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Video sweepstakes tax will save K-12? There’s no golden horse

By Jeff Jackson
Special to the Observer

She doesn’t have a chance.

When a young mother sits down at a video sweepstakes machine, she isn’t gambling, where a little probability analysis can come in handy. She – and, by extension, her family – is being robbed, slowly but surely.

These gaming machines, first outlawed in 2007, then re-outlawed in 2010, determine the result of the “game” before the player ever touches a button.

Sometimes, there isn’t even an illusion of gamesmanship. You hit a button. If a golden horse pops onto the screen, you win. If not, you lose.

Never seen a video gaming establishment? Picture a dimly lit trailer filled with a dozen dark consoles with grainy monitors (that generally don’t show a golden horse). Picture a tiny convenience store with a seedy backroom where customers sit for hours, throwing away their paychecks.

Just don’t picture Caesar’s Palace.

A few months ago, the N.C. Court of Appeals overturned the ban on video gaming, calling it “unconstitutionally broad.” In an effort to apply to the widest range of video gaming machines, the law had prohibited “the reveal of a prize” by use of “an entertaining display.” In short, the court held that freedom of speech protects the use of an “entertaining display” – that being the elusive golden horse.

The state Supreme Court is set to hear the case this fall. In the meantime, some members of the General Assembly are attempting to legalize video gaming in order to generate tax proceeds to fill a gap in education spending.

Gov. Bev Perdue, who says she opposes video gaming but supports the tax, estimates the tax could generate up to $300 million.

You can argue that this legalize-and-tax plan is impractical, because owners of video gaming machines will find ways to dodge the tax. After all, they can be a dodgy bunch.

You can argue that its revenue assumptions are overly optimistic, just as we saw with the state lottery.

But here’s the simple argument: It’s just wrong. We know that these gaming machines target low income communities. We know that gambling is an addiction and that companies design these machines to exploit that weakness.

We also know that these machines are wildly profitable. It’s not uncommon for an establishment to clear $10,000 in a weekend.

That’s money flowing directly out of the wallets of families who live on tight budgets. Even if every dollar goes to K-12 education, the inevitable result will be to punish the children of adults who can’t stop pushing the button and hoping to see a golden horse.

Textbooks at school aren’t as important as dinner at home.

This plan was birthed partly out of the legislature’s frustration in having twice tried and failed to craft a law that got the job done. Assuming the Supreme Court sides with the Court of Appeals – and it may not – the appropriate response isn’t to declare Mission: Impossible.

The right thing to do is the hard thing to do. Go back to the drawing board. Write a new law with a cleaner approach to the problem.

Let’s tell the legislature to back away from the machine. In the real world, there is no golden horse.

Jeff Jackson is a Gaston County assistant district attorney.

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