CHARLESTON, W.Va. — A federal judge says West Virginia has wrongly stifled the free-speech rights of bars and clubs that host video lottery machines.
U.S. District Judge Joseph R. Goodwin granted a temporary injunction Sept. 28 in WV Association of Club Owners v. Musgrave, blocking the state’s restriction of certain advertising by the lottery parlors.
Goodwin called the limits unconstitutional restriction of commercial speech. He said the limits on ads also impede the public debate over video lottery machines.
The American Civil Liberties Union sued the West Virginia Lottery Commission in February to challenge the ban on behalf of the state Association of Club Owners and Fraternal Services.
“They took away our constitutional rights, and we had to tell them it’s not fair,” said Jesse Bane, the owner of two Fayette County video lottery parlors who leads the association.
Bane said Goodwin’s ruling was a victory for West Virginia’s small-business owners.
“It shows that we’ve contributed hard to the economy, and we’re not these bad people they want to make us out to be,” Bane said.
“We’re West Virginia business owners. We’re not out-of-state racetrack owners, and we should be able to advertise in our state.”
Lottery Commission officials could not be reached for comment Sept. 28.
The lawsuit targets a 2004 state law that bans the use of such words as “casino,” “chance,” “dollar” and “dough” in the names and advertising of video lottery parlors.
The Lottery regulates these machines, which were added to the state lottery system when similar, privately owned video poker “gray” machines were outlawed in 2001.
Fraternal organizations can operate 10 machines per location under state law, while other private clubs can have five apiece. But as the licenses to host these machines were sold, the new clubs began changing the landscape, with many declaring themselves “casinos” on flashy outdoor signs that included billboards along highways.
As of August, there were 8,178 such devices at 1,658 locations throughout 53 of West Virginia’s 55 counties.
Lottery Commission lawyers argued the limits on advertising reflected a “substantial government interest.” Goodwin disagreed in last week’s ruling.
“The advertising ban infringes upon the limited video lottery retailers’ right to speak and impedes the public’s ability to engage in informed political discourse,” Goodwin wrote.
The number of video lottery parlors and their proximity to schools, churches and other businesses have fueled debate over the 2001 legislation. The Vegas-style advertising helped inflame gambling foes and others who oppose the parlors.
Other off-limit words include “game,” “hit,” “kitty,” “luck,” “lucky,” “money,” “roll,” “token,” “wild” and “winning.”
Goodwin concluded that lifting the “ban on commercial speech will bring limited video lottery into the light, thereby providing important information to those who want to play, and those who want to protest.”
“Whether intentional or not, the effect of the ban on limited video lottery advertising is to hide the extent of this form of gambling from the public eye,” the judge’s ruling said.
Not all club owners joined in the lawsuit. The West Virginia Amusement and Limited Video Lottery Association said its members had agreed to comply with the law.
Bane said his group planned to meet with its attorney and hold meetings with members across the state to discuss its next step.
“We would like to start a dialogue with the governor ... and see exactly where we need to be and what is our constitutional rights,” he said.
Kanawha County plans to begin holding public hearings tomorrow on the pros and cons of its 157 video lottery parlors, which together host 731 machines. Those who support the hearings hope they catch the attention of lawmakers. But the licenses authorized in 2001 do not expire until 2011, and legislators say reducing the number of parlors or banning them entirely before then would likely prompt lawsuits.