The lawyer for a Fayetteville amusement machine vendor said in court Wednesday that North Carolina lacks a consistent public policy toward gambling when it allows Cherokee Indians to run video poker machines while banning such gaming everywhere else.

Lawyers for the state and the vendor traded arguments before the state Court of Appeals over the legality of a 2006 state law that made machines illegal except on the Cherokee reservation, west of Asheville. A trial court judge in Wake County overturned the law in February.

The three-member appeals panel grilled vendor attorney Hugh Stevens, asking pointed questions about a federal American Indian gambling law that provides the basis for the state's agreement with the Cherokees that allows the tribe to operate a casino. At several points in the hearing, the judges appeared openly skeptical of Stevens’ position that the state law should be struck down.

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The new head of the state agency charged with busting illegal video poker took a $500 campaign contribution from a man who has backed legalizing the gambling games.

John Ledford was sworn in as director of state Alcohol Law Enforcement Wednesday in Madison County, where he has severed as sheriff the last 10 years.

In raising funds for his most recent reelection campaign in 2006, Ledford accepted a $500 contribution from Howard Cole of Weaverville, owner of Cole Vending Co.

Cole has been a leader in the video poker industry's political efforts to win legalization and has been a frequent contributor to the campaigns of Democrats such as former House Speaker Jim Black and fomer Gov. Mike Easley, as well as committees seeking to elect Republican candidates.

Dome was unable to review finance reports from Ledford's earlier campaigns because the offices of the Madison County Board of Elections were flooded by Hurricane Francis in 2004, destroying those records, according to the county's elections director.

Ledford, who worked as an ALE agent for five years in the 1990s before resigning to become sheriff, could not be reached for comment Thursday. He replaces Bill Chandler, who retired suddenly last month following reports in The News & Observer and The Charlotte Observer about ALE's handling of firearms, including two missing assault rifles.

Update: Ledford said Thursday afternoon he was aware Cole had ties to video poker when he accepted the donation. Weaverville is in Buncombe County, which borders Madison County.

"I know who he is," Ledford said. "It's a small community. Everybody kind of knows everybody, or at least if you run a business. That's basically the way I know the man."

Ledford said the contribution would in no way affect how he does his job. 

"I'll do what I've always done as a law enforcement officer — I'm going to carry out the duties of my office fairly and impartially," he said.

HAIL TO THE CUPCAKES: President Barack Obama held a town hall at a Raleigh high school to build support and rally swing votes on health care reform among the state's Congressional delegation. While in Raleigh, the leader of the free world gave a huge plug to a Raleigh cupcake shop and forgot the name of the House speaker.

THE DEAL'S A LOCK: Last week's budget meltdown left House and Senate Democrats bitterly divided. And that's how they stayed until Wednesday when the budget negotiators unveiled a plan that looked remarkably like the one that died the week before. By week's end they had a handshake agreement to raise sales taxes and income taxes on higher wage earners. A handful of Democrats, enough to scuttle the deal, were grumbling about the "sin" taxes and the word was Gov. Beverly Perdue still wasn't thrilled with the tax plan. What could go wrong?

BEAM HIM UP: Rep. Earl Jones, a Democrat from Ceti Alpha 5, er, Greensboro, was in the news this week. First he breathlessly announced in a news conference that his bill to legalize video poker has supporters. Then his bill to create a high-tech center called the "Star Fleet Academy" on N.C. A&T State University's campus was the subject of a parody video that included a picture of Perdue after a Borg assimilation. Jones is running on impulse power and his shields are at 25 percent. Scotty, you've got to give him more power!

IN OTHER NEWS: Former house member Michael Decker got his prison sentence reduced. U.S. Rep. Mike McIntyre won't run for Senate. U.S. Sen. Richard Burr won't vote for Supreme Court nominee Sonia Sotomayor.

Rep. Earl Jones called a news conference Tuesday to announce his longshot effort to legalize and regulate video gambling has new endorsements.

The Black Caucus and the State Employees Association of North Carolina support the bill, which would take for the state 20 cents for every dollar spent on video poker machines. Dropping video gambling machines in bars, convenience stores and other establishments across the state could raise nearly $500 million in new revenue, Jones said.

And perhaps anticpating arguments about proliferating gambling across the state, Jones repeatedly stated his opinion that video gaming is no different than the lottery.

"Gambling activity is gambling activity, whether you're talking about a video lottery or a scratch-off ticket," said Jones, a Greensboro Democrat.

Dana Cope, present of SEANC, which represents 55,000 public employees, said the new revenue would allow the state to continue to provide needed services.

"North Carolina's government made this decision. We as a public made this decision when we voted to support the lottery in North Carolina," Cope said. "This is just the natural progression to regulate this industry to get that revenue income into the coffers of the state."

Video poker machines have left a legacy of corruption in the state. William Thevaos, president of the Entertainment Group of North Carolina, said the fact that the industry wants regulation and taxation shows that things will be different.

"We want to be taxed. We want to be legal," Thevaos said. "We want to create a new industry and we want to work with the state."

More after the jump.

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It's not common that an interest group asks the government to tax it, but that's what the Video Poker industry did in a press release today.

Industry representatives say electronic gaming, which was made illegal in 2006, can bring the state $498 million in tax revenue if it is regulated and taxed, which they say can help alleviate the budget shortfall.

"We are the only association in the state asking the General Assembly to regulate and tax us and there are $498 million reasons to do so," said William Thevaos, president of the Entertainment Group of North Carolina, in the press release.

Recent state court decisions found that electronic gaming cannot be illegal in North Carolina if the state allows it on Native American reservations.

"If the General Assembly fails to provide some oversight, regulation and taxation on video lottery terminals, the state is going to lose millions of dollars and the hands of time will be turned back to the days of no regulation and that’s not where we need to go," Thevaos said.

Rep. Earl Jones, a Greensboro Democrat, brought a bill before the House finance committee earlier this session, but it was never put to a vote.

Rep. Earl Jones is trying his luck at video poker.

A House committee began discussing but took no action on a bill sponsored by Jones that would legalize video poker in North Carolina, while giving the state 20 percent of the gaming profits. The state banned the machines in 2006.

The legislature is being pushed by recent court decisions falling on the side of video poker, saying the state cannot ban the games while allowing them on Native American reservations. The case is being reviewed by higher courts.

Proponents argue that such games could bring the state an extra $480 million in revenue and support about 35,000 jobs in the state at a time when money is needed. But others say the practice is deplorable and more addictive than other forms of gambling such as the lottery.

"Economic times have changed, and that's probably the primary reason for the consideration of legislation like this," said Mark Creech of the Christian Action League. "But we can make compromises that are all together too costly."

Jones, a Greensboro Democrat, disagreed, saying that the state already supports one form of gambling, the lottery, and that video poker is not substantially different. "The political liability for the state supporting gaming has already been tested," he said.

Rep. Earl Jones filed a bill Wednesday that would legalize video poker and give the state a 20 percent cut of gaming profits.

The bill would allow up to 10 machines in one establishment. Players would have to be 18 and could not bet more than $5 on a hand.

Jones, the sole sponsor of the bill, compared spending money on video poker to investing in hobbies such as golf or going to sports games. Lots of people in the state play Bingo, he said.

"I don't think people should be paternalistic because they feel like they can tell other people how to spend their money," Jones said.

Jones said the state's cut of poker money would be at least $480 million a year. Half would go to the general fund and the other half would go to education, he said.

The bill has little support in the House. Speaker Joe Hackney doesn't support it, a spokesman said. House Republican Leader Paul Stam said Thursday that the bill isn't going anywhere.

Correction: The bill was not sent to the House Rules committee as a previous version of this post indicated. It was sent to Judiciary II and then Finance.

Update: Senate leader Marc Basnight said it's too early to comment on the chances of the bill in the Senate because it hasn't cleared the House.

But a spokesman said he is not a fan of the industry.

"Video poker is the most awful form of legalized gambling their is and he cannot think of any benefit from it whatsoever and cannot imagine legalizing it," Schorr Johnson, a spokesman for Basnight said.

The watchdog group Democracy North Carolina offered a reminder Friday of just why North Carolina got rid of video poker.

Research Director Bob Hall warns of a "pandora's box of mischief and miscreants" if Judge Howard Manning's order from Thursday overturning the state's ban on the electronic gambling machines is upheld: "Video-poker," Hall wrote, "has rightly been labeled the 'crack cocaine' of gambling."

Hall's group was ringing the alarm bell about video poker and its influences on N.C. politics years before former state Transportation Secretary Garland Garrett or former House Speaker Jim Black went to prison on federal corruption charges. Garrett was convicted of running an illegal gambling operation involving video poker, and the federal investigation that brought down Black started with video poker.

Hall and his group helped drive the 2006 State Board of Elections investigation into video poker contributions to Black, which totaled about $200,000 between 2000 and 2004, Hall reminded reporters in a memo Friday. Video poker money made up more than a third of the $30,000 that Black paid to then-Rep. Michael Decker in 2003 to switch parties and vote to keep Black in the speaker's chair. 

State Sen. Kay Hagan was not as bipartisan in the previous session.

With the Democratic Senate nominee touting her bipartisanship in the legislature, Dome decided to take a closer look at the number of Republicans who signed on to her bills.

In the 2005-06 session, the Greensboro Democrat was the primary sponsor of 37 bills. Of them, 16 had no cosponsors, eight had only Democratic cosponsors and 13 had Republican cosponsors.

A few of the Republican-cosponsored bills had more than one GOP senator on board. Overall, her 76 cosponsors included 56 Democrats and 26 Republicans, or about a three-to-one ratio.

The most frequent Republican cosponsor was Sen. Stan Bingham of neighboring Davidson County, who signed on to seven Hagan bills on funding for the ACC Hall of Champions, the Natural Science Center and the N.C. Science Competitions center; phasing out video poker; amending wine-making laws; building an addition at Guilford Community College; and boosting grants to public libraries.

Hagan also had Republican cosponsors on a pilot program on teaching new foreign languages in school, special licenses plates for the N.C. Wildlife Habitat Foundation and the Guilford Battleground, more library grants, training for 911 call centers, and making technical corrections on state laws on nonprofits.

Previously: Hagan's 2007-08 track record.