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Video lottery revenue from bars drops

CHARLESTON, W.Va. -- After watching video lottery revenues from racetracks decline over the past five years, as competing casinos opened in neighboring states, West Virginia Lottery officials have a new concern: a drop in revenues from the usually reliable limited video lottery machines in bars and clubs around the state.

State Lottery Director John Musgrave he hopes the downturn is not part of a trend.

"We know that in the summer and months when there's good weather...a lot of people don't visit these sites as frequently," Musgrave said Thursday.

But he said the economy may be affecting video slots play in the 1,466 bars, clubs and fraternal organizations around the state.

"We have to attribute some of that to the economy," Musgrave said. "People just don't have the money to spend."

For the first two months of the 2013-14 budget year -- from July 1 to Aug. 31 -- limited video lottery has taken in $62.99 million, down $4.37 million, or 6.5 percent, from the same point in 2012.

August limited video lottery revenues of $32.1 million were down $2.28 million, or 6.4 percent, compared to August 2012.

Racetrack video lottery revenues continued their decline in August, falling $4.59 million from August 2012 figures, to $53.9 million -- a drop of nearly 8 percent.

For the first two months of the budget year, racetrack slots collections are down $11.74 million, at $107.6 million.

However, traditional online and scratch-off Lottery games are showing an upswing, bringing in $18.3 million in August, up $1.6 million from August 2012.

Nikki Orcutt, Lottery marketing director, said large Powerball and Hot Lotto jackpots in August caused online sales to jump, while sales of premium $10 and $20 instant games are contributing to a 2 percent increase in revenues from scratch-off games.

Overall, August revenues of $109.63 million are down $6.65 million, or 5.8 percent, from August 2012. The state's share of Lottery profits for the month, $48.2 million, is down $3.1 million.

Also Thursday, the commission:

-- Imposed a $3,000 fine on Kelly McGilton, owner of Kelly's Hot Spot No. 2 in Dunbar. That limited video lottery location housed three machines that were improperly rewired by technicians for Shaffer's Amusement to bypass an electronic switch that notifies the Lottery's central computer when the machine's cash box is opened.

In April, the technicians admitted they had bypassed broken switches on 10 video lottery machines in various locations statewide, and the company was fined $10,000.

The charges against McGilton carried a maximum penalty of a $10,000 fine and revocation of her video lottery licenses, but attorney Tim Lafon argued that she had no involvement in or knowledge of the tampering.

-- Fined American Legion Post 19 in Logan $5,000 for extending credit to video lottery players by holding uncashed checks.

Reach Phil Kabler at philk@wvgazette.com or 304-348-1220.


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