Political donations, land deals, lobbyists and a question: Will NC lawmakers move ahead with casino plans?
Late last year, executives of a Maryland-based casino developer did something curious: They made donations to lawmakers in North Carolina, a state where commercial casinos are not legal.
The contributions — ranging from $2,500 to the maximum allowable $5,600 — weren’t enormous sums in the grand scheme of the company, the gaming industry or big-money politics. But they were eye-catching because they came long before state lawmakers had publicly uttered word one of a possible proposal to legalize casinos outside of tribal lands.
The offerings were among the first financial bets on a major expansion of legalized gambling in the state, beyond an eventually successful effort to allow sports betting on mobile devices. And they, along with other recent actions by gaming companies and elected officials, have raised questions about who knew what — and when — about lawmakers’ intentions this legislative session, and whether the public would have any say in the matter.
In the months since those donations, a behind-the-scenes battle has emerged. Gaming companies have hired a raft of lobbyists to push for their interests. Dark money groups have sprung up in opposition mailing fliers and taking out digital ads. Economic development consultants have analyzed the viability of more casinos in the state. Campaign advisors have gauged public opinion. And cities, counties and casino developers have tied up land anticipating the legalization of more betting locations.
All this, and yet no casino proposal has been filed publicly, debated in a single committee or, according to House Speaker Tim Moore, even vetted by the Republican caucus in the House.
But draft legislation, first obtained and reported by WRAL in July, is out there. It proposes the creation of three casino districts in economically distressed counties that meet select criteria to be developed by a single company that must commit at least $500 million to each site. Anson, Nash and Rockingham counties are represented by some of the Republicans who received donations from The Cordish Cos., the Maryland casino developer.
Mark Walker, a Republican gubernatorial candidate who represented Rockingham County in the U.S. House, recently hosted an event in the county where Cordish, through a North Carolina-registered holding company, wants to rezone land. Some of the 500 people who showed up were upset with the location, near a camp for people with disabilities, Walker said. Others didn't want gambling at all and are worried about the impact of its addictive nature.
"The underlying theme of all of it was frustration about the lack of transparency," Walker said. "This sense that it's already decided and there's nothing you can do about it."
The casino proposal, along with related legislation to allow video gaming terminals across the state, could end up in the legislature's long awaited conference budget. That would require an up-or-down vote without any amendments or changes.
Or it could not.
The House, with a mix of Republicans and Democrats, voted down sports gambling legislation last year after a dogged effort to get it passed. Resistance from conservatives, Democrats, some county officials and others wary of another expansion of gambling could cause lawmakers to hold off.
A poll of 500 North Carolina Republicans and independent voters, done by GOP strategist Andy Yates on behalf of several political clients, found 33% of voters supported developing "at least four new commercial casinos that will offer Las Vegas-style gambling." More than 52% were opposed.
A poll of 1,000 North Carolina residents by gambling website NC Sharp found 45% support casino expansion, with 29% opposed. The poll, published earlier this month, found 68% of respondents worried about an increase in addictive gambling behavior.
The first signs
Under a draft proposal obtained by WRAL, the three small North Carolina counties — all of which lost population in the previous decade — could be in line for massive outside investment and an influx of tourism dollars. Anson, Nash and Rockingham counties would be allowed to develop entertainment districts, anchored by casinos. A single developer would be responsible for all three casino districts.
The projects must meet certain benchmarks on investment and job creation under the Rural Tourism Incentive program, created by the legislation. The casinos would pay 22.5% tax on gross gaming revenue. The districts are envisioned by legislative supporters as destinations with hotels, restaurants and other businesses.
A fourth casino controlled by the Lumbee Tribe in southeastern North Carolina is also outlined in the legislation, but it is separate from the other three. There are currently three tribal casinos in North Carolina, two run by the Eastern Band of Cherokee Indians and a temporary facility run by the Catawba near the South Carolina border.
"An investment of at least $1.5 billion, job creation of 5,200 jobs with no taxpayer dollars going into it — and, in fact, tax dollars coming to local communities and the state — just struck me as kind of the sweet spot,” Senate leader Phil Berger said.
It was Berger who received the first $5,600 donation from Joseph Weinberg, the chief executive of Cornish’s gaming unit, on Nov. 3, 2022, according to campaign finance reports filed with the state.
Weinberg also donated $5,600 to key House Republicans Jason Saine and John Bell on Nov. 7. Saine is the chairman of the finance committee and the leader on the online sports gambling legislation. Bell is the majority leader.
Weinberg donated $5,600 to Sen. Lisa Barnes in December.
Zed Smith, Cordish’s chief operating officer, donated $2,500 to House Republicans Larry Strickland and Kyle Hall and Sen. David Craven in November and December. His wife, Rhonda Smith, donated $2,500 to Sen. Todd Johnson in November.
All the recipients are Republicans. Some are among the most powerful lawmakers in the legislature, several serve as budget chairman, but others are not obvious candidates for donations.
Except for where they represent: Berger represents Rockingham County. Barnes represents Nash County. Craven represents Anson County,
Lawmakers say the donations don’t come with strings attached.
“Senate Republicans receive contributions from thousands of individuals each cycle,” said Dylan Watts, director of the NC Republican Senate Caucus, in a statement to WRAL. “Contributions to campaigns are not conditioned on supporting or not supporting a policy matter. Sen. Berger does not even allow policy matters and campaign contributions to be discussed in the same conversation."
Cordish didn’t respond to messages seeking comment. The group, which developed the Sport & Social bar in Cary’s Fenton development, has 10 main lines of business, including entertainment districts, gaming, hotels, residential, restaurants and sports-anchored districts around ballparks or arenas.
“They’re a group that’s interested in doing some business here in North Carolina,” L.T. McCrimmon, a lobbyist for NC Development Holdings, which is owned by Cordish, previously told WRAL. “They’re an upstanding group.”
Loading up on lobbyists
Saine was the lead legislator on a bill to legalize online sports betting in the state. The effort took more than two years in the legislature with more than a dozen committee meetings, loads of amendments and several floor votes before passage. Sports betting will start in North Carolina in the first half of 2024.
Saine appeared in March at "The State of Gaming in the State" symposium at a Cordish casino in Maryland. His costs were covered by The Center for American Ideas, according to Saine's 2023 statement of economic interest form. The Center for American Ideas says it seeks to promote ideas that “enhance prosperity through personal empowerment and limited government.”
The group also paid for Barnes, who represents Nash County as part of her district, to attend a symposium on the same date, according to those public documents.
Saine, who is not a sponsor of the casino proposal, said it is no secret that he supports gambling expansion.
Barnes said the rural tourism districts “will be a huge economic boon for Nash County and the surrounding region, creating thousands of good-paying jobs and generating millions of dollars of new revenue without taxpayer-funded incentives. The new revenue can be used for schools, public safety, infrastructure, and other local needs.”
Barnes, a former Nash County commissioner, said more information about the proposal “would be beneficial.” “I am working to make that happen,” she said. “Those discussions remain ongoing but I am hopeful that we will be able to consider a proposal this year.”
Rocky Mount mayor Sandy Roberson also attended the March event at the Cordish casino. Roberson, a proponent of bringing an entertainment district to Rocky Mount, said he spoke with the Maryland governor and lawmakers from Pennsylvania about the benefits of gambling for local communities.
"It was very insightful to me," Roberson said.
Roberson said the city of Rocky Mount has secured options to purchase land around a potential casino site, which would be handed over to a developer eventually. He said it is common for localities to secure “site control” when trying to recruit industry for economic development.
The legislature’s draft legislation calls for the secretary of administration to begin taking proposals on Sept. 1 for 60 days. The secretary would have 60 days to "select a business to be its binding recommendation" and forward that to the secretary of commerce.
"We've been talking to someone who has the ability and the capability to do it," Roberson said, without naming the developer. "I know that Cordish is going to be one of the companies [that applies]."
Cordish and its subsidiaries have hired several well connected North Carolina lobbyists, including former state Commerce Secretary Tony Copeland, former Raleigh Mayor and former state GOP chairman Tom Fetzer, his sister Susan Fetzer Vick, former Berger general counsel Tracy Kimbrell, and McCrimmon, a former Gov. Roy Cooper staffer.
Other casino developers have hired lobbyists in the state. Chicago-based Casino developer Rush Street Gaming has hired three lobbyists. Las Vegas-based Golden Entertainment, which has nine casino resorts in Nevada, has also hired a lobbyist. A number of companies with ties to the video gambling industry have also hired lobbyists in the state.
Critics have pushed back against the one developer provision, saying it would violate the “perpetuities and monopolies” section of state’s constitution.
"With one company managing all three sites, whoever the company ends up being, you would have some consistency in terms of quality, some commitment to the state that's a little broader than you've got one company here and one company there and one company there," Berger said in explaining why the provision is in the draft legislation. "I don't know that you'd have the unevenness that's likely if you have multiple entities there."
The Yates poll found that 67% of those who favor developing casinos would be opposed if the legislation "would only allow one company to operate the casinos and there would be no competitive process to allow other companies to participate."
‘No big secret’
The thought of expanded legalized gambling in North Carolina isn’t particularly new.
Several years ago, the North Carolina Lottery Commission paid a consultancy, Spectrum Gaming Group, $450,000 to produce four surveys about various aspects of gambling in the state. One, dated March 16, 2020, "determined that North Carolina could support up to nine casinos," even with Virginia opening casinos along the border.
The group placed its assumed casinos in large population centers or tourist destinations around the state: Raleigh, Durham, Winston-Salem, Asheville, Wilmington, three in the Charlotte area and Southern Pines as a golf destination
In the fall of 2022, Greater Carolina, a North Carolina-based conservative group promoting free-market policies, commissioned its own survey from Spectrum Gaming to estimate total revenue potential from sports betting, video lottery gaming and commercial casinos.
Unlike the previous study, this one focused on three specific, less-populated locations for the casinos: Anson, Nash and Rockingham counties.
"We thought less sites, outside of existing tribal casino monopoly zones and in places where they had the potential to spur rural economic development might be more realistic," Greater Carolina Chairman Joe Burleson said in written responses to questions from WRAL.
The survey was released March 22, 2023.
Spectrum found that the casinos would generate $1.6 billion in annual revenue with $420 million in state tax receipts at a 25% tax rate. The assumption in the survey was that the three casinos would be the only expansion of gambling in the state. It is unclear what adding mobile sports gambling and video lottery terminals, the other forms of expansion considered by the survey, would do to the casino revenue number.
In mid-April, some lawmakers told reporters that they were open to discussions about casinos. In late April, citing the impact of Virginia casinos, Berger said it was worth exploring the casino issue.
"I'm endorsing the idea that there are things that we should be concerned about in the context of what's happening in Virginia with casinos being located along the North Carolina border," Berger said at the time. "I think it's something that we need to be aware of, need to explore whether there are some alternatives for us to deal with."
In June, Moore confirmed the potential locations of casinos — as the same ones in the Greater Carolina survey and the same ones represented by lawmakers who received donations from Cordish.
"No big secret. Those are communities that have been talked about," Moore said on June 1 when asked about those three counties by WRAL.
From 2010 to 2020, North Carolina's population grew by nearly 10 percent, but 51 of its 100 counties experienced a population decline during that period according to Census data. Anson County saw its population decline by nearly 5,000 people over the decade, losing 18% of its population. Nash and Rockingham counties experienced smaller declines.
The counties in the far western part of the state saw population growth. Jackson County, home to one of the Cherokee casinos, grew by 7%. Cherokee County, home to the other casino, grew by nearly 5%. And the counties around them grew as well.
"Look at what gaming the Cherokees have been authorized to engage in has done to that part of the state, a part of the state that had been as far as development is concerned had been just stubbornly stuck in a no-growth mode," Berger said. "For me, putting the rural tourism districts in rural communities, that's a huge part of it."
Opposition emerges
As proponents of additional casinos were moving behind the scenes, so too have opponents, sometimes anonymously. And some opponents are conservative groups and leaders, which could complicate things for Republican leaders in the legislature.
The Coalition to Stop Reckless Gambling created a website that asks supporters to sign a petition, claiming legislation to "create new casinos and slot machines in thousands of mini-casinos on every Main Street" would "bring easy-access gambling near our schools, our churches, our grocery stores and our homes."
The group has a meager Facebook following, but it placed at least 37 Facebook ads and sent text messages, pushing recipients to sign the petition. It also created a 30-second ad.
A similar website paid for by the group also is opposing gambling expansion in Missouri. It ran more than 50 Facebook ads with a similar feel to the North Carolina ones.
Whoever is behind the group isn’t obvious. The Facebook page doesn’t have an author, its ads reference a Montana address but give no street address and it lists a Raleigh phone number that is registered to a recording studio. No one responded to messages left at that number.
Unlike Greater Carolina, which has filed tax forms and hosted fundraisers in the state that have garnered press accounts, the Coalition to Stop Reckless Gambling has not. WRAL received no returned messages from several emails sent to addresses on their websites.
Faith Wins Action, a group out of South Carolina, sent mailers in opposition to the proposed legislation. The group's website says it is "engaging Christians in the public arena." One called on recipients to call and email Saine to oppose three bills, including his own sports gambling bill.
South Carolina pastor Chad Connelly is the founder and CEO of Faith Wins, but says he is not associated with Faith Wins Action. They are separate groups with separate tax filing status.
Connelly wrote a letter to legislators about the potential gambling legislation, writing in part: "The Swamp has come to Raleigh." He was joined by four other authors, including the CPAC senior vice president and the North Carolina Director of Awake America.
"The budget bill is the result of backroom dealings where only select special interest groups had the privilege of negotiating,” the letter said. “If North Carolina is to expand gaming, it should do it outside the budget negotiation, and not subject the state to a lobbyist-created monopoly. We are strongly against haphazardly promoting new streams of revenue that could adversely affect North Carolina voters, especially those in poorer communities where these casinos and video lottery terminals are being proposed without the proper risk assessment."
Paul “Skip” Stam, a former high-ranking state Republican lawmaker, has sent letters to Republican and Democratic lawmakers raising objections, including multiple constitutional issues.
North Carolina faith leaders and groups have, likewise, pushed against the proposal. Tami Fitzgerald, the executive director of the NC Values Coalition, said in a letter to lawmakers that “turning to gambling to offset anticipated revenue losses [from reduced taxes] is socially irresponsible and fiscally questionable.”
Gov. Roy Cooper, a Democrat, made a similar argument about using gambling revenues to fund sharper tax cuts. He also questioned the possibility of approving it through the budget. “This is the kind of thing that should be run separately,” Cooper said. “It should not be in the budget."
Rep. Pricey Harrison, D-Guilford added: “It’s terrible policy that is so odious to so many people, they want to bury it in the budget so members don’t have a choice. It’s offensive to me to put something in the budget.”
Republicans, who hold super majorities in both chambers, have not made a final decision on whether or not to include the casino proposal in the budget, Moore and Berger said.
County-level debate
While lawmakers debate the merits of the possible proposal, debate continues in the areas targeted for new casinos.
The Rockingham County zoning board voted 5-2 against the rezoning request from NC Development Holdings. The full county commission will consider the request at its Aug. 21 meeting. Berger's son, Kevin, is a Rockingham County commissioner.
"These folks who work and live with their families in these conditions, not a bunch of millionaires, deserve the right to say what we want in or what we don't want in our community," said Walker, the former congressman. "It's about raising their family in a place they feel safe and a way of life that they appreciate and has been handed down."
In Nash County, commissioners passed a resolution in late July saying that they are opposed to locating a casino in the county without a referendum by voters.
But Roberson, the Rocky Mount mayor, said it is a Rocky Mount project and that it could play a major role in addressing economic concerns in the area, including unemployment that is higher than the state average.
"Frankly, I don't see a whole lot of downside," Roberson said, referring to all the other forms of gambling that are allowed in the state. "The difference between all of those and this is money is embedded in a local community. Sports gambling, those dollars go somewhere else."
He rejected the complaints that there is a lack of transparency around the proposals, saying leaders are elected to make good decisions on behalf of citizens. And he wants Rocky Mount to benefit.
"Gambling is going to come to the state of North Carolina,” Roberson said. “And the question is where.”
