- Associated Press - Wednesday, September 24, 2014

CHARLESTON, W.Va. (AP) - Seven video lottery establishments posing as fraternal lodges have been fined by the West Virginia Lottery Commission.

Three establishments must each pay a $1,000 fine. The others were each fined $500.

The commission imposed the fines on Tuesday. Another establishment was given a warning, media outlets reported.

Under state law, fraternal organizations can have up to 10 video lottery machines. The limit for bars and clubs is five machines.

There are 166 fraternal organizations in the state that offer access to video lottery machines. In May, The Lottery gave each of them 30 days to self-report violations, offering reduced fines for infractions brought to the Lottery’s attention. The reduced fines won’t be offered in the future, Lottery director John Musgrave told the commission.

“Now when we go out and find something, we’re going to give them the maximum fine because they didn’t comply,” he says.

The Lottery plans to conduct surprise inspections in the future.

“This should act as a warning to others that they need to be in compliance, or we’re going to take further action in the future,” Musgrave said. “Our auditors and investigators will be visiting locations from time to time unannounced, and we’ll see whether everyone is in compliance. We hope they got the message.”

“Now when we go out and find something, we’re going to give them the maximum fine because they didn’t comply,” he said.

Musgrave says some of the establishments didn’t have membership lists. Some opened their doors to anyone.

Under both state and federal regulations, only members and guests of fraternal organizations are permitted to play video poker at fraternal lodges.

The commission also fined a limited video lottery machine distributor $6,000 for violating state laws regarding fraternal organization.

The Lottery reported revenues of about $105 million for August. That figure is about $4.9 million less than reported revenues in August 2013.


Information from: The Charleston Gazette, https://www.wvgazette.com

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