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HomeNewsArchives3-YEAR-OLD PACT IN PLACE TO RUN VIDEO LOTTERY

3-YEAR-OLD PACT IN PLACE TO RUN VIDEO LOTTERY

July 27, 2001 – If a video lottery bill passed by the Senate last week becomes law, a contract waiting in the wings since 1998 for providing and managing all terminals to host such gaming in the Virgin Islands could take center stage in the territory's ongoing gambling drama.
The five-year contract between Southland Gaming Corp. of the Virgin Islands and the V.I. Lottery provides for 2,000 video terminals, 1,000 in each district, in "entertainment centers." Each center is to accommodate 300 terminals, with at least 100 to be put into operation at the outset. Where, specifically, the centers are to be located is not made clear.
The agreement was signed by Alec Dizon, lottery executive director at the time, and Robert E. Huckabee, Southland president.
Dizon said Friday that Southland was the successful bidder on the video lottery contract. Initially, V.I. Lottery officials had felt that the major market for a video lottery "was cruise ship passengers, rather than proliferating the terminals allover the island," he noted. "We figured they were the ones who had money to spend."
He said he had tried in the Schneider administration to get approval for video lotteries, but the Casino Control Commission nixed the idea. He declined comment on the video lottery legislation passed by the Senate last week.
The legislation, one of numerous amendments to the governor's supplemental appropriations bill approved late July 19, authorizes the executive director of the V.I. Lottery to take immediate steps to implement the games. Austin Andrews, the current lottery executive director, could not be reached for comment Friday.
The 1998 contract provides for the games to be installed in two phases: "Phase I would be for stand-alone entertainment centers, whose key element is video lottery games. Phase II will involve the installation of VLT's in airports, racetracks, bars, taverns, nightclubs, restaurants, resorts, hotels and other retail establishments, as approved by the director [of the V.I. Lottery] in accordance with lottery regulations."
The agreement further states that "any establishment that meets the requirements of the lottery regulations shall be eligible to request installation of VLT's."
One provision states as Southland's goals that at least 65 percent of those hired for the project be V.I. residents, and that, except for gaming hardware and software, 65 percent of the goods and services it provides be purchased locally. The contract also provides for Southland to incur penalties if it does not meet certain obligations, including $1,000 a day for failure to start up entertainment centers as specified.
Put out to bid on Aug. 25, 1998, and signed on Oct. 20, 1998, the contract stipulates that it shall not become effective until the passage of legislation amending the V.I. Code to permit video gaming.
It specifies that Southland will receive between 50 percent and 75 percent of revenues from the entertainment centers, and between 40.5 percent and 48.75 percent of revenues generated at all other VLT locations through the term of the contract. All other revenues are to go to the V.I. Lottery Commission. Sen. David Jones, a video gaming advocate, said Thursday that video lottery revenues could be about $10 million annually.
A call to Southland's office in Wilmington, N.C., was answered "Southland Amusements." The person answering the telephone said she could not say whether Southland Gaming Corp. of the V.I. was a subsidiary of that company. A message was left for Huckabee, who did not return the call by the end of the work day Friday.

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