Video lottery group sues state lottery

CHARLESTON -- A group of West Virginia retainers and limited video lottery operators is challenging the state lottery's bidding process for permits.

The West Virginia Amusement and Limited Lottery Association filed a suit in Kanawha Circuit Court Aug. 17, asking the court to overturn state Lottery Commission plans to re-bid its 1o-year LVL licenses in three phases, beginning this fall.

The existing 10-year video lottery licenses amount to about 8,100 and will expire June 30, 2011, according to the suit.

In July, the commission voted to put 5,000 licenses up for re-bid in October, followed by rounds of bidding for an additional 1,500 licenses in December, and 1,000 licenses in March.

Attorneys for the West Virginia Amusement and Limited Video Lottery Association said the commission's plan to bid out the licenses in phases will illegally eliminate a preference for current license-holders, intended under the 2001 law legalizing the video machines in bars and clubs around the state.

Under the law, current licensees can "buy" any unclaimed LVL licenses by matching the highest bid for a license in the first round. However, LVL operators believe that by limiting the first round to 5,000 licenses, there will be no unclaimed licenses available.

"The commission's decision to put only 5,000 permits up for bid either deprives current permit holders of their preference...or will put hundreds of Mom and Pop stores out of business," said Anthony Sparachane, the association president.

The West Virginia Amusement and Limited Lottery Association is asking for the court to require state officials to put all of the permits it intends to issue for the next 10 years in the first round of bidding and delay the process. The group is being represented by Robert Kiss.

By law, the commission must complete the bidding process by next summer, the 10th anniversary of limited video lottery play.