The vote of 114-1 comes after House Speaker Jim Black, the General Assembly's most staunch supporter of the games, was tied in recent months to investigations of the gambling industry, including video poker and the state lottery.
The measure would slowly reduce the number of machines any retailer could operate or distributor set up at one location from three to none by July 1, 2007. Repeat offenders or those caught with more than five machines would be guilty of a felony.
The bill now heads to the Senate, which has approved a ban five times since 2000. Gov. Mike Easley would have to sign the bill to make it law.
Earlier Senate bans always died in the House, where Black, the chamber's most powerful lawmaker, defended the industry by saying it generated legal jobs that shouldn't be eliminated.
Pressure for a ban increased this session after Black, D-Mecklenburg, was linked to state and federal probes of the video poker industry's practices and political donations. He said Wednesday that had nothing to do with his decision to relent on the issue.
"What's different for me is that we finally reached an agreement that would give people a chance for up to a year to find a job," Black told reporters after the vote. "I never, ever liked the idea of ... with the stroke of a pen, eliminate 2,000 jobs."
Black's campaign accepted $167,000 in video poker industry contributions during the 2002 and 2004 election cycles, making him the industry's top recipient of campaign cash, according to the reform group Democracy North Carolina.
Senate Majority Leader Tony Rand, D-Cumberland, said he expects his colleagues to accept the House proposal.
In March, the State Board of Elections ordered Black's campaign to forfeit $5,500 in illegal industry donations, but said there was no evidence he knew the contributions were unlawful.
County sheriffs estimate there are 20,000 illegal electronic poker machines in North Carolina, twice the number of legal machines in the state.
"It's a scourge on our system in our county. It's not the legal machines that bother our folks back home. It's the illegal machines," said Rep. Ronnie Sutton, D-Robeson, during the debate. The bill "gives the employees who work in the video poker industry ... some time to find other employment."
Rep. Joe Kiser, R-Lincoln, a former sheriff, supported the ban but would have preferred an immediate end to the business.
"I have a little mistrust with this sunset," said Kiser, noting the Legislature needed more than 30 years to remove a "temporary" state food tax. A temporary half-cent sales tax increase approved in 2001 also remains on the books. "I hope that we don't extend the sunset on these machines. I am very concerned and worried about that."
A consulting firm hired by the poker machine industry said earlier this month that the legal machines are directly responsible for 1,752 jobs and more than $100 million for the state economy.
Legislators are "penalizing the responsible taxpayers that have been in this business for years and years, and they are rewarding the crooks who come in here illegally," said Richard Frye with the N.C. Amusement Machine Association. "They're still going to have to deal with all the illegal machines in back rooms around the state."
The House bill would retain an exception for video gambling machines at the casino run by the Eastern Band of Cherokee Indians.
Rep. John Blust, R-Guilford, cast the lone dissenting vote, saying he wanted an outright ban instead of what he considered a "face saving" phase-out for Black.
North Carolina legalized video poker machines 13 years ago, but lawmakers agreed to the three-machine limit in 2000 after worries that banned machines from South Carolina would move across the border.
Machines had to be registered with sheriffs and couldn't be replaced once they broke down. Payouts were limited to $10 in merchandise.
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