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Businessman plans to install lottery machines in 'casino'

June 06, 2003|by CANDICE BOSELY

martinsburg@herald-mail.com

MARTINSBURG, W.Va. - Butch Pennington has the building built, the kitchen in place and the heating and air conditioning system ready to go.

All he needs are the video lottery machines, or as they are sometimes called, gray machines.

Pennington, who owns several other businesses in the area, plans to open the Royal Casino and Lounge in front of his auto parts/repair shop on Edwin Miller Boulevard just outside of Martinsburg.

Pennington applied for and received a state permit to install five video lottery machines, but is on a waiting list to order them. Each machine costs $11,000, he said.

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Five is the maximum amount of machines allowed in a business, said Nancy Bulla, public relations manager for the West Virginia Lottery Commission.

"A lot of people like them and a lot of people love playing them," Pennington said. The machines will be casino-style ones, allowing users to play poker, blackjack and other similar games, he said.

Pennington also has five machines in his Lucky Spin Tavern on U.S. 11 south of Martinsburg.

At his newest venue, Pennington said steaks and prime rib will be offered on the weekends, along with daily lunch specials.

"It's a nice place. It looks like a casino in there," he said. He plans to open once the video lottery machines arrive, but did not know when that might be.

A 2,950-square-foot building, it has an occupancy permit for 75 people, he said.

Since the Legislature passed a bill two years ago allowing no more than 9,000 video lottery machines throughout the state, permits have been approved for 5,656 terminals. Of those, 5,025 were operating as of March 31, which is when the last update was done, Bulla said.

To obtain a permit, one must pay various fees, prove at least four years of in-state residency and undergo a criminal history background investigation, which includes fingerprinting by the FBI.

A site survey and inspection is done to make sure the prospective video lottery machine location is at least 150 feet away from another establishment that has machines. The machines cannot be installed in a conveneice store, which is defined by law as a place that sells gasoline, Bulla said.

Lastly, a license to serve alcoholic beverages must be obtained before a license to have video lottery machines is issued, Bulla said. Legislators wanted to make sure the machines were in adult-only businesses, such as bars.

Once the machines are in place, profits are distributed. Two percent goes to the state for administrative costs.

Lottery officials tabulate over a three-month period the average gross sales per day per machine, Bulla said.

That figure is used to determine how much the state will receive to use for PROMISE scholarships, economic development, state park improvements and other purposes.

If the average gross figure per machine per day is between $61 and $80, the state gets 34 percent. If it is from $81 to $100, the state takes 38 percent. The state gets 42 percent if each machine takes in $101 to $120. If the amount is between $121 to $140, the state gets 46 percent.

The most the state can receive is 50 percent, if each machine averages more than $140 in gross sales per day, Bulla said.

Excluding Pennington's latest establishment, 49 other businesses in Berkeley County have received permits to install video lottery machines. In Jefferson County, 20 places received permits, and seven did in Morgan County, according to lottery officials.

Overall, from July 1, 2002, to the end of February, sales from video lottery terminals, excluding those at racetracks, totaled $106 million, Bulla said.

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