The State Faces a Looming Budget Shortfall. Is Gambling the Answer?

A great blue heron rests peacefully along the lake of Camp Carefree. The air is crisp, the birds are chirping, and the Stokesdale site is living up to its name.

Canoes and kayaks sit next to a playground on the lake’s left. A wooden pirate ship stands on the right. It’s an idyllic rural lifestyle many in Rockingham County have come to appreciate. 

For 38 years, the camp has been a source of escapism and tranquility for children with chronic illnesses or disabilities. And in two months, a new wave of kids will arrive for a free weeklong stay highlighted by lively games and activities. 

“They come because it’s quiet, it’s serene and it gives them a real opportunity to spend time with God,” said Rhonda Rodenbough, who has worked at the camp alongside her husband since the 1980s.

She’s not pleased that an adjacent 192-acre lot of land is being considered as a site for a new gambling venture. “I just don’t think this is the right atmosphere for a casino,” Rodenbough said.

Last year, state lawmakers paused plans to allow a casino here and in two other counties. But the area remains ground zero for the fight between gambling critics and those who say North Carolina needs the revenue it could bring.

Rockingham County voters made their frustrations known last month by ousting one of three commissioners who voted to rezone the land for commercial use, which would allow a casino. Two other incumbents nearly lost their reelection bids as well, including Kevin Berger, the son of North Carolina Senate leader Phil Berger. The younger Berger won reelection by a mere three votes.

Political leaders in the conservative area say a casino is necessary for the state and local economy, especially since North Carolinians are already driving a few miles north of the border to a new Caesars casino in Danville, Virginia.

“We cannot ignore the fact that full casino gaming is already next door to us, funded in large part by money flowing out of our county and other parts of the state,” Kevin Berger told The Assembly in an emailed statement.

As state legislators return Wednesday for this year’s session, budget projections show North Carolina approaching a roughly $2 billion fiscal cliff within four years, according to nonpartisan analysts with the General Assembly. 

Last year, GOP lawmakers accelerated income tax reductions for all North Carolinians. They did so while also increasing spending on a number of infrastructure and educational initiatives. This comes after Republicans voted to phase out corporate income taxes by 2030.

The increased spending paired with decreased tax revenue gives lawmakers few options to address the looming budget threat. If everyday North Carolinians bear the brunt of new taxes or fewer government services, politicians in Raleigh could pay a heavy price at the polls. 

That’s forcing state lawmakers to get creative and identify new revenue sources to fill in the gap. Last year, the legislature made it legal to bet on sports, which started in March and eventually is expected to generate $100 million annually for the state.

Senate Republicans also sought to legalize video lottery terminals, non-tribal casinos, and medical marijuana—proposals which failed to gain the support of socially conservative GOP House members who find all forms of gambling and drugs reprehensible. But collectively, the changes could bring in more than $759 million annually by 2027–’28, according to nonpartisan analyses. 

No issue has proven more divisive than casinos.

A Trip to Danville

Travel north along Highway 86, cross into Virginia, and turn left two miles ahead. Continue toward West Main Street. A big white tent is on your right.

Even at noon on a rainy Wednesday, the parking lot is packed. About 100 cars have filled in, and most of the vehicles appear to be from North Carolina. 

Welcome to Caesars Virginia, the bustling new casino in Danville that’s taking North Carolina’s lunch money. 

The makeshift casino is pretty standard. It was developed in a matter of months to house sports-betting kiosks, tables for craps, roulette, blackjack and poker, and several hundred slot machines.

But the real action is happening behind the tent, where a couple dozen construction workers are aiming to get a permanent, 12-story resort up and running by the end of the year.

It’s that missed economic opportunity that has frustrated some North Carolina lawmakers. The state’s top senator, Phil Berger, has been aggressive in pushing for a new casino in his district. That casino would be the anchor point of a “rural tourism district” that would include restaurants, shops, and a hotel.

On a September night last year, something rare happened in Raleigh: Berger lost a political fight.

After three and a half months of back-and-forth budget discussions, House Speaker Tim Moore refused to move forward with a bill that didn’t have the support of most of the 72 Republicans in his chamber. They didn’t want non-tribal casinos and video lottery terminals in the state budget. 

“Members did not have a full preview of the proposed legislation and no real time was given for their input,” said Rep. Jason Saine, a Lincoln County Republican and top House budget writer.

Democrats weren’t going to lift a finger to help Berger, who was effectively tying the implementation of Medicaid expansion to the creation of new casinos. 

Democrats were largely ignored in developing the budget and were frustrated by a string of bills Republicans advanced, including a ban on most abortions after 12 weeks, an overhaul of the state’s system for appointing state and local elections officials, and considerable expansion of the state’s school voucher program, also known as opportunity scholarships.

“Governor Cooper and legislative Democrats forced NCGOP Senate Boss Berger to drop his cynical, corrupt casinos-for-Medicaid deal,” Anderson Clayton, chairwoman of the North Carolina Democratic Party, wrote on Twitter. “We stopped the steal! Couldn’t stop private school vouchers, but we’ll take wins where we can get them.”

For months, Berger had worked behind the scenes with state and local officials to pave the way for a casino in Rockingham County. But at a September news conference, it was clear the months-long budget impasse was over. Casinos and video lottery terminals wouldn’t be included.

“It was just pretty clear that the facts were almost beside the point as to what those proposals would do for rural areas,” Berger told reporters. “And the emotion that was actually permeating every bit of discussion about that had sort of overtaken [the debate]. I’ve learned that in an environment like that, you’re unlikely to make any progress.”

As lawmakers return to Raleigh this week, the intraparty boxing match over expanded gaming could go to a second round, though Berger has said he’s “not intent” on moving forward with casinos this year. 

Budget Shortfalls Ahead

Without intervention, North Carolina could soon run a roughly $2 billion annual deficit. That’d be nearly 7 percent of the current $30 billion state budget. 

State budget projections show the state on track for a surplus in the fiscal year ending this June, as well as the following two years. But the rosy picture begins to fade as North Carolina taxpayers fall into a reduced 3.99 percent tax bracket starting in 2026. And if certain revenue targets are hit, the income tax rate could drop even further, spelling the potential for greater deficits. 

Those triggers could reduce the personal income tax rate from 3.99 percent to 3.49 percent for 2027, followed by further reductions to 2.99 percent and 2.49 percent.

“We’ve seen these ‘doom-and-gloom predictions…They have yet to come true.”

Sen. Phil Berger

Dan Gerlach, who has analyzed North Carolina budgets for three decades and worked for Democratic Gov. Mike Easley, highlighted the dynamic at play in a recent report he authored on behalf of the North Carolina Economic Development Association.

“The long-term forecast reveals that the state may trigger additional tax cuts,” Gerlach wrote. “Those tax cuts would make it difficult for government to remain at the same level, adjusted for inflation and population. This prognosis may lead to consideration of additional policy options.”

Nonpartisan analysts in the legislature’s Fiscal Research Division are forecasting a deficit of $51 million in the 2026–’27 fiscal year. The shortfalls in the subsequent years climb from $1.89 billion in 2027–’28 to $2.46 billion in 2030–’31. 

Saine thinks the analysis is flawed because a lot will change between now and 2026.

“These are merely projections and neglect to accurately account for future growth or future actions of the legislature,” Saine said. “In politics, long-term prognostications are rarely accurate and are absent of other actions by the legislature that are yet to be determined. Priority adjustments, spending adjustments, growth and other factors will determine whether shortfalls come to pass or not.”

Phil Berger said the state “is in phenomenal fiscal health” and new estimates show a surplus of $400 million for this year and $1 billion for next year. “Ever since Republicans earned the majority in the General Assembly and went about reducing the tax burden on North Carolinians, we’ve seen these ‘doom-and-gloom predictions,’” he said in a written statement to The Assembly. “They have yet to come true.”

Community Resistance

You don’t have to travel very far to find opposition to casinos in Rockingham County. Anti-casino yard signs sit outside scores of businesses, homes, and even a cemetery.

One sign resting in plain view off of Highway 220 belongs to Jeff Sellers, owner of Allied Truck & Trailer Sales in Madison. He worries about the morality of gambling and the potential for increased traffic accidents. He fears gambling revenue won’t benefit most residents. 

Sellers also questions the casino’s economic impact on businesses like his. While he believes a casino could boost revenue for nearby gas stations, he doesn’t see it supporting local businesses or restaurants. He thinks out-of-towners will merely come for the casino, while locals gamble away money they’ve previously spent at local businesses.

“I don’t think there’s going to be a lot of income realized and revenue that’s going to benefit North Carolina by having an outside-of-North Carolina-owned casino come in and set up shop,” Sellers said. 

Mitch Mitchell, a Madison farmer who supplies sod, said he’s heard stories of people losing big at the recently closed Lucky Duck Internet Cafe, which local authorities shut down last month after discovering illegal gaming. Mitchell also feels betrayed by political officeholders who quietly pushed for the rezoning. 

“There’s enough people that are getting fed up with it,” Mitchell said of the community’s response to the proposed casino. “They’re tired of just being dictated to like you don’t have a say in anything.”

Sellers and Mitchell didn’t want to be photographed, citing potential political retaliation against their businesses—a sign of the community’s deep mistrust of its office holders.

County commissioners acknowledge the frustration, but feel it is exaggerated. They say closed-door discussions are common when trying to attract businesses and that a degree of confidentiality is needed. But months of silence last spring fueled speculation about the motivations of commissioners and state lawmakers.

“They were being manipulated and I’m very disappointed that they were being manipulated.”

Mark Richardson, Rockingham County Commissioner

In early March, some local and state officials quietly traveled to Baltimore for a symposium hosted by the Cordish Companies, which was looking to expand operations into North Carolina. 

On June 19, the county commission voted to amend a local ordinance that would allow for a casino in Rockingham County if the state voted to legalize it. The vote was discussed and passed in just two minutes. 

On July 10, the Rockingham County Planning Board voted 5-2 against a rezoning request made by NC Development Holdings, whose registered address matches the Cordish Companies. But the vote was simply a recommendation to the county commission, which would decide whether to rezone the 192-acre lot for commercial use, likely including a Cordish-owned casino.

The following day, state lawmakers released a draft bill that was first obtained by WRAL. Under current law, three tribal casinos are allowed to operate in the state. Berger and others called for the creation of three non-tribal casinos in Rockingham, Anson, and Nash counties and a fourth tribal casino that could be run by the Lumbee Tribe. The three rural casinos would presumably all be Cordish-owned enterprises.

County commissioners held a contentious two-hour hearing on Aug. 21. Eighteen members of the public spoke out against the proposed rezoning while none supported it, according to the meeting minutes. In spite of the pushback from Rockingham County Sheriff Sam Page, former U.S. Rep. Mark Walker, and 16 others, all five county commissioners voted to approve the rezoning.

Critics accuse political leaders of prioritizing their campaign finances over their own constituents, noting Cordish’s ongoing lobbying efforts and donations it has made to GOP state lawmakers, including the elder Berger. 

Perhaps most infuriated by the proposed casino was Amy Leebrick, a Stokesdale resident who volunteers at Camp Carefree and lives next to the 192-acre lot. Leebrick and her husband, Brandon, were among the plaintiffs involved in a lawsuit disputing the adjacent land’s rezoning. A judge dismissed the complaint last month, holding that the plaintiffs had a “lack of subject matter jurisdiction.”

The couple has four kids, including a four-year-old daughter with Down syndrome who qualifies for free stays at Camp Carefree. Amy Leebrick worries the casino would prey on the area’s most economically vulnerable residents. She pins the brunt of the blame on the elder Berger.

“He’s betraying Republicans, his own voters, his constituents, and Rockingham County,” she said. “He’s very isolated up in that big office in Raleigh. And who is he listening to? I believe it’s the lobbyists,” Leebrick said.

Phil Berger said that when he explains the benefits to his constituents, “they’re receptive to the concept and open to learning more.” 

‘They Were Being Manipulated’

Some see the concerns of the anti-casino movement as greatly overblown.

During a 90-minute interview over iced tea at Parker’s Home Cookin’ Restaurant in Stokesdale, Rockingham County Commissioner Mark Richardson, 74, downplays the community pushback. 

He says casino opponents represent a vocal minority who have been used as pawns for the political gain of attention-seeking politicians, and for the economic benefit of rival casinos.

“They were being manipulated and I’m very disappointed that they were being manipulated,” said Richardson, who won reelection last month by 107 votes—his slimmest margin of victory in any of the four elections he’s won since 2012.

Richardson and Kevin Berger said a casino could bring $20 million annually in local tax revenue and create 1,750 new jobs.

Richardson said he spoke with symposium hosts in Baltimore about whether they’ve seen an uptick in crime; he’s confident that neighbors of a Stokesdale casino would be safe. He said he’d push for casino money the county receives to be returned to residents in the form of lower taxes, the creation of two new schools, pay raises for teachers, and the hiring of permanent, non-volunteer firefighters. 

The younger Berger also sees minimal downside to a casino.

“The reality is a brick and mortar facility does not expand gambling or any issues associated with gambling, but would become a destination offering tremendous benefits to the county and our residents, in the form of revenue, entertainment, and good paying jobs,” Kevin Berger said in a statement.

Saine, the Lincoln County Republican, successfully pushed for the state to collect tax revenue through online gambling. The top House budget writer now sees an opportunity to build on that by legalizing video lottery terminals (VLTs). 

He sees less political appetite, however, for rural casinos, at least for the upcoming short session.

“VLTs have been a long-standing topic at the General Assembly,” Saine said, adding that the casino debate is relatively new in the legislature and “something that will take a longer time for members to study and decide how they want to address.”

Rodenbough, who has worked at Camp Carefree since the 1980s, says the financial interests of casinos’ operators don’t align with residents’ needs. “They’re not coming to save you. They’re coming to make money off of you and the people that live in this county.”

Sitting on the couch at her Stokesdale home, Rodenbough offers a defiant message. “We’re not going anywhere,” she said. “And we’re not backing down. No matter what they do, we’re not backing down.”

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