West Virginia Lottery Fines 'Faux Fraternals'

By Eyre, Eric | The Charleston Gazette (Charleston, WV), September 24, 2014 | Go to article overview

West Virginia Lottery Fines 'Faux Fraternals'


Eyre, Eric, The Charleston Gazette (Charleston, WV)


The West Virginia Lottery Commission fined seven video lottery establishments and a machine distributor a combined $11,000 Tuesday for violating state laws that cover fraternal organizations. The sanctions follow the Lottery's 10-month investigation of so-called "faux fraternals - Limited Video Lottery locations that operate under the guise of being fraternal lodges. As fraternal groups, they're allowed to have 10 video lottery machines, instead of the maximum of five permitted in bars and clubs.

The Lottery only sanctioned establishments that self-reported violations, but the agency plans to conduct surprise inspections at other suspect fraternal organizations in the coming months.

"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, said John Musgrave, Lottery director. "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.

Three Limited Video Lottery locations - Legion of Guardsmen Post in Wheeling, and Blue Knights WV II and Mountaineer Lodge No. 78, both in Clarksburg - received $1,000 fines. Another four establishments - Martinsburg Nest 313 Orioles, Bruceton Mill Nest 302, Terra Alta New 298, and Berkeley County Order of the Orioles - must pay $500 fines. Bunker Hill Order of the Orioles received a warning.

The organizations faced a maximum fine of $10,000, but their penalties were reduced because they cooperated with the Lottery investigation, Musgrave said.

"We had complaints from Moose clubs and different fraternals around the state that these folks were operating like a regular bar or retailer with really no intention of being a fraternal organization, Musgrave said. "Some had no membership list. Some had their door open to anyone.

Under both Lottery rules and U.S. Internal Revenue Service regulations, only members of fraternal organizations and bona fide guests may play video poker machines in locations licensed as fraternal lodges.

Also Tuesday, J&J Amusement, a Martinsburg-based LVL machine distributor, was fined $6,000. …

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