AND
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Stephen B. Farmer, Esq.
Farmer, Cline & Arnold
Charleston, West Virginia
Attorney for Cities of Charleston and Huntington, and
Counties of Ohio and Kanawha, West Virginia
and
Robert P. Fitzsimmons, Esq.
Fitzsimmons Law Offices
Wheeling, West Virginia
Attorney for Ohio County, West Virginia
Darrell V. McGraw, Jr., Esq.
Attorney General
Charleston, West Virginia
and
William Herlihy, Esq.
Special Assistant Attorney General
Paula L. Durst, Esq.
Michael B. Stuart, Esq.
Spilman, Thomas & Battle
Charleston, West Virginia
Attorneys for West Virginia Economic
Development Authority
Larry L. Harless, Esq.
Cottageville, West Virginia
Attorney for Reverend Jim Lewis and
John Cooney
and
Greenbrier County Coalition Against Gambling Expansion
and Cabell County Coalition Against Gambling Expansion
Darrell V. McGraw, Jr., Esq.
Attorney General
and
Katherine A. Schultz, Esq.
Senior Deputy Attorney General
Charleston, West Virginia
Attorneys for West Virginia Economic
Development Grant Committee
Darrell V. McGraw, Jr., Esq.
Attorney General
Charleston, West Virginia
and
Thomas R. Goodwin, Esq.
Special Assistant Attorney General
Johnny M. Knisely, II, Esq.
Goodwin & Goodwin
Charleston, West Virginia
Attorneys for West Virginia Lottery Commission
and John Musgrave
Rudolph L. DiTrapano, Esq.
Sean P. McGinley, Esq.
Richard S. Han, Esq.
DiTrapano, Barrett & DiPiero
Charleston, West Virginia
Attorneys for Intervenor West Virginia Racing Association
Thomas P. Maroney, Esq.
Thomas P. Maroney, LC
Attorney for Amicus Curiae,
West Virginia Labor Federation, AFL-CIO
Richard E. Boyle, Jr., Esq.
Kay Casto & Chaney
Attorney for Amicus Curiae,
West Virginia Amusement and Limited Video Lottery
Operators Association, Inc.
Roger D. Hunter, Esq.
Attorney for Amicus Curiae,
School Building Authority of West Virginia
Louis S. Southworth, II, Esq.
Wendel B. Turner, Esq.
Jackson & Kelly
and
Thomas A. Heywood, Esq.
Bowles Rice McDavid Graff & Love
Attorneys for Amici Curiae,
West Virginia Business Roundtable,
West Virginia Business & Industry Council, and
West Virginia Hospitality & Travel Association, Inc.
Vincent Trivelli, Esq.
Stuart Calwell, Esq.
Attorneys for Amicus Curiae,
Affiliated Construction Trades Foundation, a division of the
West Virginia State Building and Construction Trades Council,
AFL-CIO
JUSTICE MAYNARD delivered the Opinion of the Court.
JUSTICE STARCHER concurs and reserves the right to file a concurring opinion.
JUSTICE ALBRIGHT concurs and reserves the right to file a concurring opinion.
1. The State Excess Lottery Revenue Fund statute, W.Va. Code § 29-22-18a, as amended by Acts of the Legislature, Special Session, 2003, Chapter 29, does not violate the separation of powers provision in article five, section one of the West Virginia Constitution.
2. The State Excess Lottery Revenue Fund statute, W.Va. Code § 29-22-18a,
as amended by Acts of the Legislature, Special Session, 2003, Chapter 29, does not violate
the appointments provision in article seven, section eight of the West Virginia Constitution.
3. The State Excess Lottery Revenue Fund statute, W.Va. Code § 29-22-18a,
as amended by Acts of the Legislature, Special Session, 2003, Chapter 29, sets forth
sufficient criteria to guide the West Virginia Economic Development Grant Committee in
its execution of the Legislature's intent in enacting the statute.
4. “In considering the constitutionality of a legislative enactment, courts
must exercise due restraint, in recognition of the principle of the separation of powers in
government among the judicial, legislative and executive branches. Every reasonable
construction must be resorted to by the courts in order to sustain constitutionality, and any
reasonable doubt must be resolved in favor of the constitutionality of the legislative
enactment in question. Courts are not concerned with questions relating to legislative policy.
The general powers of the legislature, within constitutional limits, are almost plenary. In
considering the constitutionality of an act of the legislature, the negation of legislative power
must appear beyond reasonable doubt.” Syllabus Point 1, State ex rel. Appalachian Power
Co. v. Gainer, 149 W.Va. 740, 143 S.E.2d 351 (1965).
5. “Article VI, section 36 of the West Virginia Constitution provides an
exception to the prohibition against lotteries to allow the operation of a lottery which is
regulated, controlled, owned and operated by the State of West Virginia in the manner
provided by general law. Only those lottery operations which are regulated, controlled,
owned and operated in the manner provided by general laws enacted by the West Virginia
Legislature may be properly conducted in accordance with the exception created under article
VI, section 36 of our Constitution.” Syllabus Point 1, State ex rel. Mountaineer Park v.
Polan, 190 W.Va. 276, 438 S.E.2d 308 (1993).
6. “The word 'lottery' is commonly understood to mean 'a scheme for the
distribution of prizes by chance.'” Syllabus Point 1, State v. Matthews, 117 W.Va. 97, 184
S.E. 665 (1936).
7. “The essential elements of a lottery are consideration, prize and chance;
and any scheme or device, by which a person, for a consideration, is permitted to receive a
prize or nothing, as may be determined predominantly by chance, is a lottery.” Syllabus
Point 4, State v. Hudson, 128 W.Va. 655, 37 S.E.2d 553 (1946).
8. The video lottery created pursuant to the Racetrack Video Lottery Act,
W.Va. Code §§ 29-22A-1, et seq., is a lottery which is regulated, controlled, owned and
operated in the manner provided by general laws enacted by the West Virginia Legislature
so that it properly and lawfully may be conducted in accordance with the exception to the
prohibition against lotteries set forth in article VI, section 36 of the West Virginia
Constitution.
9. The video lottery created pursuant to the Limited Video Lottery Act,
W.Va. Code §§ 29-22B-101, et seq., is a lottery which is regulated, controlled, owned and
operated in the manner provided by general laws enacted by the West Virginia Legislature
so that it properly and lawfully may be conducted in accordance with the exception to the
prohibition against lotteries set forth in article VI, section 36 of the West Virginia
Constitution.
10. “It is well established that the word 'shall,' in the absence of language
in the statute showing a contrary intent on the part of the Legislature, should be afforded a
mandatory connotation.” Syllabus Point 1, Nelson v. W.Va. Public Employees Ins. Bd., 171
W.Va. 445, 300 S.E.2d 86 (1982).
Maynard, Justice:
These consolidated cases arise from three petitions seeking writs of mandamus
from this Court in regards to the issuance of revenue bonds by the West Virginia Economic
Development Authority for the purpose of financing several economic development projects
in the State certified by the West Virginia Economic Development Grant Committee pursuant
to W.Va. Code § 29-22-18a(d) (2003).
In case number 31540, Petitioners City of Charleston, City of Huntington, Ohio
County and Kanawha County seek a writ of mandamus from this Court to compel the West
Virginia Economic Development Authority to issue revenue bonds to finance certified
projects for which they received grants. For the reasons stated below, we grant this writ as
moulded.
In case number 31541, Petitioners Rev. Jim Lewis and John Cooney seek a writ of mandamus from this Court to either prevent the issuance of the bonds or at least to mandate that all private corporations and persons who benefit economically from the grants issued by the West Virginia Economic Development Authority be required to pay back to the State, at a low interest rate, the financial equivalent of the economic benefits received from the grants. (See footnote 1) The petitioners also request that the Court refer this matter to a Special Commissioner for the taking of evidence. For the reasons stated below, we deny this writ.
In case number 31564, Petitioners Greenbrier County Coalition Against
Gambling Expansion and Cabell County Coalition Against Gambling Expansion seek a writ
of mandamus against the West Virginia Lottery Commission and Director John Musgrave
requiring the Commission to cease and desist the further operation of video lottery gambling
pursuant to W.Va. Code §§ 29-22A-1, et seq. and 29-22B-101, et seq., and further requiring
the complete shutdown of all other State lottery games until such time as these games are
brought into full compliance with applicable legal requirements. For the reasons stated
below, we deny this writ.
On August 25, 2003, Petitioners the Cities of Charleston and Huntington and
Counties of Ohio and Kanawha filed a petition for a writ of mandamus (“Cities and Counties
Petition”) with this Court against the Development Authority praying that this Court issue
a writ of mandamus ordering the Authority to issue the revenue bonds. Petitioners Rev. Jim
Lewis and John Cooney filed a petition with this Court (“Lewis Petition”) on September 9,
2003, praying for a writ of mandamus to be directed against the West Virginia Economic
Development Authority and others mandating, inter alia, that private corporations and
persons that benefit economically from the grants be required to repay, at a low interest rate,
the equivalent of the economic benefit received from the grants. By order of September 10,
2003, this Court consolidated these two cases and issued a rule to show cause against the
respondents.
On September 16, 2003, Petitioners Greenbrier County Coalition Against
Gambling Expansion and Cabell County Coalition Against Gambling Expansion presented
to this Court their petition (“Coalition Petition”) praying for a writ of mandamus to be
directed against the West Virginia Lottery Commission and Director John Musgrave to, inter
alia, compel the cessation of the operation of all video lottery machines and all other lottery
games until such time that the games are brought into full compliance with all applicable
legal requirements. Finally, on September 22, 2003, the West Virginia Racing Association
moved this Court for leave to intervene in the proceedings initiated by Greenbrier County and
Cabell County Coalitions Against Gambling Expansion. By order of September 23, 2002,
this Court granted the Racing Association's motion for leave to intervene, awarded a rule to
show cause, and consolidated all of the petitions for purposes of consideration and decision.
(See footnote 3)
Petitioners Cities and Counties urge us to find that the Legislature's
amendment of the Excess Lottery Revenue Fund statute cured the constitutional infirmities
found by this Court in Grant Committee I. In Syllabus Point 2 of Grant Committee I, we
held:
Due to the resulting encroachment on the
executive power of appointment, the provisions of
West Virginia Code § 29-22-18a(d)(3)
(Supp.2002) that direct the presiding officers of
each house of the Legislature to submit a list of
prospective candidates to the Governor for the
chief executive's selection of certain members of
the West Virginia Economic Grant Committee are
in violation of the separation of powers provision
found in article five, section one of the West
Virginia Constitution.
In Syllabus Point 3 of Grant Committee I, this Court held:
The provisions of West Virginia Code §
29-22-18a(d)(3) (Supp.2002) that direct the
Legislature's involvement in the appointment
process of the members of the West Virginia
Economic Grant Committee are in violation of the
appointments provision found in article seven,
section eight of the West Virginia Constitution.
Finally, in Syllabus Point 5, we held:
When an enabling statute such as West
Virginia Code § 29-22-18a(d)(3) (Supp.2002)
extends discretion to the executive branch in
contemplation of an expenditure of public funds
with only a broad statement of legislative intent
and insufficient legislative guidance for the
execution of that Legislative intent, the
Legislature has wrongfully delegated its powers to
legislate in violation of article six, section one of
the West Virginia Constitution.
Accordingly, we concluded that it was
incumbent upon the Legislature to amend the
subject legislation to provide for the executive
appointment of the members of the Grant
Committee without use of a submitted list of
nominees from the presiding officers of the two
houses of the Legislature and to further provide
the necessary guidance in the form of legislative
standards that will enable the Committee to
perform its statutory task of reviewing and
selecting among the submitted project
applications in accord with the announced
legislative objective of economic development.
Grant Committee I, 213 W.Va. at ___, 580 S.E.2d at 894.
In response to our holdings in Grant Committee I, the Legislature amended
W.Va. Code § 29-22-18a(d) to provide, in part:
(6) For the purpose of certifying the
projects that will receive funds from the bond
proceeds, a committee is hereby established and
comprised of the governor, or his or her designee,
the secretary of the department of tax and
revenue, the executive director of the West
Virginia development office and six persons
appointed by the governor: Provided, That at least
one citizen member must be from each of the
state's three congressional districts.
(See footnote 4)
(Footnote
added.)
We find that this amendment conforms to our directive in Grant Committee I
to amend the statute to provide for the executive appointment of the members of the Grant
Committee without use of a submitted list of nominees from the presiding officers of the two
houses of the Legislature. Accordingly, we hold that the State Excess Lottery Revenue Fund
statute, W.Va. Code §§ 29-22-18a, as amended by Acts of the Legislature, Special Session,
2003, Chapter 29, does not violate the separation of powers provision in article five, section
one of the West Virginia Constitution. We also hold that the State Excess Lottery Revenue
Fund statute, W.Va. Code §§ 29-22-18a, as amended by Acts of the Legislature, Special
Session, 2003, Chapter 29, does not violate the appointments provision in article seven,
section eight of the West Virginia Constitution.
Also, in response to this Court's finding in Grant Committee I that the
Legislature failed to provide suitable legislative standards for achieving economic
development, the Legislature amended W.Va. Code § 29-22-18a(d) to provide:
(8) When determining whether or not to certify a
project, the committee shall take into
consideration the following:
(A) The ability of the project to leverage other
sources of funding;
(B) Whether funding for the amount requested in
the grant application is or reasonably should be
available from commercial sources;
(C) The ability of the project to create or retain
jobs, considering the number of jobs, the type of
jobs, whether benefits are or will be paid, the type
of benefits involved and the compensation
reasonably anticipated to be paid persons filling
new jobs or the compensation currently paid to
persons whose jobs would be retained;
(D) Whether the project will promote economic
development in the region and the type of
economic development that will be promoted;
(E) The type of capital investments to be made
with bond proceeds and the useful life of the
capital investments; and
(F) Whether the project is in the best interest of
the public.
(9) No grant may be awarded to an individual or
other private person or entity. Grants may be
awarded only to an agency, instrumentality or
political subdivision of this state or to an agency
or instrumentality of a political subdivision of this
state.
The project of an individual or private person or
entity may be certified to receive a low-interest
loan paid from bond proceeds. The terms and
conditions of the loan, including, but not limited
to, the rate of interest to be paid and the period of
the repayment, shall be determined by the
economic development authority after considering
all applicable facts and circumstances.
* * *
(11) The committee may not certify a project
unless the committee finds that the project is in
the public interest and the grant will be used for a
public purpose. For purposes of this subsection,
projects in the public interest and for a public
purpose include, but are not limited to:
(A) Sports arenas, fields[,] parks, stadiums and
other sports and sports-related facilities;
(B) Health clinics and other health facilities;
(C) Traditional infrastructure, such as water and
wastewater treatment facilities, pumping facilities
and transmission lines;
(D) State-of-the-art telecommunications
infrastructure;
(E) Biotechnical incubators, development centers
and facilities;
(F) Industrial parks, including construction of
roads, sewer, water, lighting and other facilities;
(G) Improvements at state parks, such as
construction, expansion or extensive renovation
of lodges, cabins, conference facilities and
restaurants;
(H) Railroad bridges, switches and track
extension or spurs on public or private land
necessary to retain existing businesses or attract
new businesses;
(I) Recreational facilities, such as amphitheaters,
walking and hiking trails, bike trails, picnic
facilities, restrooms, boat docking and fishing
piers, basketball and tennis courts, and baseball,
football and soccer fields;
(J) State-owned buildings that are registered on
the national register of historic places;
(K) Retail facilities, including related service,
parking and transportation facilities, appropriate
lighting, landscaping and security systems to
revitalize decaying downtown areas; and
(L) Other facilities that promote or enhance
economic development, educational opportunities
or tourism opportunities thereby promoting the
general welfare of this state and its residents.
This Court now holds that the State Excess Lottery Revenue Fund statute,
W.Va. Code §§ 29-22-18a, as amended by Acts of the Legislature, Special Session, 2003,
Chapter 29, sets forth sufficient criteria to guide the West Virginia Economic Development
Grant Committee in its execution of the Legislature's intent in enacting the statute. Having
made these initial determinations, we now proceed to consider the new challenges to W.Va.
Code § 29-22-18a (2003).
The issues raised in the Cities and Counties Petition, the Coalition Petition, and
the Intervenor Racing Association Brief concern the constitutionality of the State's video
lottery statutes. According to W.Va. Code § 29-22-18a(a) “[t]here is continued a special
revenue fund within the state lottery fund in the state treasury which is designated and known
as the 'state excess lottery revenue fund.'” Pursuant to W.Va. Code § 29-22-18a(b), for the
fiscal year beginning July 1, 2003, the Lottery Commission was directed to deposit
$19,000,000.00 from the state excess lottery revenue fund into the economic development
project fund to repay the principal, interest, and redemption premium, if any, on the revenue
bonds issued by the Economic Development Authority to pay all or a part of the cost of
constructing, equipping, improving, and maintaining the projects certified by the Economic
Development Grant Committee. W.Va. Code § 29-22-18a(d)(1) and (2). Revenues received
under the provisions of W.Va. Code §§ 29-22A-10b and 10c of the Racetrack Video Lottery
Act, and the Limited Video Lottery Act, W.Va. Code §§ 29-22B-101 to 1903, except
amounts due the Lottery Commission under W.Va. Code § 29-22B-1408(a)(1), are to be
placed in the State Excess Lottery Revenue Fund pursuant to W.Va. Code § 29-22-18a(a).
In sum, because the revenue bonds issued by the Development Authority to fund the grants
are paid for by video lottery proceeds generated under the Racetrack Video Lottery Act and
the Limited Video Lottery Act, the viability of the grants depends on the constitutionality of
these two Acts.
We note at the outset that those who challenge the constitutionality of
Legislative enactments face a heavy burden.
(See footnote 5)
The question, whether a law be void for its
repugnancy to the constitution, is, at all times, a
question of much delicacy, which ought seldom,
if ever, to be decided in the affirmative, in a
doubtful case. The court, when impelled by duty
to render such a judgment, would be unworthy of
its station, could it be unmindful of the solemn
obligations which that station imposes. But it is
not on slight implication and vague conjecture
that the legislature is to be pronounced to have
transcended its powers, and its acts to be
considered as void. The opposition between the
constitution and the law should be such that the
judge feels a clear and strong conviction of their
incompatibility with each other.
Fletcher v. Peck, 10 U.S. (6 Cranch) 87, 128, 3 L.Ed. 162, 175 (1810). “A court has a duty
to attempt to find a proper basis for upholding the validity of a legislative enactment when
its constitutionality is challenged[.]” State ex rel. Appalachian Power Co. v. Gainer, 149
W.Va. 740, 746-47, 143 S.E.2d 351, 357 (1965) (citations omitted). Also, “[c]ourts must
use restraint in the exercise of their power to declare legislative acts to be unconstitutional.”
Gainer, 149 W.Va. at 747, 143 S.E.2d at 357 (citation omitted). To this end, we have held:
In considering the constitutionality of a
legislative enactment, courts must exercise due
restraint, in recognition of the principle of the
separation of powers in government among the
judicial, legislative and executive branches.
Every reasonable construction must be resorted to
by the courts in order to sustain constitutionality,
and any reasonable doubt must be resolved in
favor of the constitutionality of the legislative
enactment in question. Courts are not concerned
with questions relating to legislative policy. The
general powers of the legislature, within
constitutional limits, are almost plenary. In
considering the constitutionality of an act of the
legislature, the negation of legislative power must
appear beyond reasonable doubt.
Syllabus Point 1, State ex rel. Appalachian Power Company v. Gainer, supra.
As originally enacted, our State constitution prohibited lotteries. According
to former Article VI, Section 36, “[t]he legislature shall have no power to authorize lotteries
or gift enterprises for any purpose, and shall pass laws to prohibit the sale of lottery or gift
enterprise tickets in this State.” On November 6, 1984, the voters of the State ratified an
amendment to Article VI, Section 36 to allow the Legislature to “authorize lotteries which
are regulated, controlled, owned and operated by the State of West Virginia in the manner
provided by general law, either separately by this State or jointly or in cooperation with one
or more states[.]” State ex rel. Mountaineer Park v. Polan, 190 W.Va. 276, 438 S.E.2d 308
(1993). Shortly thereafter, the Legislature enacted the State Lottery Act, W.Va. Code §§ 29-
22-1 to -28, the purpose of which was,
to establish and implement a state-operated lottery
under the supervision of the state lottery
commission and the director of the state lottery
office who shall be appointed by the governor and
hold broad authority to administer the system in a
manner which will provide the state with a highly
efficient operation.
W.Va. Code § 29-22-2 (1985).
In 1993, as a result of the Lottery Commission's expansion of its lottery
operations to include an electronic video lottery game at Mountaineer Park's thoroughbred
race track in Hancock County, this Court was faced with the question,
whether the Constitution requires the legislature
to pass laws which prescribe: (1) the manner in
which electronic video lottery operations are
regulated, controlled, owned and operated before
any can be properly conducted; and (2) sufficient
standards to guide the Lottery Commission so that
the delegation of authority is constitutional and
does not vest the Lottery Commission with
uncontrolled discretion.
State ex rel. Mountaineer Park v. Polan, 190 W.Va. at 279, 438 S.E.2d at 311 (footnote
omitted). In Syllabus Point 1 of Mountaineer Park, we held:
Article VI, section 36 of the West Virginia
Constitution provides an exception to the
prohibition against lotteries to allow the operation
of a lottery which is regulated, controlled, owned
and operated by the State of West Virginia in the
manner provided by general law. Only those
lottery operations which are regulated, controlled,
owned and operated in the manner provided by
general laws enacted by the West Virginia
Legislature may be properly conducted in
accordance with the exception created under
article VI, section 36 of our Constitution.
Applying this rule to the facts before the Court, we concluded that,
because the legislature has not enacted general
laws for the regulation, control, ownership and
operation of electronic video lottery, and because
the legislature failed to prescribe adequate
standards in the State Lottery Act to guide the
Lottery Commission in the exercise of the power
conferred upon it with respect to electronic video
lottery, the Lottery Commission was without
authority under the Constitution to establish
electronic video lottery.
190 W.Va. at 285-86, 438 S.E.2d at 317-18. We did note, however that “[t]he legislature in
subsequent legislation could, of course, amend [W.Va. Code §§ 29-22-1, et seq. ] to clearly
state that video gambling devices are part of the lottery system.” 190 W.Va. at 285, 438
S.E.2d at 317.
(See footnote 6)
The Legislature quickly addressed this Court's holding in Mountaineer Park
and enacted the Racetrack Video Lottery Act, W.Va. Code §§ 29-22A-1, et seq., in 1994.
The purpose of the Act is “to define and provide specific standards for the operation of video
lottery games at pari-mutuel racing facilities licensed by the state racing commission[.]”
W.Va. Code § 29-22A-2(e) (1994). The Act defines video lottery as,
a lottery which allows a game to be played
utilizing an electronic computer and an interactive
computer terminal device, equipped with a video
screen and keys, a keyboard or other equipment
allowing input by an individual player, into which
the player inserts coins, currency, vouchers or
tokens as consideration in order for play to be
available, and through which terminal device the
player may receive free games, coins, tokens or
credit that can be redeemed for cash, annuitized
payments over time, a non-cash prize or nothing,
as may be determined wholly or predominantly by
chance. “Video lottery” does not include a lottery
game which merely utilizes an electronic
computer and a video screen to operate a lottery
game and communicate the results of the game,
such as the game “Travel”, and which does not
utilize an interactive electronic terminal device
allowing input by an individual player.
W.Va. Code § 29-22A-3(aa) (1994). “Video lottery game” is defined as,
a commission approved, owned and controlled
electronically simulated game of chance which is
displayed on a video lottery terminal and which:
(1) Is connected to the commission's central
control computer by an on-line or dial-up
communication system;
(2) Is initiated by a player's insertion of coins,
currency, vouchers or tokens into a video lottery
terminal, which causes game play credits to be
displayed on the video lottery terminal and, with
respect to which, each game play credit entitles a
player to choose one or more symbols or numbers
or to cause the video lottery terminal to randomly
select symbols or numbers;
(3) Allows the player to win additional game play
credits, coins or tokens based upon game rules
which establish the random selection of winning
combinations of symbols or numbers or both and
the number of free play credits, coins or tokens to
be awarded for each winning combination of
symbols or numbers or both;
(4) Is based upon computer-generated random
selection of winning combinations based totally or
predominantly on chance;
(5) In the case of a video lottery game which
allows the player an option to select replacement
symbols or numbers or additional symbols or
numbers after the game is initiated and in the
course of play, either: (A) Signals the player, prior
to any optional selection by the player of
randomly generated replacement symbols or
numbers, as to which symbols or numbers should
be retained by the player to present the best
chance, based upon probabilities, that the player
may select a winning combinations; (B) signals
the player, prior to any optional selection by the
player of randomly generated additional symbols
or numbers, as to whether such additional
selection presents the best chance, based upon
probabilities, that the player may select a winning
combination; or (C) randomly generates
additional or replacement symbols and numbers
for the player after automatically selecting the
symbols and numbers which should be retained to
present the best chance, based upon probabilities,
for a winning combination, so that in any event,
the player is not permitted to benefit from any
personal skill, based upon a knowledge of
probabilities, before deciding which optional
numbers or symbols to choose in the course of
video lottery game play;
(6) Allows a player at any time to simultaneously
clear all game play credits and print a redemption
ticket entitling the player to receive the cash value
of the free plays cleared from the video lottery
terminal; and
(7) Does not use the following game themes
commonly associated with casino gambling:
Roulette, dice, or baccarat card games: Provided,
That games having a display with symbols which
appear to roll on drums to simulate a classic
casino slot machine, game themes of other card
games and keno may be used.
W.Va. Code § 29-22A-3(y)(1)-(7) (1999).
In 2001, the Legislature enacted the Limited Video Lottery Act, W.Va. Code
§§ 29-22B-101, et seq., the purpose of which “was to establish a single state owned and
regulated video lottery thus allowing the State to collect revenue therefrom, control the
operators of the machines, and stem the proliferation of gambling in the State.” Club Ass'n
v. Wise, 293 F.3d 723, 724 (4th Cir. 2002) (footnote omitted).
(See footnote 7)
The Act provides that all
persons conducting limited video lottery on their premises must possess a video lottery
retailer's license. W.Va. Code § 29-22B-501(d) (2001). It makes video gambling machines
per se illegal gambling devices which may be seized and destroyed as illegal contraband.
W.Va. Code § 29-22B-1801 (2001). Finally, those who possess unauthorized machines are
subject to criminal prosecution. W.Va. Code § 29-22B-1703 (2001). Generally, the
provisions of the Limited Video Lottery Act concerning the regulation and operation of video
lottery machines are the same or substantially similar to the provisions of the Racetrack
Video Lottery Act.
The Coalition Petitioners now argue that the video lottery games authorized by
the video lottery statutes constitute video gambling and not a lottery. The petitioners cite for
support this Court's declaration in Mountaineer Park that “electronic video lottery is
different from the common state-run lottery games, and has been defined as 'video poker,
keno and blackjack,'” 190 W.Va. at 284, 438 S.E.2d at 316, and U.S. v. Dobkin, 188 W.Va.
209, 212, 423 S.E.2d 612, 615 (1992), in which this Court found that “[video poker]
machines . . . have no relation whatsoever to a lottery or raffle.”
(See footnote 8)
In addition, petitioners aver
that the 1984 electorate which approved of a lottery intended only to bring back state-run
ticket lotteries when it voted to amend the constitution, not “hard-nosed” video gambling
machines.
This Court has previously defined the term “lottery.” In State v. Matthews, 117
W.Va. 97, 184 S.E. 665 (1936), we stated in Syllabus Point 1 that “[t]he word “lottery” is
commonly understood to mean 'a scheme for the distribution of prizes by chance.'” Later in
Syllabus Point 4 of State v. Hudson, 128 W.Va. 655, 37 S.E.2d 553 (1946), this Court held
that “[t]he essential elements of a lottery are consideration, prize and chance; and any scheme
or device, by which a person, for a consideration, is permitted to receive a prize or nothing,
as may be determined predominantly by chance, is a lottery.” Even though Hudson is almost
sixty years old, its three-pronged definition of lottery “is still accepted by the overwhelming
majority of jurisdictions, as well as the United States Supreme Court.” Opinion Of The
Justices, 795 So.2d 630, 635 (Ala. 2001) (footnote omitted). See also 54 C.J.S. Lotteries §
2 (1987) (“A lottery is defined . . . as a scheme for the distribution of prizes or things of value
by lot or chance among persons who have paid, or agreed to pay, a valuable consideration
for the chance to obtain a prize[.]” (Footnote omitted.)).
In State v. Hudson, supra, the defendant asserted that the operation of a punch
board was not a lottery so as to be prohibited under W.Va. Code § 61-10-11 (1939).
(See footnote 9)
Specifically, the activity at issue involved,
punching numbers from the board, which was
four or five inches long and three inches wide.
The winning number was concealed at the top and
a controlling or tip number openly appeared
elsewhere on the board. Certain tickets were
placed or fastened in the board in such manner
that a person who had purchased a chance could,
by punching a particular place on the surface,
eject from a small compartment or section a roll
of paper which bore a specific number. In
operating the board, the person keeps the rolls
which carry his tip number until all the sections of
the board are punched. The concealed number is
then exposed. The person who has a tip number
and a number which corresponds with the
concealed number is the winner of the prize.
State v. Hudson, 128 W.Va. at 659, 37 S.E.2d at 556. This Court used the definition of
lottery set forth in Syllabus 4 of Hudson to conclude that the operation of the punch board
was a lottery.
It is clear that all of the elements of a lottery are
present in the case at bar. Those who participated
in the operation of the punch board paid for the
right to share in the distribution of a prize, and the
result of their venture depended entirely upon
chance. No skill was required of any person who
punched a number from the board, and the prize
consisted of money. The punch board described
in the evidence is a lottery, and this Court so
holds.
State v. Hudson, 128 W.Va. at 666, 37 S.E.2d at 559.
Shortly, thereafter, this Court again had the opportunity to determine whether
a certain activity constituted a lottery. In State v. Greater Huntington Theatre Corp., 133
W.Va. 252, 55 S.E.2d 681 (1949), this Court affirmed judgment against the defendant for
conducting a lottery in violation of W.Va. Code § 61-10-11. The activity at issue concerned
a “give away” night at local theaters whereby movie patrons who purchased the price of
admission and registered for a drawing won cash prizes if their names were drawn. In
applying the definition of lottery set forth in State v. Hudson, this Court concluded that a
purchase of a ticket for theater entertainment constituted consideration for a chance to win
a prize, and that the right to a prize was determined by chance. Therefore, the “give away”
night was a lottery prohibited by W.Va. Code § 61-10-11.
More recently, in State v. Wassick, 156 W.Va. 128, 191 S.E.2d 283 (1972), a pinball machine distributor appealed his conviction for violating W.Va. Code § 61-10-11.
The specific issue was whether “free plays” on a pinball machine constituted a prize under
the definition of lottery. This Court determined that they did and affirmed the judgment
below. In explaining its decision, the Court stated:
The device used in the instant case was a
multiple-coin pinball machine with complicated
features that were seemingly designed for
“payoffs” to be made in the use thereof. The
“free plays” provided for in such machine are a
prize because they have some value to the player
either in playing additional games without charge
or receiving a “payoff” and the fact that the “free
games” are won predominantly by chance for a
consideration because of the coins placed in the
machine, we hold it to be a lottery per se under
the lottery statute of this State.
State v. Wassick, 156 W.Va. at 136, 191 S.E.2d at 288. Thus, a review of the cases cited
above indicates that this Court has traditionally applied its definition of a lottery broadly to
include a number of different activities utilizing various devices including a punch board, a
drawing, and a pinball machine. We will now determine whether video lottery machines as
defined under the Racetrack Video Lottery Act and the Limited Video Lottery Act fit within
this Court's broad definition of lottery.
The Racetrack Video Lottery Act and the Limited Video Lottery Act define
video lottery as a lottery in which the player inserts coins and currency “as consideration in
order for play to be available[.]” W.Va. Code §§ 29-22A-3(aa) (1999) and 29-22B-330
(2001) (emphasis added). In regards to the “prize” element, video lottery allows the player
to receive free games or a voucher that can be redeemed for cash, a noncash prize or nothing.
Id.
(See footnote 10)
Concerning the element of chance, both Acts define a video lottery game as “a
simulated game of chance.” W.Va. Code §§ 29-22A-3(y) (1999) and 29-22B-332 (2001).
In addition, the game “[i]s based upon computer-generated random selection of winning
combinations based totally or predominantly on chance[.]” W.Va. Code §§ 29-22A-3(y)(4)
and 29-22B-332(4). Moreover, video lottery is specifically defined as a lottery in which
prizes may be awarded “as may be determined wholly or predominantly by chance.” W.Va.
Code §§29-22A-3(aa) and 29-22B-330.
We also note the legislative findings in W.Va. Code § 29-22A-2(a) (1994) of
the Racetrack Video Lottery Act that “limited video lottery games authorized by this article
are “lotteries” as that term is commonly understood and as that term is used in West Virginia
Constitution, article VI, section thirty-six, the video lottery games authorized by this article
being lottery games which utilize advanced computer technology[.]” The same legislative
findings are made in W.Va. Code § 29-22B-201(2) (2001) of the Limited Video Lottery Act.
This Court reviews legislative findings with great deference. In Syllabus Point 2 of State ex
rel. Ohio Cty. Comm'n v. Samol, 165 W.Va. 714, 275 S.E.2d 2 (1980), we held that “[a]bsent
a claim that legislative findings are irrational or have no bearing on a legitimate State
purpose, they are not subject to judicial investigation.” Even “the legislative finding of a
juristic fact is entitled to great weight and serious consideration[.]” State ex rel. Cashman
v. Sims, 130 W.Va. 430, 449, 43 S.E.2d 805, 817 (1947) (citation omitted). We find,
therefore, that video lottery as created in the Racetrack Video Lottery Act and the Limited
Video Lottery Act constitutes a lottery for the purposes of W.Va. Const., Art. VI, § 36.
The Coalition petitioners aver, however, that even if the Court finds that video
lottery is a lottery, it is not sufficiently “regulated, controlled, owned and operated” by the
State as required by the exception for authorized lotteries in W.Va. Const., Art. VI, § 36.
Instead, say the petitioners, the video lottery machines are operated, controlled and owned
by their private manufacturers, operators, and retailers. Again, this Court disagrees.
A plain reading of W.Va. Const., Art. VI, § 36 indicates that the exception for
authorized lotteries does not require lotteries that are regulated, controlled, owned and
operated by the State in an absolute sense, but rather “in the manner provided by general
law.” The general law in the instant case is provided in the Racetrack Video Lottery Act and
the Limited Video Lottery Act. The legislative findings of both Acts indicate:
(b) The Legislature further finds and
declares that the state can control, own and
operate a video lottery by possessing a proprietary
interest in the main logic boards, all erasable,
programmable read-only memory chips used in
any video lottery equipment or games, and
software consisting of computer programs,
documentation and other related materials
necessary for the video lottery system to be
operated. The state may acquire a proprietary
interest in video lottery game software, for
purposes of this article, through outright
ownership or through an exclusive product license
agreement with a manufacturer whereby the
manufacturer retains copyrighted ownership of
the software but the license granted to the state is
nontransferable and authorizes the state to run the
software program, solely for its own use, on the
state's central equipment unit and electronic video
terminals networked to the central equipment unit.
(c) The Legislature further finds and
declares that the state can control and regulate a
video lottery if the state limits licensure to a
limited number of video lottery facilities located
at qualified horse or dog racetracks, extends strict
and exclusive state regulation to all persons,
locations, practices and associations related to the
operation of licensed video lottery facilities, and
provides comprehensive law enforcement
supervision of video lottery activities.
W.Va. Code §§ 29-22A-2(b) and (c) (1994) and 29-22B-202 (2001).
(See footnote 11)
Our review of the challenged Acts indicates that the State's regulation, control,
ownership, and operation of video lottery are extensive and are certainly sufficient to bring
the video lottery within the scope of the exception for authorized lotteries in W.Va. Const.,
Art. VI, § 36. For example, video lottery terminals for use at licensed racetracks must be
approved by the Lottery Commission and must conform to the exact specifications of the
video lottery terminal prototype tested and approved by the Commission. W.Va. Code § 29-
22A-5(f) (1994). The Lottery Commission directly or through a third-party vendor,
maintains a central site system of monitoring the lottery terminals which may immediately
disable the video lottery games and video lottery terminals. W.Va. Code §§ 29-22A-6(14)(h)
(2001) and 29-22B-305 (2001). Applicants for a video lottery license must meet several
qualifications in order to be approved. W.Va. Code §§ 29-22A-7 (2000) and 29-22B-502
(2001). Finally, the Lottery Commission is considered to own the main logic boards and all
erasable programmable read-only memory chips. W.Va. Code §§ 29-22A-6(a)(7) (2001) and
29-22B-311 (2001). We conclude, therefore, that video lottery is “regulated, controlled,
owned and operated by the State of West Virginia in the manner provided by general law”
within the scope of the exception to the prohibition against lotteries in W.Va. Const., Art. VI,
§ 36.
Accordingly, we hold that the video lottery created pursuant to the Racetrack
Video Lottery Act, W.Va. Code §§ 29-22A-1, et seq., is a lottery which is regulated,
controlled, owned and operated in the manner provided by general laws enacted by the West
Virginia Legislature so that it properly and lawfully may be conducted in accordance with
the exception to the prohibition against lotteries set forth in article VI, section 36 of the West
Virginia Constitution. Further, we hold that the video lottery created pursuant to the Limited
Video Lottery Act, W.Va. Code §§ 29-22B-101, et seq., is a lottery which is regulated,
controlled, owned and operated in the manner provided by general laws enacted by the West
Virginia Legislature so that it properly and lawfully may be conducted in accordance with
the exception to the prohibition against lotteries set forth in article VI, section 36 of the West
Virginia Constitution.
Second, the petitioners assert that according to the provisions of W.Va. Code
§ 29-22-18a(d)(9) (2003), the financial equivalent of the economic benefit received by
private entities from State monies must be repaid, at a low rate of interest, to the State. The
petitioners misread the statute. The statute provides that “[g]rants may be awarded only to
an agency, instrumentality or political subdivision of this state or to an agency or
instrumentality of a political subdivision of this state.” Further, “[t]he project of an
individual or private person or entity may be certified to receive a low-interest loan paid from
bond proceeds.” The exhibits filed with this Court indicate that the forty-nine applicants
certified to receive economic development grants were agents, instrumentalities, or political
subdivisions of the State or an agency or instrumentality of a political subdivision. Finally,
to the extent that the petitioners challenge the basic funding mechanism provided in W.Va.
Code § 29-22-18a, such a challenge was rejected by this Court in Grant Committee I.
Therefore, we find no merit to the petitioners' argument on this issue.
Third, we reject the petitioners' constitutional challenges to W.Va. Code § 29-
22A-18a and to the projects certified by the Grant Committee. Specifically, the petitioners
aver that the economic grants amount to violations of the due process rights of “smaller,
publicly unsubsidized retail, service and entertainment enterprises.” The petitioners also
assert that the grants amount to an unconstitutional taking of these smaller businesses'
property. It appears to this Court that these constitutional arguments rest at least in part on
the proposition that the grants at issue are not for a public purpose, but rather will
predominantly aid private commercial interests. However, we heretofore rejected the same
claim in Grant Committee I.
Concerning challenges to the individual projects certified, the Legislature has
reposed broad discretion in the Grant Committee to select economic development projects
that meet with the Legislature's declared objective of economic development. After carefully
reviewing the pleadings and exhibits submitted to this Court, we are unable to conclude that
the projects certified by the Grant Committee failed to take into consideration the
Legislature's directives set forth in W.Va. Code §§ 29-22-18a(d)(8)(A) through (F) and
(11)(A) through (L).
Finally, the petitioners assert that the economic grants amount to “the single
biggest anti-woman, sexist operation of the State in its 140-year history.” Specifically, it
appears that the petitioners' argument is that the grants at issue will result in the creation of
retail, service, and entertainment jobs in which, petitioners allege, women traditionally have
received less pay than their male counterparts and are systematically and disproportionately
subjected to employment injustices. Because we find that such a claim is speculative, we
conclude that the petitioners have failed to state a cause of action. Accordingly, we find no
merit to the petitioners' averments on this issue.
(See footnote 13)
In sum, this Court has determined that the Legislature cured the constitutional
infirmities in W.Va. Code § 29-22-18a by amending that statute to conform to this Court's
directives in Grant Committee I. We also have found that the video lottery created by the
Racetrack Video Lottery Act and the Limited Video Lottery Act, which serves as the funding
source of the revenue bonds issued by the Economic Development Authority pursuant to
W.Va. Code § 29-22-18a, is a lottery which is regulated, controlled, owned and operated in
the manner provided by general laws of the Legislature within the scope of the exception to
the prohibition against lotteries in W.Va. Const., Art. VI, § 36. Finally we have rejected all
other legal challenges brought against W.Va. Code § 29-22-18a, the certification of the
projects by the Economic Development Grant Committee, and the issuance of the revenue
bonds by the Development Authority. Accordingly, this Court denies the writs prayed for
by the petitioners in case numbers 31541 and 31564.
In case number 31540, the Cities and Counties petitioners urge this Court to
issue a writ of mandamus to compel the Economic Development Authority to issue revenue
bonds in accord with W.Va. Code § 29-22-18a(d)(1) (2003) in order to finance the projects
certified by the Grant Committee and particularly the certified projects sponsored by the
petitioners. According to W.Va. Code § 29-22-18a(d)(1) in relevant part,
The West Virginia economic development
authority created and provided for in article
fifteen, chapter thirty-one of this code shall, by
resolution, in accordance with the provisions of
this article and article fifteen, chapter thirty-one
of this code, and upon direction of the governor,
issue revenue bonds of the economic development
authority in no more than two series to pay for all
or a portion of the cost of constructing, equipping,
improving or maintaining projects under this
section or to refund the bonds at the discretion of
the authority.
We agree with the Cities and Counties that W.Va. Code § 29-22-18a(d)
provides a mandatory duty on the part of the Development Authority to issue the revenue
bonds in accord with the specific terms of that code section. “It is well established that the
word 'shall,' in the absence of language in the statute showing a contrary intent on the part
of the Legislature, should be afforded a mandatory connotation.” Syllabus Point 1, Nelson
v. W.Va. Pub. Employees Ins. Bd., 171 W.Va. 445, 300 S.E.2d 86 (1982). We discern
nothing in W.Va. Code § 29-22-18a(d) which grants discretion to the Authority to refuse to
issue the bonds once the Governor has so directed.
(See footnote 14)
However, this Court is extremely reluctant to compel a public corporation and
government instrumentality of another branch of State government to incur debt.
(See footnote 15)
We are
also cognizant that the issuance of public bonds may rest upon factors other than their
legality such as conditions of the bond market. This Court can no more control market
conditions which govern the timing of the issuance of bonds than it can control the weather.
It is possible that subsequent to our decision herein, market conditions could become
unfavorable which would force a delay in the issuance of the bonds. In such an event, we
do not believe that the Authority should be constrained by an order of this Court from
responding to changing economic conditions. We note that the only reasons given by the
Authority for refusing to follow the Governor's directive to issue the bonds were the legal
challenges in the instant cases. We now have resolved all of these legal challenges.
Therefore, we are confident that, absent some currently unforeseen economic circumstances
which would compel a different response, the Development Authority will move with
dispatch to issue the bonds in the manner provided by W.Va. Code § 29-22-18(a)(1) and in
accord with the Governor's directive. For these reasons, we grant the writ of mandamus as
moulded in case number 31540, and we direct the West Virginia Economic Development
Authority to issue the revenue bonds in the manner provided in W.Va. Code § 29-22-18a(d)
(2003) if all nonlegal factors so permit. Once again, let us be perfectly clear. As a result of
this decision, there exists no constitutional, statutory, or other legal impediment to the
immediate issuance and sale of the subject revenue bonds.
In closing, having resolved the legal issues herein, this Court believes that a
few comments are in order. First, we wish to emphasize the very limited nature of our
review of the challenged legislation. Because the general powers of the Legislature are
almost plenary, this Court's sole concern in reviewing a legislative enactment is to determine
whether it offends any provisions of the State or Federal Constitutions. As noted above, in
considering the constitutionality of a legislative enactment, we exercise due restraint and will
find a statute unconstitutional only when the negation of legislative power appears to us
beyond a reasonable doubt. See Syllabus Point 1, State ex rel. Appalachian Power Co. v.
Gainer, supra. In the instant case, the negation of the Legislature's power to enact the
Racetrack Video Lottery Act, the Limited Video Act, and the State Excess Lottery Revenue
Fund statute does not appear to us beyond a reasonable doubt.
We further note that several
of the challenges to the subject legislation are based on public policy grounds.
However, “[c]ourts are not concerned with questions relating to legislative
policy.” Syllabus Point 1, in part, State ex rel. Appalachian Power Co.
v. Gainer,
supra. While there may be individual members of this Court who agree with
several of the concerns raised by the Coalition Petitioners in their challenges to the video
lottery, it simply is not the role of this Court to determine the wisdom or advisability of State-
sanctioned video lottery games. In regards to the State Excess Lottery Revenue Fund statute,
several individual members of this Court doubtless would have sought to promote economic
development by other means. Perhaps some of us question the economic utility of several
of the projects in the public interest and for a public purpose listed by the Legislature in
W.Va. Code § 29-22-18a(d)(11) and approved by the Grant Committee, but it is not our
function to base decisions on such personal concerns. Frankly, some of us might have done
things differently if we were legislators, but we are not. We simply cannot emphasize
strongly enough that our inquiry herein is strictly limited to the constitutionality of the subject
legislation and not a personal estimation of its advisability or effectiveness.
Finally, this Court believes that a major disadvantage of economic development
schemes such as the one devised in W.Va. Code § 29-22-18a, is that such schemes are
inherently subject to criticism and open to claims of favoritism, and it is that favoritism or
appearance of favoritism that inevitably taints it. Petitioners Lewis and Cooney leveled
several charges of favoritism against the Grant Committee and “top legislators.” For
example, the petitioners assert that a majority of counties did not receive economic
development grant money, including several disadvantaged counties, because these counties
did not have members on the Grant Committee or top legislators “steering” the money. The
disgruntled petitioners also allege that the seventeen counties which are due to receive over
$200 million of the grant money are home to either Grant Committee members or the twelve
top legislators. This latter charge is also cited in a recent local newspaper article.
(See footnote 16)
According to this article, every member of the Grant Committee brought home money for at
least one project in his or her county. In addition, the counties served by the Senate and
House Rules Committees - made up of the chairpersons of several powerful committees, such
as judiciary and finance, as well as the Senate President, Speaker of the House, and majority
and minority leaders - represent 56% of the State's population but received 78% of the
economic development grant funds. Such alleged appearances of favoritism are bound to
meet with public resistance and the accompanying court challenges which usually accompany
such resistance. However, whether true or not, these types of claims and charges are actually
political and policy questions and, at least as framed here, not legal questions. These are
issues which should not be addressed by a court but are more properly decided by the
Legislature or ultimately the people on election day.
The writ of mandamus sought by the Reverend Jim Lewis and John Cooney
in case number 31541 is denied.
The writ of mandamus sought by the Greenbrier County Coalition Against
Gambling Expansion and the Cabell County Coalition Against Gambling Expansion in case
number 31564 is denied.
The Clerk of this Court is directed to issue the mandate in this case forthwith.
No. 31540 - Writ granted as moulded.
No. 31541 - Writ denied.
No. 31564 - Writ denied.
The West Virginia economic development authority created and provided for in article fifteen, chapter thirty-one of this code shall, by resolution, in accordance with the provisions of this article and article fifteen, chapter thirty-one of this code, and upon direction of the governor, issue revenue bonds of the economic development authority in no more than two series to pay for all or a portion of the cost of constructing, equipping, improving or maintaining projects under this section or to refund the bonds at the discretion of the authority. Any revenue bonds issued on or after the first day of July, two thousand two, which are secured by state excess lottery revenue proceeds shall mature at a time or times not exceeding thirty years from their respective dates. The principal of, and the interest and redemption premium, if any, on, the bonds shall be payable solely from the special fund provided in this section for the payment.
be the governor, or his designated representative, the tax commissioner and seven members who shall be appointed by the governor, by and with the advice and consent of the Senate, and who shall be broadly representative of the geographic regions of the state. The board shall direct the exercise of all the powers given to the authority in this article. The governor shall also be the chief executive officer of the authority, and shall designate the treasurer and the secretary of the board.