11 June 2009

Indicted Company Major Player in W.Va. Lottery System

The Associated Press follows up on the 48-count federal indictment against ex-lawmaker Joe C. Ferrell and his Southern Amusement Co. by focusing on the charges that involve the West Virginia Lottery.

The article cites the company's status as one of the largest providers of "limited" video lottery machines in the state:

The Logan-based Southern Amusement is licensed to lease 675 machines, the maximum allowed for any single business, to bars and clubs that offer the state's "limited'' video lottery.

Of the 37 operators allowed to lease machines to retailers, only one other has as many permits. About 8,100 of the poker- and slot-style lottery machines were hosted at 1,628 bars and clubs across the state last month.

The indictment puts Ferrell "atop an illegal gambling racket that began in West Virginia in mid-1995, when he bought Southern Amusement, and later extended into Kentucky this decade," the article said.

The article also explains that "West Virginia began offering video lottery machines in licensed bars and clubs in 2002, after outlawing similar, privately owned devices found at thousands of locations statewide and widely believed to be paying out illegally. Southern Amusement provided such "gray'' machines until they were banned, and the case's main racketeering count accuses Ferrell of a hand in that illegal gambling."

Five of the counts allege Ferrell bribed a Lottery investigator who serviced his machines while both on the state clock and after-hours, and refrained for issuing citations against both Southern Amusement and its customers for Lottery violations.

The investigator then mailed four disclosure statements over the course of as many years, falsely denying she had received any gifts from any Lottery licensees, the indictment alleges.

AP and The Charleston Gazette report that the Lottery Commission plans to discuss the recently unsealed indictment at its meeting next week.

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