

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Why has the proposal delayed the budget?

Lawmakers originally planned to hold votes on the nearly $30 billion budget this week, but decided to push them back until at least next week, after negotiations between Berger and Moore appeared to break down on Tuesday.

Moore announced on Tuesday that after another lengthy caucus meeting on Monday evening, House Republicans had reached an impasse, with 30 of the caucus’s 72 members saying they would not vote for a budget that included casinos and VLTs.

Berger told reporters he had believed House Republicans only needed to secure a majority of their caucus’s support to put the budget on the floor for a vote, and said he was surprised by Moore telling his members in an email last week that a budget would not move forward unless it had the support of 61 House Republicans.

The majority-of-the-caucus standard is often used to gauge when there’s significant support for a bill to advance, but as Moore pointed out on Tuesday, only having 42 Republicans on board would require at least 19 Democrats to vote for a budget including casinos, for it to pass.

Berger said he felt Moore had moved the goalposts, and insisted on Tuesday that the casino legislation — a priority for the Senate — would have to be included in the budget.

After the standoff, Moore and Berger were expected to meet on Wednesday to discuss how to move forward.