In 2001, the West Virginia Legislature passed the Limited Video Lottery Act. The goal was to regulate, control and tax the previously illegal practice of operating slot machines in bars and fraternal clubs.
The legislation allowed private operators to open small gambling parlors with up to five machines. Fraternal clubs, where many of the gray machines had been parked, were permitted to have ten, but only for use by their members and guests. Many of the fraternals use the profits for their charitable projects.
One of the unintended offshoots, however, has been the emergence of “faux fraternals.” These are social clubs in name only. They have exploited a loophole in the law to open clubs with ten machines and invite in the public.
“The general public was walking in off the street. They were playing the limited video lottery machines. They were ordering drinks,” said Lottery general counsel Danielle Boyd on a recent Talkline. “We were certainly concerned that they were being granted a competitive advantage over the other retail establishments that we regulate.”
The Lottery spent the last year trying to root out these clubs and they’re finally making progress. The agency started by giving the clubs an opportunity to self-report. A few did. The Lottery fined them, but also worked to bring them into compliance.
But the agency knows there are more faux fraternals still out there, so it’s beginning a statewide surprise inspection program.
“We’re going to continue to take a hard look at these places,” Boyd said. “We have investigators in all regions throughout the state.”
And the Lottery expects to get help from other retailers and legitimate fraternals. “Generally speaking, there’s a lot of self-policing that goes on in the limited video lottery world,” Boyd said. “I think that we’ll certainly receive tips and we’ll take those tips very seriously.”
The state had another option 13 years ago; it could have outlawed all the machines, but rounding up hundreds of slots parked in clubs and bars across the state would have been a monumental task. The state chose a more practical and profitable route, though opponents still worry about the impact problem gambling has on lives and families.
Meanwhile, the state Lottery must remain vigilant in its enforcement to keep the promise of having limited video lottery outlets that are rule-following retailers and legitimate fraternal organizations.