Video poker case may end in settlement

By Taft Wireback, Staff Writer News & Record

The multimillion-dollar lawsuit against video-poker supplier Clarence "Bucky" Jernigan is nearing an end after establishing that his computerized poker machines raked in more than $4 million in their last three years of operation.

The Randolph County Board of Commissioners voted in closed session earlier this month to move toward a settlement with Jernigan. The county sued him last May for operating a business that specialized in poker machines and illegal cash payouts.

It remains unclear how much, if any, of Jernigan's illegal proceeds will revert to county government as part of the settlement. But the lawsuit contended that any money that moved through the machines was illicit and subject to forfeiture, putting all $4 million in play.

Board members said they could not discuss any specifics of the proposed settlement agreement, which has already been roughed out, because it has not been formally approved yet.

It's also uncertain what will become of Jernigan's 263 poker machines, which rank him as one of the state's larger poker-machine vendors. The suit seeks to confiscate and destroy them as public nuisances.

Jernigan has not been charged criminally in connection with the poker machine business. Several of the businesses that made illegal payouts have been charged with misdemeanors.

The proposed settlement emerged from court-ordered negotiations between lawyers for the county, state, Jernigan and one of his business partners.

"We have seen some of the things that might be in the final agreement, but nothing we can relay at this time," said board Chairman Harold Holmes.

Jernigan did not return a telephone call to his business Tuesday seeking comment. His attorney, Mike Barber of Greensboro, declined comment. Greensboro lawyer Randall Reavis, representing the county and the state Division of Alcohol Law Enforcement in the case, also declined comment.

Jernigan is a prominent business owner in Randleman, where his Heath Amusements Co. is headquartered. He was married early last year to Trudy Wade, a member of the Guilford County Board of Commissioners, but the marriage was annulled in mid-November by a Nevada court.

Jernigan ran unsuccessfully last year for a seat in the state House of Representatives.

The suit was filed last spring after a number of businesses that rented poker machines from Jernigan's company, Heath Amusements, were busted by state and Randolph County investigators for making illegal cash payouts.

Some of the businesses acknowledged having clandestine deals with Jernigan to split the proceeds of illegal gambling on the machines. Jernigan conceded as much in interviews with investigators, according to court documents.

The novel civil suit sought to drive Jernigan out of the poker business, classify his poker operations as a public nuisance and claim for Randolph County the illegal millions of dollars that allegedly moved through them.

Barber and Jernigan's other lawyer, former chief justice of the state Supreme Court James Exum, argued that only a much smaller portion of the money was at issue as Heath Amusements proceeds.

Evidence showed that although Jernigan's 263 machines took in at least $4.3 million, about a third of that was paid out to players in jackpots. The remaining $3 million would have been split between Jernigan's company and the individual stores, shops and other businesses where the machines were.

A the lawsuit unfolded, the two sides also sparred over whether Jernigan could be held accountable as an individual or whether only the assets of Heath Amusements were at stake.

Court documents show that Jernigan's company had poker machines placed in 126 locations in 18 counties, from Hiddenite in mountainous Alexander County to Carolina Beach in coastal New Hanover County. All the machines were taken out of action last year pending the outcome of the court case.

Video poker is a controversial form of gambling often found in such settings as curb markets, social clubs, pool halls and bars. It is legal in North Carolina if the host business does not give prizes of any amount in cash. Prizes are legal only when paid in merchandise worth no more than $10 per winning hand.

The poker machines are standalone video consoles that depict hands of cards on the screen. Players compete in games such as blackjack against a computer that is preset to ensure substantial profits for its owner over time. But occasionally a player gets lucky and hits an illegal jackpot that can range into the hundreds of dollars.

Critics say video poker is addictive for some people, likening its hold on the addict to that of crack cocaine. Law enforcement officers tell of receiving complaints from spouses whose husbands or wives have lost entire paychecks on the machines.

Some legislators have been trying for the past several years to ban the poker machines. Bills proposing such a ban already have been filed in the new session of the General Assembly.

In recent years, the state Senate has approved several measures that would outlaw the machines, except at the Cherokee casino and on other Native American lands. But the proposals never gained traction in the state House.

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