WV Lottery holds hearings for limited video retailers - WOWK 13 Charleston, Huntington WV News, Weather, Sports

WV Lottery Commission takes limited video retailers to task

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CHARLESTON, WV -

The lights are out for some limited video lottery machines in Marshall County after a Jan. 24 meeting of the West Virginia Lottery Commission.

West Virginia Lottery officials became suspect, after visits by investigators to several sites that offer video lottery machines, that regulations were not being followed.

Operators were told through mailed letters to "show-cause why your retail license should not be sanctioned" at hearings Jan. 23 and 24 at lottery headquarters in Charleston. 

If those limited video lottery, or LVL, retailers are found to be in violation of the regulations, they could face fines of as much as $10,000 for each infraction, have their LVL licenses revoked, and/or have their number of machines reduced from a 10-machine maximum to five machines.

The lottery was scheduled to hear two cases Jan. 24 – one involving the Marshall County Fraternal Order of Police and a separate case involving the West Virginia State Council of the Vietnam Veterans of America.

In question was an allegation that the two organizations had contracted a third party to manage their LVL operations.

A letter from the lottery concerning the hearing addressed to Edward C. Vogler of the Marshall County FOP Lodge, was provided to The State Journal through attorney Vogler's attorney, John F. Dascoli, who was at the meeting.

In part, the letter reads: "Pursuant to Lottery Commission Policy Statement 11-03, and consistent with W.Va. code 29-22B-701 (8), certain management agreements require third party management companies and their responsible officers to be licensed.

"Based on the information provided, it appears the agreement between the Marshall County FOP Lodge and a third party is such an agreement as you are essentially permitting a third party to provide staffing, management and personnel related services at this location. Without prior disclosure and approval, these actions violate the law and a Lottery Commission order."

Vogler sent word through Dascoli that he was unable to change his work schedule to attend the hearing in person, but was available by telephone for the hearing.

Lottery commissioners expressed their displeasure that Vogler was not in attendance, and chose to temporarily disable the machines in question until another hearing could be scheduled, in which Vogler could attend in person.

Vogler, a Glen Dale police officer, also mentioned that his chief scheduled his shifts, and perhaps because there was no subpoena issued requesting his appearance, the chief did not allow for it.

The commission added to its motion that a subpoena will be issued for the next hearing.

"I'll be there," Vogler said, over a speaker phone.

It was the first time the commission has disabled machines because an operator did not show for a hearing, according to John C. Musgrave, director of the West Virginia Lottery. 

* * *

In the second hearing of the day, concerning the West Virginia State Council of the Vietnam Veterans of America, officials were in attendance. David Simmons, president, and Joe Wilson, secretary-treasurer answered questions for the commission also were joined by their counsel, Dascoli.

Simmons explained that his organization has 14 chapters throughout the state, but none are where its 10 video lottery machines are located in Weirton. But the group is trying.

"We're this close," he answered, holding his fingers an inch apart. "We need 25 members to have a chapter, and we have 23 or 24 right now.

"We are in the process of starting a chapter there, but it's a long process; the organization has a contract with an operator."

Later, Action Gaming of Wheeling was identified as the operator, which splits revenues "50-50" with the veterans' organization.

"We were looking for funding sources and we got a call about video lottery from Action Gaming," Simmons said. "We talked about it, and we felt we found a revenue source."

The Weirton machines registered to the veterans' organization had been operating for 26 weeks, according to Wilson. When a lottery investigator visited the site, located on Freedom Way in Weirton, management there said they worked for Action Gaming, according to the commission.

"I don't know how that could have happened," Simmons answered. "They get their checks from the West Virginia State Council (of the Vietnam Veterans of America). We employ the manager in Weirton."

Wilson said the Weirton retailer's bookkeeper also is employed by Action Gaming. Simmons also said that Action Gaming chose the facility in Weirton.

In the 26 weeks the lottery machines operated in Weirton, Wilson said the veterans' organization cut of the revenue is a gross of $70,339, but its expenses are paid from that amount, significantly cutting into the profits. He added that he has only requested $5,000 from that fund to transfer into a general checking account for the veterans organization.

The Lottery Commission chose not to take action on the veterans' hearing, but reserved the opportunity to bring the group back at a later time.

* * *

Dave Shriver, president of Action Gaming, was in attendance for the hearings, but lottery officials did not ask him to speak. He spoke to The State Journal after the hearings.

"I don't know what's going on with these hearings," he said. "The fraternals are good people. They're doing nothing but donating to the communities they're in and all of their causes. It's fantastic. Finally, there's no Jesse James out there.

"All these people want to do is good with the money," he added. "That's what we do. We're there to help them. That's it. There's no secrets, no secret contracts We don't take … in the law, we could actually take 60 percent. But it's 50-50. Period. Because we want these people to donate as much money as they can for these kids.

"The FOPs in New Martinsville, including the one that just got turned off, they had a Christmas party in that county," Shriver continued. "Those kids didn't have nothing. I mean nothing. They were lined out the door, Santa was there, cookies and milk … there were donations to Shop with a Cop … all the kids came in and got their picture taken, they got food, they all got presents, it was unbelievable."

Shriver defended Action Gaming's relationships.

"We'll do anything to help these guys," he said. "They do nothing but good with this money. If we have to help them here and there, we help them until they get on their feet. And then they're off and running on their own.

"It's a beautiful thing. And then this (hearing) happens. What happened is we heard these guys were being tortured by these phone solicitors. The (vets) almost had to have (the phone solicitors) arrested to get what they had coming to them. They shouldn't have to go through life like that.

"We have American Legions, VFWs, Elks, FOPS, Vietnam vets, everybody, all over. We're not allowed to be a retailer and an operator. We are (an) operator.

"This seems to be what (lottery officials) looking for: that Action Gaming is benefiting from these fraternals, by somewhat more than 50 percent," said Shriver. "They must think that Action Gaming is getting something extra from this. And we're not. We donate, and we're members of all this stuff, we go to all of this stuff. I live in New Martinsville and it's the greatest thing to happen there.

"It's awful."

Action Gaming operates 450 machines in about 100 locations, according to Shriver.

"(Lottery officials) said that they were going to send letters to 170 locations, but all of them so far have been Action Gaming stops," Shriver added. "You'd think that they'd be a little bit of a mixture here.

"Hopefully the lottery will see that everything is 100 percent legit and that these people are doing nothing but volunteering their time, trying to help people. That's it."