Illegal Video Poker Operation Busted

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Illegal Video Poker Operation Busted

Special Report - August 2, 2007
FBI agents arrested 12 people on July 31, including two former Buncombe county Sheriff’s deputies, in connection with an illegal video gambling operation in western North Carolina. Sheriff’s Deputy Lt. Ronnie Eugene Davis and reserve Capt. Kenneth Penland were charged with conspiracy to run an illegal gambling operation. Penland was also charged with obstruction of justice by a local law enforcement official. Both men have since left their law enforcement positions. The 10 others charged were employees who worked with Kings Mountain-based Henderson Amusement Company.

According to court reports released Tuesday, in 2005, Henderson Amusement owned and operated 350 video poker machines at 122 North Carolina locations, with gross receipts of $3.6 million. Henderson Amusement co-owners and brothers Barron Sloan Henderson and James Otis Henderson were among those charged on Tuesday.

Prosecutors say Davis and Penland convinced storeowners to operate video gambling machines by claiming the operation had the “blessing” of law enforcement, even carrying the Henderson owners to video gambling deals in squad cars, according to criminal complaints. While storeowners conducted the daily operations of the machines, Henderson employees would monitor each machine’s usage weekly and carry the money between the stores and Henderson’s offices. Storeowners kept 60 percent of the machines’ profits, while Henderson kept 40 percent.

The possession and operation of video gambling machines has been illegal in North Carolina since July 1, 2007, the end of a year-long phase out of the machines initiated by the General Assembly in 2006. The arrests are the first in a federal investigation of illegal gambling that started ten months ago.

Federal prosecutors are expected to file more charges Thursday before a grand jury. Magistrate Judge Dennis Howell will decide Friday whether the suspects are flight risks and should be held in jail until trial.