Originally created 03/12/98

Professor says video gambling helps South Carolina economy



GREENVILLE, S.C. -- A study that concludes video gambling contributes about $300 million annually to South Carolina's well-being was not influenced by sponsorship from the state's biggest video game machine owner, says the Clemson University professor who did it.

Economics Professor Robert McCormick said Collins Music Co. owner Fred Collins paid him $35,000 to do the study. Collins holds the most video-gambling machine licenses in the state, the state Revenue Department says.

Mr. McCormick says Mr. Collins' sponsorship had nothing to do with the results of the survey and Mr. Collins said he commissioned the study as an unbiased report. Collins made a copy of the study available to The Greenville News.

Mr. McCormick arrived at the $300 million figure using an economic measure called net welfare to the state. He said shutting down the industry would cost as much as $2 billion over five years.

Video-gambling critics say the industry preys upon the state's poorest residents, spreading poverty and welfare dependence to those addicted to the games. Mr. McCormick concluded video-gambling play in counties with low income levels does not seem to exceed that in counties with higher incomes.

"I don't know anything about where the money is being made at the machine level," Mr. McCormick said.

Gary Karr, spokesman for Gov. David Beasley who wants the machines banned, said the study was flawed. "If it doesn't acknowledge that families break up, people get divorced, people commit crimes, obviously it's flawed," he said.

Mr. McCormick said it was not his role as an economist to access the social costs. "Of course, there are costs, but the net effect is positive," he said.