CHARLESTON, W.Va. — The West Virginia Lottery Commission plans to give some limited video lottery operators time to come clean and correct widespread abuse of lottery regulations.
Lottery Director John Musgrave has led a several months-long investigation that determined a number of operators have made deals with retailers to basically control LVL permits, including creating false fraternal organizations.
“We found not only where the operator sets these up, but tries to do it with a fraternal organization in another part of the state, so they get 10 machines. They then manage the whole operation,” Musgrave said Tuesday.
Lottery regulations prohibit those types of deals between operators and retailers of video slot machines. Musgrave said the Lottery Commission has discovered six major infractions being repeated across the state. But instead of taking the licenses away from the operators, like the commission could have done, a new policy will allow the operators an opportunity to make things right.
“They will have to self-report any infraction within 30 days of enactment of the policy. They need to submit a plan of action. The commission is then willing to consider a 90-day period to put that plan into effect and the commission will then decide on levying a fine for such infractions and the fine will be the maximum fine which will be 10-thousand dollars per violation,” Musgrave said.
The new policy is expected to be on the Lottery Commission’s May meeting agenda.
“The recourse could have been to take their license plus a fine, but what we’d like to do is get everyone on the right track and then move forward,” Musgrave said.
The commission began investigating after fielding a number of complaints from legitimate fraternal organizations and smaller LVL operators and retailers who have been “doing it right,” according to Musgrave.
“This is going to take care of these places that were just operating wide-open, pretending to be fraternals, so it’s going to take care of a lot of issues,” he said.
The commission did come to agreement with Wheeling-based Action Game Tuesday that includes Action abiding by the regulations and paying a $190,000 fine.