CHARLESTON, W.Va. -- Bidding for 2011-21 state Limited Video Lottery licenses proved to be a jackpot for the West Virginia Lottery, raising a total of nearly $70 million.
The third round of bidding, for the final 657 licenses available, brought in nearly $8 million -- with one bidder accounting for more than half that amount.
Derrick Video and Music of Charleston submitted a winning bid for 350 licenses at $12,000 each, for a total of $4.2 million.
The company, owned by Jerry Derrick, currently is one of two video lottery machine distributors holding the maximum 675 licenses allowed under the state LVL law.
However, Derrick had been shut out in the first two rounds of bidding, leaving his video gaming franchise in jeopardy.
On March 18, Derrick excised a match option to obtain licenses at an amount equal to the highest winning bid for the second round of bidding. He bought 200 licenses at a cost of $15,003 each, for $3,000,600.
Having spent more than $7.2 million, Derrick will be licensed to operate 550 video machines when the new licenses go into effect on July 1, or nearly 20 percent fewer licenses than he currently holds.
Top bid amount for the third round of bidding was $15,000, paid by five bidders for a total of 18 licenses.
Besides Derrick, there was only one other large winning bid in the final round. Progressive Video Lottery of Morgantown bid $1,055,925 for 95 licenses, at a cost of $11,115 each.
Overall, the third round of bidding bought in $7,786,814 for the 657 licenses, at an average of $11,852 each.
In total, bidders paid $68,677,490 for the 7,500 available licenses to operate Limited Video Lottery (LVL) machines in bars and clubs around the state for the next 10 years.
Average cost per license: $9,157.