Palmetto Public Square

by Bill Connor, guest blogger
The often controversial Sen. Robert Ford of Charleston recently announced that he will run for governor in 2010 on a platform centered on bringing back video poker.

Sen. Ford has said that his gubernatorial bid would be different because he believes bringing back and taxing video poker will provide South Carolina with the money it needs to serve the state’s neediest while keeping taxes low.

Sen. Ford claims video poker will solve South Carolina’s woeful financial situation, generating $750 million by taxing the industry that was outlawed here nearly a decade ago. After reviewing Sen. Ford’s appeal for video poker, I had to ask myself: How can a State Senator be so passionate about a quick, yet ultimately detrimental, short-term gimmick? Leadership means looking beyond the “now” of the superficial gains to the “future” of second and third order effects. This includes economic leadership. 

As Henry Hazlitt put it best: “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy.”

A true leader will not stay lost in a forest, looking to cut down the next tree to claim “progress.” A true leader climbs a tree to see the whole forest, develops a vision for getting out, and leads people toward that long-term vision. 

Before I touch on the long-term issues involved with video poker, let me correct Sen. Ford’s short-term numbers, as they don’t reflect the reality of economics. He states that video poker was a $3.5 billion business before being banned in 2000. Sen. Ford goes on to claim that he will tax 25 percent of the gross revenues (that is, in addition to the previous $62 million in fees) to make $750 million for the state. 

Does anyone really believe video poker would generate $3.5 billion (to tax) if the state plans to take not only fees, but 25 percent of that gross revenue? People in the video poker business aren’t stupid and they certainly aren’t in business to help the people of South Carolina. They are in it for the profit. Additionally, if 84 percent of people playing the game are from out of state, as Sen. Ford claims (he uses this statistic because he knows the public at-large recognizes that video poker is harmful to South Carolinians), then why would any competent businessman set up video poker here and not elsewhere?

Under Sen. Ford’s plan, in order for South Carolina video poker owners to pull in a decent profit, they would have to lessen patron winnings (or cheat their players!). That, in turn, would bring in fewer patrons, particularly those tourists and non-South Carolinians who can play elsewhere. The state would then either have to drastically lower the tax percentage or deal with a drastically reduced market.

Now for the long-term issues: Sen. Ford writes those that oppose video poker “think they have the right to be ‘Big Brother’ and tell us what is good for us.” 

To answer Sen. Ford’s “big brother” criticism: To some extent, all states legislate morality for the purpose of protecting the general welfare. For example, most states outlaw prostitution, even though prostitution is seemingly a matter of personal choice and consequence.

As with video poker, our state could—for argument’s sake—legalize, and then tax the gross revenues of prostitution. Presumably, those opposed to allowing prostitution would then be criticized for not allowing a consensual business that brings in revenue. As in Amsterdam, our state could also—again for the sake of argument—allow hard drugs to be sold over the counter and tax those revenues.  If it’s the personal choice and responsibility of the person buying drugs, well then, why not allow it and tax the users?

Yet we all know the answer to this question. We all know why states shouldn’t cross those lines. Moral issues do affect the welfare of the state and, consequently, all the people in that state. Similar to prostitution and drugs, video poker does not just affect those playing the game. In places like Las Vegas, for example, legalizing morally questionable practices like gambling has changed the essential character of the locale.

Beyond these basic moral issues, the second and third order effects of gambling are often organized crime, gangs, and drug/alcohol abuse. Legalized gambling would draw people to South Carolina for the wrong reasons and detract from the reason why so many like to visit and reside in our state: South Carolina is a uniquely historic AND morally traditional state. 

Our state is grounded in Biblical principles. And while so many other states are drifting away from the founding principles of America, these are the moral principles that will sustain and guide South Carolina in the years to come.

Sen. Ford is wrong. Legalizing gambling in order to address South Carolina’s revenue needs is not the answer. In these difficult economic times, our state needs to move forward—not fall back into old traps. Video poker would be just one more problem for South Carolina. It is not the solution.

Bill Connor is an attorney with Murphy and Grantland law firm in Columbia. In May 2008, he returned from a yearlong combat deployment in Southern Afghanistan. During that time, he served as Joint Operations Officer for the Southern Region of Afghanistan developing and implementing the US advisory effort for Afghan National Security Forces.

(Note: Since this article was written and accepted for publication on Palmetto Public Square, Mr. Connor has announced his candidacy for Lt. Governor. Palmetto Family Council does not endorse candidates for office.)