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Issue Date: Vol. 50, No. 11, November 2010, Posted On: 10/14/2010

New W. Va. VLT Bid Process Helps Operators

Marcus Webb
West Virginia VLT bidding, video lottery, video poker, West Virginia Lottery Commission, West Virginia Amusement and Limited Video Lottery Association, coin machine business, gambling business, coin machine operator, vending operator, Joseph Ferrell, Southern Amusement

CHARLESTON, WV -- Operators of video lottery terminals in West Virginia won a victory on Sept. 29 when the state's lottery commission changed its rules to allow current VLT license holders -- most of whom are operators -- to bid on unclaimed licenses in every round during October's bidding process for VLT location contracting.

The bids begin on Oct. 18 and cover the next 10 years of VLT operations -- from July 1, 2011, to June 30, 2021.

Previously, the West Virginia Lottery Commission had planned to use a new set of bidding rules that would have made it easier for locations to eject existing operators and install their own equipment.

The Sept. 29 "pro-operator" rule change appears to have been a preemptive concession by the lottery in face of a lawsuit that was filed by the West Virginia Amusement and Limited Video Lottery Association, protesting the planned "pro-location" rules.

As a result of the rule change, a court hearing on a motion by operators requesting an injunction to bar the pro-location rule change was postponed.

Despite the pro-operator rule change, an attorney for the West Virginia operators association said the lawsuit would probably go forward. Disputes remain about whether the new rules apply, or should apply, to only 1,800 locations (and their respective licenses that are currently unclaimed) or to all 5,000 locations that are up for bid this month.

Operators have strongly protested any administrative changes that threaten their substantial investments in VLT equipment and support capabilities.

Separately, a former West Virginia state representative pled guilty to racketeering and tax charges in federal court on Oct. 6. Prosecutors charged Joseph Ferrell with operating Southern Amusement Co. as an illegal gambling ring in West Virginia and Kentucky. Video pokers are illegal in Kentucky. Ferrell could serve up to 25 years in prison.

As part of a plea bargain, in exchange for Ferrell's guilty plea on certain charges, federal authorities dropped other charges against him, including bribery of legislators. Prosecutors dropped all charges and a restraining order against Southern Amusement.

Ferrell bought the company from the family of a state lawmaker in 1995. Prosecutors asserted that he ran for office chiefly to influence state policy in favor of Southern Amusement. Ferrell must now exit the company, which is legally in the clear to continue VLT operations.

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