March 26, 2003 – Although a Territorial Court judge put a stop to the filing of sealed documents in the case of Southland Gaming vs. Gov. Charles W. Turnbull and others, an attorney for the company says the settlement agreement reached late last week is still in place and still under wraps.
Judge Ive Swan signed an order Wednesday returning the sealed documents to V.I. Justice Department lawyers. He also accepted a motion by both sides in the dispute to dismiss the case with prejudice, meaning it cannot be refiled later. Swan is expected to sign off on the motion Thursday.
A motion for a joint stipulation of dismissal was filed with the court on Friday as part of the agreement. Once the dismissal was accepted, the court had nothing else to do with the Southland case and would not get involved again unless the parties sought further court action, a court administrator explained on Wednesday.
Southland sued the V.I. government first, claiming breech of its 1998 contract with the V.I. Lottery to install video lottery terminals in the territory once video lottery gaming became legal. It became legal in the St. Thomas-St. John district last Dec. 23, when the Legislature overturned an earlier veto by Turnbull of a bill legalizing VLT's.
Turnbull, Licensing and Consumer Affairs Commissioner Andrew Rutnik and V.I. Lottery Director Austin Andrews were named as defendants in the Southland suit.
Several days later, the Attorney General's Office countersued, alleging irregularities in the contract and the company's setup locally and asking the court to declare the agreement void.
On Wednesday, attorney Arturo Watlington, representing Southland, said Swan's order returning the sealed documents to the lawyers who filed them does not affect the fact that the settlement was — and still is — in place.
And because the court is no longer involved, Watlington said, the settlement is "still private."
"The parties are operating based on the stipulated agreement. The law has nothing to do with the operating terms between the parties," he said Wednesday.
The contract — for five years with the options of two additional five-year extensions — called for the installation of VLT's first at stand-alone "entertainment centers" — one on St. Thomas and one on St. Croix — with at least 100 VLT's at each site when the centers first opened and a minimum of 300 machines each if revenues justified them. Additional VLT's were to be installed at airports, racetracks, bars and taverns, nightclubs, restaurants, resorts, hotels and other retail establishments.
At the time V.I. government officials suspended the installations, Southland had about 20 gaming machines in place on St. Thomas, at Bluebeard's Castle Hotel, the Old Mill and the Caribbean Saloon. Watlington said the company was prevented from installing 100 machines at the Wyndham Sugar Bay Resort in February when managers refused delivery because the resort lacked an approved application from the Licensing and Consumer Affairs Department.
As of Sunday — two days after the settlement was reached — six gaming machines installed at the Caribbean Saloon at American Yacht Harbor were still up and running.
Asked on Wednesday whether the machines would continue in operation under the settlement, Watlington declined comment, alluding to the terms of the private agreement.
"Now you're asking a substantive question," he said.
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