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W.Va. Lottery investigates fraternal groups

CHARLESTON, W.Va. -- West Virginia Lottery officials are reviewing records for the 170 limited video lottery outlets licensed as fraternal organizations to verify that they are legitimate fraternal or veterans' groups, Lottery Director John Musgrave told the Lottery Commission on Thursday.

"The Lottery is continuing to take a look at fraternals and how they operate," Musgrave said. "That will be an ongoing process over the next few weeks and, maybe, the next few months."

Musgrave was responding to complaints earlier this year from bar and club owners who said competitors have affiliated with obscure fraternal organizations in order to operate up to 10 video lottery machines, as opposed to the maximum of five allowed for traditional bars and clubs.

Earlier this month, Musgrave sent a letter to all 170 limited video lottery locations operating as fraternals. The letter required the groups to submit a recent letter of approval from the IRS for tax-exempt status as a nonprofit fraternal organization; letters of good standing from the national and state governing bodies for the fraternal organization; a notarized copy of the local charter; a copy of bylaws; a list of chapter officers, with contact numbers; a list of current dues-paying regular members; a copy of the most recent IRS 990 tax form; and a copy of any management agreements.

The letter set a Nov. 15 deadline for the organizations to submit the documents, but Musgrave said Thursday the Lottery has granted more time for the groups to compile all the materials.

He said officers of some long-standing fraternal organizations could not find their original charters and had to have their national headquarters send copies.

Eventually, Musgrave said, he will send inspectors to any sites that fail to comply with the request for documentation.

Also during Thursday's Lottery Commission meeting, commissioners:

• Learned that Lottery revenue continued to lag in October, with gross monthly revenue of $99.54 million down 6.3 percent, or $5.55 million, from October 2012. Revenue is down 15 percent, or $17.66 million, compared to October 2011.

Racetrack video lottery took in $48.6 million, down 4.5 percent from 2012, while limited video lottery was down 3 percent, at $31.47 million.

Table game revenues at the four racetrack casinos fell 31 percent to $3.87 million, with the four casinos facing stiff competition from facilities in Ohio, Pennsylvania and Maryland.

For the first four months of the 2013-14 budget year, Lottery revenue of $415.3 million is down $33.32 million, or 7.5 percent, compared to the same point last year. That revenue is down nearly $58 million compared to 2011.

Racetrack video lottery collections are down about $22 million year-to-date, while limited video lottery is down $7.37 million.

Year-to-date, the state's share of Lottery profits, $180.21 million, is down $14.2 million, or 7.3 percent, from July-October 2012.

• Approved a rule change to allow the four racetrack casinos, and the casino at The Greenbrier, to cash checks for amounts of up to $2,000.

Currently, the maximum amount is $200, but players may cash multiple checks for that amount each day. The rule sets a $2,000 check-cashing maximum per player per day.

• Fined Derrick Video of Charleston a total of $2,500 for a fourth and fifth violation for failing to have a lock on video lottery cash boxes.

• Approved a rule change to allow employees of The Greenbrier resort to gamble at the hotel's casino, as long as they meet entry requirements.

Under the law legalizing The Greenbrier casino, access to the casino is restricted to overnight guests at the hotel, and to persons attending conferences, conventions or other events at the hotel when 400 or more rooms at the hotel are booked.

Last November, the commission liberalized the definition of "event" to permit tour-bus day trips to the casino, as long as the groups are scheduled for lunch or some other nongambling activity at the resort during the visit.

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


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