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NEWS BRIEFS
W.Va. company fighting denial of lottery license
CHARLESTON, W.Va. (AP) — A judge allowed a Harrison County video-lottery operator on Wednesday to keep its license temporarily, a day after West Virginia officials refused to renew it.
The ruling by Kanawha Circuit Judge Jim Stucky gives Buck’s Inc. until Oct. 9 to pursue an appeal. Its annual license would have otherwise expired Wednesday.
A lawyer for the state Lottery Commission said during the emergency hearing that it would petition the state Supreme Court to block Stucky’s order.
Assistant Attorney General L. Wayne Williams said the law doesn’t allow the judge to extend the life of the one-year license. But Stucky cited the potential financial harm facing Buck’s, one of 37 businesses that have provided the lottery’s video poker- and slot-style machines to licensed bars, clubs and fraternal groups.
The Lottery Commission renewed the licenses for all the other operators Tuesday. But it denied Buck’s, invoking an ongoing dispute over “video-enhanced raffle ticket dispensing machines.”
State and federal investigators seized 144 of the devices in January from a customer of Buck’s, the Elks Lodge 482 in Clarksburg. Both the Tax Department, which regulates raffles and bingo, and the Lottery Commission argue such machines violate state law.
The commission on Tuesday cited how Buck’s had helped service and provide needed supplies to those raffle machines, to accuse it of aiding the sort of illicit gambling that the state sought to outlaw in 2001.
That year, the lottery’s “limited” video terminals replaced thousands of poker and slot machines widely believed to have paid out illegally.
“What we’re talking about is the reintroduction of the gray machines,” Williams told Stucky. “They’ve been operating in a way that undermines the fiscal integrity of the limited video-lottery system.”
Both Buck’s and the Elks lodge have challenged the position of state regulators in court. Their lawyers reminded the judge Wednesday that neither has been charged with any crimes. Such cannot be said of another lottery operator, Southern Amusement Co., they noted.
The Logan County business and its owner, Joe C. Ferrell, face a January trial on 48 counts that include racketeering, illegal gambling and the bribing of a Lottery inspector, among other crimes. A federal grand jury indicted the former Democratic state legislator and his company on the felony charges earlier this year.
Southern Amusement is perhaps the lottery’s biggest operator, leasing around 640 machines — one out of every 12 statewide — to more than 120 bars and clubs. Those devices generate an estimated $2.3 million a month. Government’s take is around $1.2 million, or about 6 percent of statewide revenues.
Buck’s machines have reaped $1.8 million so far this year, and raked in $2 million last year. While its 10 machines at the lodge remain offline, it provides 10 devices each to two police-related clubs: the Blue Knights II and the Fraternal Order of Police Mountaineer Lodge 78, both in Harrison County.
A U.S. District judge’s order preserving the assets of Ferrell and his business have prompted the Lottery Commission to leave its license alone. Federal prosecutors sought that order, as they plan to seize at least $5.5 million from the defendants if they’re convicted.
Buck’s had sought Wednesday’s hearing to argue that the commission’s denial violated a May ruling by Stucky, a legal challenge to the suspension of its lottery license. The Elks lodge is also fighting the suspension of its lottery and liquor licenses in that case. The ruling, later detailed in an order filed in July, blocked both lottery license suspensions.
But Williams told Stucky that the Lottery withdrew its suspension effort against Buck’s on Tuesday. He argued that the move left the company and its lawyer, J. Michael Benninger, without an argument.
Benninger countered that the commission failed to inform Buck’s of the withdrawal. If it had, he told Stucky, he would have pursued an administrative appeal instead of requesting the emergency hearing. The judge then agreed to extend the license temporarily.
William Brewer, a lawyer for the Elks lodge, also took part in Wednesday’s hearing. He alleged that the commission has not given the lodge a chance to seek renewal of its lottery license.
Williams noted that the Elks cannot operate its machines without a liquor license, which was suspended following the January raid, and remains so pending an administrative appeal. Stucky allowed the Elks to file for renewal of its lottery license by end of business Thursday.
