Demand made despite favorable Federal District Court ruling
West Virginia video lottery parlors could lose all but one of their machines if they exploit last week's federal ruling that removes limits on the words they can use in advertising, a group representing machine leasing businesses warns.
The West Virginia Amusement & Limited Video Lottery Association has asked parlor owners, which it also represents, to adhere voluntarily to the ad rules that U.S. District Judge Joseph R. Goodwin declared unconstitutional on Friday.
A 2004 state law banned the use of scores of gambling-related terms, including "casino," "jackpot," "Vegas" and "lucky," in the names and advertising of video lottery parlors.
"We believe that advertising restrictions are in the mutual interest of the public and those of us in the limited video lottery business," Association President Anthony "Herk" Sparachane wrote in a Tuesday letter. "Even though it may be legal for limited video lottery to engage in the same sort of advertising as the racetracks, our highest priority is to be responsible good neighbors in the communities we serve."
Sparachane estimates that the leasing companies own about 6,542 of the 8,178 machines operating in West Virginia. He said the leasing companies can limit the number of machines placed in locations that violate the voluntary restrictions while still adhering to contracts requiring them to supply at least one machine.
"If we pull them all out, we're breaking the contract," he said. "We're saying, 'If you advertise, you're going to wake up the next morning and have only one machine.'"
The state Lottery Commission, which regulates the machines and had enforced the targeted ad rules, has authorized 37 companies to lease the terminals to bars and clubs. Sparachane said his group represents 18 of these businesses, while others have agreed to follow its lead.
Sparachane's group did not take part in the lawsuit that triggered Goodwin's ruling. A separate group, the West Virginia Association of Club Owners and Fraternal Services, challenged the ad limits with the help of the American Civil Liberties Union.
Jesse Bane, the owner of two Fayette County video lottery parlors who leads the suing group, did not immediately return phone calls requesting comment Wednesday.
Goodwin granted a temporary injunction to block the rules after the lawsuit argued they illegally impaired the parlors' free speech rights.
"The advertising ban does not directly and materially advance a substantial government interest, and is therefore an impermissible restriction on commercial speech under the First Amendment," Goodwin's ruling said.
The 41-page order also concluded that the ad limits had wrongly stifled the ongoing debate over video lottery machines, offered at 1,658 clubs and bars throughout 53 of the state's 55 counties as of August.
Finding that the ad ban has hid "the extent of this form of gambling from the public eye," Goodwin wrote that it "impedes the public's ability to engage in informed political discourse."
The lottery added these poker and similar casino-themed machines to its system in 2001, when the state outlawed similar, privately owned "gray" machines.
State-issued licenses allow fraternal organizations to offer 10 machines per location, while other private clubs can have five apiece. The ad limits emerged after several of these parlors began declaring themselves "casinos" and the like on flashy outdoor signs that included billboards along highways.
Kanawha County plans to begin holding public hearings Thursday on its 157 video lottery parlors, which together host 731 machines. Foes hope the hearings spur lawmakers to ban the machines or at least reduce the number of permitted parlors.
Supporters counter that the licenses do not expire until 2011. They also cite the $656 million these machines have generated for state agencies and county and local governments since 2001.