The murky world of illegal gambling has had a spotlight over it in recent weeks as Buncombe County Sheriff Bobby Medford, and now Haywood County Sheriff Tom Alexander, have been linked to illegal video poker operations.

Medford is on trial in a federal court in Buncombe County for allegedly accepting payments from video poker machine owners and storeowners who had the machines in their businesses. In testimony last week a witness said that Alexander also accepted illegal payments — $3,300 per month — from video poker machine owners, according to reports in the Asheville Citizen-Times.

Although Medford and his associates are on trial, dealing with the underground vices of punch boards and poker machines is nothing new to almost everyone who works in law enforcement in Western North Carolina. Police have found evidence of illegal gambling all over.

Waynesville Police Department records from 2000 through 2006 document a bar full of men playing punch boards at the Waynesville Pool Room; the seizure of 91 punch boards from the VFW; and lottery-type cards locked up and hidden in a cabinet behind the bar of the American Legion.

During an undercover operation that netted 19 machines in Macon County, illegal video poker was found at the bowling alley, Hot Spot, Fox Ceramics, D and J Pawn Shop and Carolina Tobacco, among other places, says Macon County Sheriff Robbie Holland.

The total ban on video poker machines as of July 1, 2007, has caused police to direct their crime-fighting efforts elsewhere. Neither Holland nor Waynesville Police Chief Bill Hollingsed have busted any machines as of late, but Supervisor Alan Page of the Asheville office of Alcohol Law Enforcement says they’re still a problem.

“We did so many in the last two to three years. We did all those search warrants and all those illegal video poker busts — just hundreds,” Page said.

Before the machines were banned, state law passed in 2000 dictated that the responsibility to register and regulate video poker machines fell to the local sheriff’s department. As a sheriff reported each machine, it was given a sticker to show that it was legally registered and it was then subsequently taxed. Each store was only allowed three machines.

No matter how much money a patron spent on video poker, the top prize one could receive was a mere $10 gift card redeemable for store merchandise. To make it more lucrative for customers and to get them to spend more money, many storeowners offered illegal cash payouts.

“(It) obviously gives someone incentive to spend more money if they’re going to get cash in exchange for their winnings,” said Hollingsed.

Illegal payouts were the major violations both Hollingsed and Holland dealt with during the video poker era.

“The majority of businesses in Macon County (with video poker) were in fact paying out, and paid out to my officers undercover,” Holland said.

This made the video poker business flush with cash. Lt. Tim Brooks of the Waynesville Police Department read from one past report of a tobacco salesman who spent $3,000 in one day on video poker. One machine seized in Macon County had over $10,000 in it. And in Waynesville, a business owner made an estimated $30,000 to $40,000 each year off of each of his three machines.

Law enforcement operations to halt illegal video poker were prompted by calls to police by concerned relatives or friends of gamblers.

“I was receiving information from grown adults who had parents on social security and retirement, and were spending their entire check on these poker machines. Before the end of the month, they’d be out of money and the adult children would have to help them financially get through the month,” Holland says.

“A significant other would be killing $200 a week trying to get a big win,” Brooks adds.

Ban on video poker

Eventually, the intensive effort to combat illegal video poker became too much.

“(They) just didn’t feel like they could control the activity, and a lot of time and energy was being put into trying to find a machine that wasn’t paying out in merchandise but was paying out in cash,” remembers state House Rep. Ray Rapp, D-Mars Hill.

In 2006, the North Carolina Sheriff’s Association asked the General Assembly to place an outright ban on the machines. Both Medford and Alexander are members and signed on to the letter.

“I think the Association’s position was, we know there’s this illegal activity going on but we can’t devote the limited resources we have to monitor the operations. Let’s just ban them and not try to figure out who’s doing it correctly, and just be done with it,” Rapp says.

Rapp helped wage what he describes as a background campaign to ban the machines.

“It was clear to me that these kind of games of chance were being abused to begin with, and that was probably the worst kept secret in the state. Secondly, it’s been a consistent position of mine; it seems to me it exploits the vulnerable,” he says.

The ban on video poker didn’t pass easily. Rapp recalls that then-House Speaker Jim Black, D-Mecklenburg, was reluctant to go through with the ban.

“The one thing about the speaker is that he could not deny that he was an advocate for (the machines),” Rapp says. Black argued during a meeting with Rapp that 1,000 jobs were tied to the industry and would be lost if the machines were outlawed.

“I really took him at face value that that was what his concern was,” Rapp says.

Rapp would later discover why Black advocated for the machines — the former speaker is now serving time in prison for accepting bribes from gambling companies.

But Rapp never guessed sheriffs were also involved in illicit dealings with video poker companies.

“I’ll be honest with you, the sheriff’s abuse did not come to mind. Part of the reason I’m so stunned is, it was the Sheriff’s Association advocating a total ban. That even further removed it from the realm of possibility for me,” he said.

Most mum on aspects of Medford trial

How sheriffs might have became involved in the illegal video poker business is somewhat difficult to determine. Currently, law enforcement is not commenting on the Medford case and officers refuse to speculate on what could have led sheriffs to get involved.

According to witnesses testifying in the Medford trial, money came at the sheriff through different avenues. Storeowners allegedly paid off Medford so they could continue to operate their illegal machines and give cash payouts. Witnesses say Medford looked the other way, and in exchange, customers spent more and businesses profited.

Gambling machine operators could also be involved in payouts. Employees of Henderson Amusement testified that the company paid Medford to allow its machines to operate. The company was assured that it wouldn’t get in trouble and that it could still profit off video poker machines in a state where they had been outlawed.

Holland, Macon County’s sheriff, told the Asheville Citizen-Times on June 29, 2007, that a gaming operator had attempted to bribe him. According to the paper, “Holland said one operator offered to fund programs in his department if investigators would look the other way when it came to machines.”

Holland won’t comment on that statement now, citing the ongoing Medford trial.

Holland and other law enforcement officials aren’t the only ones not talking. As of last week, A.L.E. officers were placed under a gag order by a judge that prohibits the organization from specifically discussing anything related to the new wave of video poker machines.

According to A.L.E. supervisor Page, “Our agency is restricted by a temporary restraining order. We can’t discuss anything about the new internet type machines or phone card machines.”

Page would only say that “technically, video poker machines are outlawed.”

The technicality is a new type of machine that operates under a sweepstakes system. It works like this — a customer purchases a cheap prepaid phone card with a minimal number of minutes on it. In exchange for buying the card, the customer can enter a “sweepstakes” sponsored by the company that made the software that sells the phone cards. The sweepstakes is essentially comprised of a slot machine video game with various styles and faces, similar to the kind found in Harrah’s. Prizes can amount to hundreds of dollars.

These machines are controversial in many states, but not technically illegal in North Carolina.