North Carolina lawmakers are considering a draft casino bill that would allow one business to develop three casinos statewide. But campaign contributions to lawmakers from executives of the Baltimore-based casino development firm, The Cordish Cos., have raised concerns about “pay-to-play” scenarios, whereby parties fund specific business activities.
“It could be the tip of the iceberg of the money that is falling into political campaigns and dark money operations that will be or have been funding General Assembly candidates and politicians,” said Bob Hall, the former executive director of Democracy NC. But “it’s not illegal,” he said.
Campaign committees of at least eight lawmakers received a total of $34,400 from at least four donors linked to The Cordish Cos. from November 2022 to March 2023, according to the disclosures filed with the N.C. State Board of Elections and the Federal Election Commission. Campaign finance analysts and other critics have questioned whether the donations could give The Cordish Cos. an unfair advantage in developing the casinos.
But receiving campaign contributions from out-of-state donors with economic interests in potential legislation is not illegal, and candidates can accept up to $6,400 per election from each donor in contributions. The limit was $5,600 when donations were made in 2022.
Christopher Cooper, a professor of political science and public affairs at Western Carolina University, argued that the campaign contributions may not necessarily provide the company with an unfair advantage.
House Speaker Tim Moore said the casinos would be in Anson, Nash and Rockingham counties, according to WRAL. The exact locations are not publicly available yet. Senate leader Phil Berger, who represents Rockingham County, received $5,600 in November 2022 from Joseph Weinberg, CEO of Cordish Gaming Group and Cordish Global Cities Entertainment.
NC Development Holdings, which WRAL reported is connected to The Cordish Cos., requested a rezoning of almost 200 acres in Rockingham County in June. If the request is approved, the area would be open to a variety of commercial uses.
WRAL’s reporting found NC Development Holdings’ principal office had the same address as Cordish Cos. CPP used the N.C. State Board of Elections database and the Federal Election Commission database to track donations made to political candidates. CPP identified at least seven other North Carolina lawmakers who received campaign contributions from executives or individuals linked to The Cordish Cos. dating to November 2022.
Jon Cordish, principal and director of finance at The Cordish Cos., Chief Operating Officer Zed Smith and Rhonda Smith, a homemaker who has the same listed address as Zed Smith, also made donations.
A donor named “Zeb Smith” gave $2,500 to Rep. Larry Strickland, R-Johnston with the same listed address as Zed Smith. CPP could not independently confirm if this was a typo or a new individual.
Rhonda Smith gave $2,500 to Sen. Todd Johnson, R-Union/Cabarrus. Jon Cordish gave $2,000 to the American Israel Public Affairs Committee Political Action Committee and earmarked the funds for U.S. Rep. Kathy Manning, D-6th District. Earmarking funds allows the PAC to act as a conduit for the donation.
NC lawmakers consider proposing four new casinos
North Carolina lawmakers are considering proposing four new casinos and video gambling machines in the state. This debate is taking place at a time when the General Assembly is still negotiating on a state budget, more than three weeks into the new fiscal year.
Berger also said to WRAL that the concept for the casinos is to be part of larger entertainment districts with hotel, residential, commercial, and office-industrial elements. The development of these entertainment centers would create more jobs locally, he said.
CPP reached out to Berger for comment but did not receive a response.
The bill’s language hasn’t been introduced in the General Assembly yet, so House lawmakers haven’t seen the final proposal.
Qualifying counties, according to the draft bill, would have a population below 100,000 and would fall under one of the 40 most economically depressed counties.
“They see it as a way to really spur the economy of the region,” Moore said to WRAL, referring to House lawmakers.
Professor Cooper said the reason for this policy being proposed now has to do with neighboring states.
“People who are gambling are going to do so in Virginia anyway, so why not bring those economic benefits to North Carolina? That’s their pitch,” he said. “Timing is important in public policy, and it’s about getting people to care about the issue.”
The locations that have been proposed will bring economic benefits to areas that are economically depressed, according to Cooper.
Map: The map shows the location of casinos operating in the state in green and casinos being proposed in the draft casino bill in dark blue. Source of data: American Casinos Guidebook and Bill Draft 2023-BAxf-S [v.4]
While casinos are seen as a solution to revive economically distressed areas, they can also have long-term consequences on rural communities and communities of color who reside in the areas where they are built, according to an academic study.
In fact, people who live near a casino are twice as likely to become gamblers than people who live more than 10 miles away, according to the Institute for American Values. Several studies that were reviewed by the Institute for American Values showed that between 40% and 60% of casino revenue came from problem gamblers. As a result, local economies may become weaker as local residents turn to gambling.
Last month, Gov. Roy Cooper legalized online sports betting in the state starting next year. North Carolina lawmakers are also considering legalizing video gambling, as legislators have long tried to regulate the state’s illegal video gambling industry.
So far, the draft bill does not warrant a referendum in the counties or communities where the casinos are being proposed. But locals will have a say, Berger said, and can vote through a governing body that may include county commissioners. Some anti-gambling groups in the state recently sent out digital ads to mailers and put up online ads that say, “North Carolina is no Las Vegas.”
“In Rockingham County, one of Sen. Phil Berger’s sons sits on the County Commission, and we know that politicians try to bring the bacon home to their district,” Cooper, the professor, said. Kevin Berger serves as a commissioner on the Rockingham County Board of County Commissioners and has expressed support for a casino in the county for years.
Starting Sept. 1, the secretary of administration will begin accepting proposals over a 60-day period from companies with 10 years of experience in the commercial gaming industry that can invest $1.5 billion or $500 million at each location and add 5,250 jobs. The secretary of administration will recommend a company to the secretary of commerce.
There are two casinos currently operating in North Carolina on the Eastern Band of Cherokee Indians land in Western North Carolina and another on Catawba Nation land off Interstate 85, near the South Carolina border.
Greater Carolina, described on its website as a group of “forward-thinking, pro-free market conservative leaders” in North Carolina, commissioned Spectrum Gaming Group to study potential gambling revenue. The nonpartisan consultancy found that the three proposed casinos could make $1.5 billion in gross gaming revenue three years after their launch.
The draft bill also outlines fines if the company doesn’t meet the investment or job requirements. While it doesn’t include video gaming terminals or video lottery terminals, the legalization of slot-machine games is also under debate as part of this proposal, according to Moore.
A closer look at business influence in NC lawmaking
While campaign contributions to North Carolina lawmakers from individuals involved with The Cordish Cos. are not illegal, they do raise questions about how much influence business interests wield, experts and analysts say.
“It’s a pay-to-play scheme, and the system itself is corrupt,” said Hall.
“They put a lot of money behind their requests to get attention and overcome the hesitation of legislators,” he said, referring to businesses and companies who make campaign contributions. “That corrupting dynamic leads the leadership into compromising and bringing proposals to the members of their caucus.”
Hall filed a complaint in May with the N.C. State Board of Elections alleging campaign finance malfeasance by the video poker industry. In his complaint, he requested the Board of Elections investigate $885,000 in contributions from the video poker industry to candidates and party committees from 2019-22.
He said North Carolina has a history of the gambling industry putting hundreds of thousands of dollars into political donations.
“Whether it’s Republican leader Phil Berger now or Democratic leader Jim Black 20 years ago, they’re urgently looking for a huge amount of private money to finance their members’ reelection,” Hall, the former director of Democracy NC, said. “The video poker and gambling industry is literally a cash cow—with plenty of cash to throw into politics and push its schemes forward, even when they are dangerous to the common good and public interest.”
Professor Cooper believes that the campaign contributions don’t unfairly benefit The Cordish Cos. or individual companies.
“It’s hard to show true pay-to-play because organizations that donate money give it to the people who are likely to support them,” Professor Cooper said. “I think the campaign contributions are strategic investments in getting access to and helping to set the agenda for legislators.”
Michael Bitzer, a professor of politics and history at Catawba College, views the campaign contributions as typical interest-group lobbying.
“If there is a specific demarcation of that particular business or company and the legislation, then it would be seen as pay-to-play,” he said. Bitzer said that unless there’s a direct connection between the business and the legislation, it won’t be seen as pay-to-play. He expects an administrative agency to handle casino development bids.
“It doesn’t mean it’s evil, wrong or illegal,” Cooper said, “but it is worth paying attention to.”