Wood County is home to about 89,000 people and more than 130 businesses with limited video lottery licenses that have started in the past four years. One of those businesses is River City Perk BigTime Fun Cafe and Coffee, which had revenues in February of more than $99,000 after awarding prizes to players but before paying the state its share.

That's more than one dollar for every resident of the county and enough money to make River City Perk the number one limited video lottery retailer in the state last month.

Modesitt isn't impressed. In fact, seeing Wood County become a veritable village of mini-gambling parlors worries Modesitt, the current Wood County Commission president and a former policeman and state legislator. He's afraid the county and its residents will become addicted to the promise of quick money, just as he believes the state already has become.

"The state is the biggest addict in this whole thing," said Modesitt.

Limited video lottery was approved four years ago by lawmakers at the urging of then-Gov. Bob Wise, who wanted to legalize video lottery to accomplish three goals: reduce the number of machines to 9,000 statewide, restrict where they were located and regulate and tax them so the state could reap some benefit from the behavior.

Modesitt said the state has failed to accomplish any of those goals. Instead, he said, it created "a whole new monster."

"If they really wanted to control these machines at first it would have been very easy. They knew where the machines were, so the state could have just gone in and unplugged them or said, 'We're going to tax them,'" said Modesitt, who served as a Republican in the House of Delegates from 1998 to 2000. "It would have been very simple to tax those machines, but they took it to the extreme and made mainstream businesses out of them."

As the West Virginia Senate this week debates whether to allow table games at the four racetracks in the state, some people, such as Modesitt, are looking at what happened to the state during the last major expansion of gambling when limited video lottery was legalized and wondering whether the state hit the jackpot or is slowly losing its shirt.

"It just seems like a slippery slope we are sliding on," Modesitt said. "West Virginia is addicted to gambling right now. I guess if they approved table games and used money for that to get rid of (limited video lottery machines) I'd support it. But I don't think that would happen."

Games People Play

Wise initially pushed for the legalization of so called illegal "gray machines" during his campaign for governor. He said the machines were a blight on communities, popping up in convenience stores, gas stations, even grocery stores, like unwanted party crashers with their blinking lights, attention-grabbing noises and promises of fun and quick money.

Wise and others were offended, especially because the machines were popping up in areas where children were.

"When machines started to appear in grocery stores, and kids saw bright flashing lights, it became very important to try to control these things," said Libby White, director of marketing for the West Virginia Lottery Commission.

State police and officials with both the state's Alcohol Beverage Control Administration and the state Lottery Commission estimated there were more than 20,000 machines in the state.

"I think there were more because I know of a couple of places with more than 100 machines that weren't included in the list," White said.

The act limited the number of machines in the state to 9,000 and prohibited any one person from owning more than 675 machines. Only bars, fraternal organizations and adult clubs with certain liquor and beer licenses could own the machines, which cost between $15,000 and $20,000 each. And to control it even more, no bar could have more than five machines. No fraternal orders could have more than 10.

"I think the bill has done a fantastic job of accomplishing what the governor wanted -- which is to reduce the number of machines and primarily to get the machines away from kids," said Alex Macia, a Charleston attorney who was Wise's chief counsel and helped craft the legislation with other top administration officials, including Mike Garrison and Dale Steager. "They were in the corner grocery store and Shop-a-Minutes. You'd have to walk through 10 or 12 just to get inside. Now there are a lot fewer machines, and they are nowhere within the view of minors."

White agreed with Macia, saying since the Limited Video Lottery Act went into effect the number of illegal machines in inappropriate areas has declined to almost nothing.

"The bill set out to reduce and restrict access to the machines and I think it did that," she said.

Plus, the legislation brings tens of millions of dollars into the state, Macia said, and that money has been used to fund everything from the PROMISE Scholarship program to tourism and senior citizen programs.

"It also wiped out an illegal industry that flourished for so long," Macia said. "(The Act) legitimized the business."

Just a Business

And what a business it has become.

In fiscal year 2002 -- the first year for limited video lottery -- the machines generated $45 million in revenues for the Lottery Commission. By fiscal year 2004, the machines generated nearly $242 million.

The legalization of the machines helped make West Virginia's lottery one of the fastest growing on the continent, according to the North American State and Provincial Lotteries (NASPL), which represents lotteries in 40 states, Washington, D.C., and in several Canadian provinces.

Between 2003 and 2004, West Virginia's lottery sales grew by 20.5 percent, according to NASPL. Only South Carolina, which recently started a lottery, had faster growth -- 31.2 percent -- during that one year.

The state also had the fourth highest sales per capita among all of the lottery states in 2004, with each person spending an average of $720.16.

But not all of that revenue is just from limited video lottery. Ever since the lottery began in 1986, it has grown like gangbusters, thanks to scratch-off tickets and instant-win games such as Powerball and Keno. During its first fiscal year in 1987, when the state just offered a handful of games, the lottery's total revenues exceeded $66 million, according to the Lottery Commission. By fiscal year 1995, the annual revenues had grown to $181 million. A decade later, in fiscal year 2004, annual revenues exceeded $1.3 billion.

And while the lottery counts on winners to keep playing, the biggest winner through all of this has been the state.

Lottery Commission attorney John Melton said this year the state will receive about 42 percent of limited video lottery machines average daily revenues after prizes. Next year, the state's share may go up to 46 percent.

In 1987, the lottery contributed $28 million to the state's general fund. The state share grew to $55 million by 1995, with the money going into a special fund instead of the general revenue fund. Last year, the lottery contributed $512 million to the state.

Macia and White said the money has gone to good causes, including educational programs such as the PROMISE Scholarship, as well as the Economic Development Grant program. In addition, lottery revenues went to tourism and senior citizen programs.

Weirton Mayor William Miller has mixed feelings about gambling, the lottery and limited video lottery. During the past four years, he's seen bars pop up about every 150 feet along his city's Main Street in everything from a closed down Dairy Queen to an old coffee shop.

For a while, their expansion was pretty much unregulated. Wherever people looked, a new lounge was opening, and on that lounge door was the West Virginia lottery sticker promising "Good Things Happen When You Play." It was the calling card needed to let people know: lottery machines just inside this door.

But instead of serving spirits and beer, these bars sling slots and betting.

Miller said he sees the pros and cons of the businesses. On one hand, gambling has brought a lot of money to the state and to his struggling Northern Panhandle community. On the other hand, if nearby states expand their gambling options, he's afraid West Virginia will find itself busted and broken.

"Gambling equals, what, one-third of our budget? We're putting one-third of our eggs in the same basket," he said. "If gambling goes south, how will we replace it?"

Modesitt said he is shocked by the amount of money that passes through limited video lottery machines. He said every three months the Wood County Commission requests revenue information from the Lottery Commission.

He wants to see how much money is spent on limited gambling -- and where it is spent.

"We found that $2.5 million of new money is funneled into machines in Wood County every month -- $2.5 million. That's staggering," Modesitt said. "The question is where is that money coming from? Are people not making car payments? Not making house payments? Did they stop buying groceries or medicine? Where is that money coming from?"

Trying to Make a Change

Miller and Modesitt said their communities have tried to address the growing presence of limited video lottery. Wood County passed a county ordinance regulating where the gaming rooms can open and restricting any new businesses from opening near churches, schools and some other businesses in the county.

Weirton also passed ordinances to try to control the location of new limited video lottery businesses.

"It was a choice by council to come on board so there weren't as many. But by then we already had 120 of them in Weirton," Miller said. "The horse was already out of the barn."

That's evident to anyone who drives through the Northern Panhandle. Weirton sits in both Hancock and Brooke counties. And those two counties alone have more than have 15 percent of the licenses, and their limited video lottery businesses reported more than 12 percent of the total revenues to the Lottery Commission in February.

One county south -- Ohio County -- has 111 retailers with five to 10 machines each. Their machines made $1.6 million in February after paying out prizes to winners but before giving the state its share, according to the Lottery Commission.

Miller said he understands the frustration local residents experience when they see these businesses open. He also knows gambling is part of the state's economic present and future -- whether it's at local taverns with a handful of machines or at the four racetracks where gaming is a multi-million-dollar venture.

Getting rid of gambling, he said, would leave gaping holes in everyone's budgets that could not be easily filled.

But Modesitt prefers to believe the state has other options.

"There's got to be a better way for the economy of West Virginia to grow than this," he said. "We aren't Las Vegas. We're West Virginia. Our logo shouldn't be 'Whatever Happens in West Virginia stays in West Virginia.' That's not us."

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