WHEELING, W.Va. – After 400 West Virginia club, tavern, restaurant and parlor owners paid a total of about $70 million for the right to operate slot machines in 2011, they believed their state Lottery Commission permits would be valid for 10 years.
Members of the West Virginia Amusement & Limited Video Lottery Association now intend to sue state Lottery Director John Musgrave, claiming he is forcing them either to purchase new machines or make $3,000 upgrades to each terminal by the end of 2017 – four years before their permits expire.
“Many of our members feel like they have been subjected to a classic ‘bait and switch,'” said Anthony “Herk” Sparachane, a Wheeling resident and entrepreneur who serves as president of the LVL association. “These West Virginia businesses would not have bid for as many permits, or paid nearly as much for a permit, if they thought that existing terminals would be made obsolete before the end of the permit period.”
The Mountain State adopted the Limited Video Lottery Act in 2001 as a means of regulating illegal “gray machines” found throughout West Virginia at the time. The original 10-year licenses for about 9,000 machines expired in 2011.
According to LVL association attorney William C. Brewer, business operators paid an average of $9,200 in 2011 for new permits to operate each machine until 2021.
It would cost an average of $3,000 to upgrade each of the machines as Musgrave desires, and brand new machines cost an estimated $15,000 to $20,000 each….