Lottery Commission sets plan for LVL licensees and operators, ad - WOWK 13 Charleston, Huntington WV News, Weather, Sports

Lottery Commission sets plan for LVL licensees and operators, adopts order

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CHARLESTON -

In April, the West Virginia Lottery Commission moved forward with penalties for limited video lottery operators and the organizations that have the machines.

On May 16, the commission adopted an order that set a plan for two operators: Action Gaming and Bucks Inc.

Over several months dating back to late 2013, the commission investigated both operators and some fraternal organizations its investigators found skirting the law for an advantage on machine numbers.

A fraternal organization can operate as many as 10 limited video lottery machines per location. For regular retailers, the limit is five.

In show-cause hearings that took place Jan. 23-24 and Feb. 10, seven fraternal organizations testified before the commission about their LVL operations. Click  HERE and HERE  for our previous coverage on the hearings.

The Commission found that many fraternal organizations were merely the license holders for machines and not operating their own establishments.

“This is the result of the hearings that we’ve had,” said West Virginia Lottery Director John Musgrave in April. “We think we’ve been quite generous, and yet it’s going to be severe fines and penalties.

"There were a number of issues that caused us concern.”

The lottery commission had promised to deal with operators illegally running “fraternals” last month.

In the May 16 meeting and order handed down by the commission recommended a corrective action plan in an order the commission adopted.

Action Gaming Inc. of Wheeling, had expressed interest about coming into compliance, the commission said,

Musgrave commended Action Gaming in April, saying it “stepped up in making an effort to resolve its shortcomings.”

“We have already talked to Action Gaming,” added Musgrave. “They have agreed in principal (to fines of $190,000)."

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

“Action’s attorneys came to us,” Musgrave said. “They told us that they want to get through this. They’re willing to abide by this proposal and they want to do it. This will apply to every licensee, across the board.”

Musgrave also said a similar operator, Bucks Inc., which had a representative at the April 29 meeting as well, is expected to approach the commission through its attorneys and be cooperative in ongoing meetings and investigations.

* * *
The West Virginia Lottery Commission Order, adopted May 16, 2014, states that Musgrave recommends the investigative findings and corrective action plan detailed in the report for approval, ordering:

* the contents of the investigation report including all findings and detailed Compliance Plan are approved;

* All licensees will have 30 days to self-report violations in any of the six categories identified in the investigation report and submit a corrective action plan to receive the respective reduced fine. The 30 day window begins upon receipt of notice of the Compliance Plan/Self-Reporting Option.

* After self-reporting and submitting a corrective action plan, a licensee will have 90 days to correct all violations.

* Any licensee that does not self-report and has known violations shall be called before the Commission to show cause as to why they should not be accessed the maximum fine and/or their license should not be suspended or revoked.

*The Director of the Lottery is authorized to carry-out the spirit of this order by negotiating the terms and executing Consent Decrees with any Operator that self-reports violations and accepts the respective reduced fine within the 30 day window.

This includes Action Gaming who has indicated they are working on a corrective action plan and agrees to accept the reduced fine, as well as Bucks, Inc. whose counsel is currently reviewing the findings of the investigation report but was unable to advise his clients prior to (May 16) meeting.

If Bucks, Inc. chooses not to accept the reduced fine and execute a Consent Decree then a show cause hearing shall be scheduled at a later date.

The 30 days window for Action Gaming and Buck’s to accept the reduced civil penalty and execute a Consent Decree with the Lottery is effective (May 16).

The Commission further orders the Director of the Lottery to enforce the spirit of this order.

The order was signed by Kenneth L. Greear, Chairman, West Virginia State Lottery Commission and by Robin Graley, Recording Secretary.