RALEIGH — Two months after Gov. Bev Perdue trumpeted a new gambling compact with the state's Cherokee Indians, live blackjack and poker are inching closer to reality at the tribe's Western North Carolina casino.
The deal became mired in negotiations after Republican legislative leaders expressed concerns about the constitutionality of provisions that directed gambling revenue and granted the tribe exclusive regional rights.
But the governor's office said last week that it is close to a resolution - and expects to have the compact ready for state lawmakers when they return to Raleigh for a mini-session in February.
Now, the bigger obstacle is whether Republican legislative leaders can muster the votes to enable the new games. They hope to win over skeptical rank-and-file lawmakers by casting it as a jobs issue and not an expansion of gambling.
Unlike most legislative issues, gambling defies party lines with liberal Democrats and conservative Republicans uniting in opposition to the compact. In recent years, the legislature has moved to limit gambling, and the compact's passage is far from certain.
"I don't think it's good for the state," said state Rep. Pricey Harrison, a Greensboro Democrat, echoing moral concerns raised by some Republicans. "I think it preys on those that are most vulnerable and can least afford it."
The 30-year agreement, as written, would sanction Las Vegas-style card games and send a percentage of the money from Harrah's Cherokee Casino to the state education department, starting at 4 percent and moving eventually to 8 percent.
In signing the agreement in November, Perdue, a Democrat, touted it as a way to raise an estimated $2.5 million initially for school districts and create 400 projected jobs in the local economy. The state receives no revenue from existing casino games under the current accord, reached in 1994 under Gov. Jim Hunt, a Democrat.
"Gov. Perdue is focused on finalizing the compact with the Cherokee because it will create jobs and inject much-needed funding into our classrooms," said spokeswoman Chris Mackey.
The legislature didn't directly participate in the compact negotiations and doesn't need to approve the specific terms of the deal. But lawmakers still hold sway because they would need to amend a state law to allow live table games. The federal government also must approve the compact.
Perdue's office scrambled to complete the compact during the Thanksgiving weekend. The governor called on the legislature to quickly approve a law enabling the deal during its November mini-session. House Speaker Thom Tillis and Senate leader Phil Berger, both Republicans, support a compact. But they declined to bring up the compact, saying the agreement was riddled with errors - including the wrong address for the governor's office - and needed further consideration before it came to a vote.
In a December letter, attorneys for Tillis and Berger told Perdue's office that the state constitution only allows the legislature to appropriate money and the agreement with the tribe infringes on lawmakers' authority. The compact sends North Carolina's portion of revenues directly to the state education department, which "could create a constitutional deficiency that will likely be subjected to a robust legal challenge," the attorneys argued.
The legislative attorneys also suggested that a clause granting the tribe exclusivity to live table games west of Interstate 26 contradicts a constitutional ban on the creation of monopolies, making it possibly "susceptible to a constitutional challenge."
The revenue and exclusivity provisions were major sticking points in the negotiations. But the governor's office dismisses the suggestion of a monopoly and believes the funding issue will get resolved in the accompanying legislation without much trouble.
Bill Brooks, the N.C. Family Policy Council president and a gambling opponent, believes the legal issues will require a change in the constitution to authorize the compact or it will prompt a legal challenge. "They are essentially throwing it to the courts," he said. "There will be a lawsuit ... and (compact opponents) will win."
Any possible constitutional issues would complicate the vote. With the possibility of a lawsuit, said state Rep. Paul "Skip" Stam, a gambling opponent, there is "no way you could assure people it would do what it says," thus eroding support.
Pushing job creation
Tribal leaders and lobbyists have spent the past couple months making the rounds at the state legislature trying to gather votes.
The tribe is a political donor. It has given more than $1 million to state candidates and political committees since 2002, including nearly $700,000 in the 2008 and 2010 election cycles, according to Democracy North Carolina, an advocacy group that tracks campaign money.
Larry Blythe, the tribe's vice chief, said he wants to see the compact approved soon because it would add hundreds of jobs to an economically depressed area and help boost the $633 million expansion at Harrah's casino, which is scheduled for completion in late summer.
Cherokee sits in Swain County at the entrance to the Great Smoky Mountains National Park, 50 miles west of Asheville. The unemployment rate in Swain County was 12.7 percent in November, compared to 9.9 percent for the entire state.
So far, the economic development argument is working, even on religious conservatives like state Rep. Mike Hager of Rutherfordton, who said that, as a Southern Baptist, he is torn.
"I don't see it as an expansion of gambling," he said. "I see it just as a retuning. It's adding jobs in one of the hardest-hit parts of North Carolina."
"You are going to turn that machine into a person with a paycheck and benefits," added Berger. "I don't think you're expanding gambling at all."
The Senate leader said he is confident it will pass his chamber but he doesn't know about the House. "I think the Cherokees, the governor's office and folks in the General Assembly would like to see those machines turned into jobs as soon as possible," he said.