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Extent of area's future involvement in video poker remains uncl

by Nora Edinger

REGIONAL EDITOR

CLARKSBURG -- With the deadline for reserved video poker machines just three days away, the extent of regional involvement in the state-backed industry remains uncertain.

Only one Harrison County business was among the 122 applications for reserved permits processed as of early Friday, according to Libby White, a Bridgeport native who is marketing director of the state Lottery Commission.

Reserved permits are limited to fraternal organizations and other clubs that had a Class A liquor license prior to an earlier deadline. Other permits will go up for bid later this year.

The local applicant was Enterprise Inc. in the northern part of Harrison County, White said. A handful of other regional organizations have also applied: Little Moe's Inc. in Philippi, the Mannington Moose lodge, the Salem Veterans of Foreign Wars post, the Trails Inn Association in West Union and H.W. Daniels American Legion Post 29 in Elkins.

Whether more regional applications will come in before the Wednesday deadline is a matter for debate.

White said a stack of unprocessed forms came in Friday and she expects many more.

"On Tuesday the 31st, this place will be full of applications," she said of a state gambling initiative that is tied to budget items such as teacher pay raises and scholarships.

She believes operators (machine vendors) are in the last stages of lining up retailers (club and bar owners). She suspects operators will hand deliver all their retailers' applications at once.

Michael Queen and Chris Wakim disagree.

Queen, who works in Clarksburg and Charleston, is a spokesman for the West Virginia Coalition Against Gambling Expansion. Wakim is a Wheeling bar owner and president of the Club Association of West Virginia.

While they approach gambling from opposite sides, both men say small-scale machine users are put off by high costs.

"The small business owners ... have come to the realization that they can't make any money," Wakim said.

There are several layers of application and permit fees. Beyond the reserved machines, permits will go to the highest bidder. White expects the price to go quite high.

Wakim claimed a number of the association's 800 North Central members are dropping out of video poker, although he declined to identify them.

He said fraternal clubs such as the Clarksburg Elks are additionally leaving because of the legal fighting.

The Elks surrendered their machines to Harrison County Prosecutor John Scott after a state police raid. Lodge spokesmen have said they do not plan to apply for the new machines.

Queen also believes the legal climate is contributing to a lack of interest in the machines.

"I think there's going to be a lawsuit frenzy," he said of club and bar owners fighting back over raids and audits, which he terms "selective."

The state Tax Department confirms audits of bars, restaurants and club owners are going on all over the state. The department is looking for unpaid taxes on video poker revenue.

General Counsel Mark Morton said the list of those audited cannot be released by law. He also declined to release an exact count but said there are "quite a number."

Wakim claimed almost all of the state's 135 licensed operators are being audited, including those in the North Central region.

White did say there is one additional issue that may slow down permit applications from Clarksburg specifically.

"In Clarksburg, we have some really good Keno and Powerball sellers," she said.

Retailers, such as Clarksburg bars, may only hold one lottery license. If their traditional lottery profits are high, they may be unwilling to risk switching to video (poker) lottery.

There are several other areas of contention as the Jan. 1 legalization of video poker payouts looms. Here is a quick round up:

n The state has filed a motion to dismiss a lawsuit that challenges the new law's constitutionality.

The Club Association of West Virginia, the primary plaintiff, claims the law places unfair restrictions on who is allowed to own machines.

n Queen said the anti-gambling group he represents will file a related suit Tuesday against the state over coin-drop slot machines used at race tracks. He claims state law technically disallows coin payouts.

n An anonymous source from the vending side of the business said machines are trickling back into some North Central businesses that removed them after recent raids.

Until Jan. 1, machines are legal for entertainment but not for payouts.

"Most of the people depend on these things," he said of club owners taking the risk of resuming illegal operations through December.

n Scott said machines seized from the Clarksburg Elks club will probably be bulldozed this week.

The demolition had been scheduled for two weeks ago, but Scott said there were logistical problems getting all the stored machines to the same place.

He pledged Friday to either destroy or remove from service any machine seized by police.

Regional editor Nora Edinger can be reached at 626-1447 or by e-mail at nedinger@exponent-telegram.com.

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