CHARLESTON, W.Va. -- Given that limited video lottery traces its origins to the quasi-illegal gray machine gambling of the 1980s and '90s, it's not surprising when LVL machine distributors and retailers attempt to bend state Lottery rules, but testimony to the Lottery Commission on faux fraternal operations was flabbergasting.
Such as Princeton Fraternal Order of Police president Bryan Grimm admitting he's never been to his FOP's "lodge," a video slots facility located three hours away in Harrisville, Ritchie County, and effectively operated by Action Gaming, a video lottery machine distributor based in Wheeling.
Action Gaming was the common thread of the four fraternals called to testify in show cause hearings before the commission last week.
The others were the Monongalia-Preston County FOP, whose "lodge" is in New Martinsville, Wetzel County; the Marshall County FOP, which also has a "lodge" in New Martinsville, across the street from the Mon-Preston gaming hall; and the West Virginia Vietnam Veterans of America state council, based in Huntington, whose "lodge" is in Weirton, Brooke County.
(The president of the Marshall County FOP, Ed Vogler, refused to appear before the Lottery Commission unless subpoenaed. Commissioners responded Friday by ordering that the 10 LVL machines at the FOP's gaming hall be turned off.)
I spoke briefly Friday with Action Gaming owner David Shriver, who called the Lottery's investigation a "witch hunt."
According to testimony, Action Gaming solicited business from each fraternal to operate a 10-machine LVL facility, offering a "turn key" operation, providing everything from "lodge" locations to employees to staff the gaming halls.
All the officers of the fraternal organizations have to do, apparently, is sign a contract and pay all the salaries and expenses.
Princeton FOP officers testified they are losing money on the arrangement. Indeed, the FOP's 2010 IRS 990 filing shows that it had $44,919 in revenue, $51,503 in expenses, and a operating loss of $6,584.
The 990 listed the Princeton FOP's address as 68 18th St. Wheeling, which is -- you guessed it -- the headquarters of Action Gaming.
While Lottery records show the FOP's share of LVL profits for the last four months totaled about $24,800, Grimm testified the FOP lost money each of those months, after salaries and expenses were deducted -- losses he said Action Gaming covers through loans to the FOP.
Lottery officials began looking into the organizations after complaints from bar and club owners, who are limited by law to a maximum of five LVL machines, that LVL machine distributors were setting up faux fraternals in order to have 10 machines per location.
Lottery Director John Musgrave said the four entities issued show cause notices last week drew attention since the "lodges" were all located some distance away from the fraternals. He said Lottery commissioners plan additional show cause hearings, and will probably call a special meeting next month to determine what actions will be taken against the organizations and machine distributors.