April 3, 2003 – Senators were surprised, even bewildered, on Thursday when, during a committee hearing on the justice system, they were told that the fate of the territory's controversial video lottery terminals has been taken out of the courtroom and placed firmly in the Senate chambers.
Southland Gaming, owner of the VLT's, sued the V.I. government on Feb. 18 in Territorial Court, claiming breech of its 1998 contract with the V.I. Lottery to install the terminals in the territory once video lottery gaming became legal. Such a law took effect last Dec. 23, when the 24th Legislature overturned an earlier veto by Gov. Charles W. Turnbull of a bill legalizing VLT's in the St. Thomas-St. John district.
Turnbull, Licensing and Consumer Affairs Commissioner Andrew Rutnik and the V.I. Lottery executive director, Austin Andrews, were named as defendants in the Southland suit. On Feb. 21, 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.
An out-of-court settlement was reached on March 21, but its terms are being kept secret by both sides. Both parties also filed a motion on March 24 to dismiss the court case, which Attorney General Iver Stridiron said on Thursday Judge I've Swan has done. (See "Lawyer: VLT deal now out of court, still secret".)
Stridiron made the comment while testifying before the Public Safety, Judiciary, Homeland Security and Justice Committee on matters pertinent to his office.
Last week, 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.
Until Thursday, no further information had been released about the settlement. Lawyers for both sides have remained tight-lipped.
In response to questions from Sen. Raymond "Usie" Richards, Stridiron said the documents are still sealed. "I can say that no money changed hands," the attorney general said, "and the machines aren't working. The judge has dismissed the case. We hope the Legislature will take the definitive step."
Stridiron stressed: "No machines are in operation." According to information obtained in calls to the three St. Thomas establishments where VLT's had been installed, they are no longer in use. An employee at the Old Mill said the machines installed there "are no longer on the property." The machines are still in place but no longer in operation at Ferdie's Restaurant in Bluebeard's Castle Hotel and at Caribbean Saloon in Red Hook, according to observers.
Sen. Louis Hill took up the quest for information. " I'm confused," he told Stridiron. "Are the machines legal?" Stridiron reiterated that he couldn't fully disclose the settlement. "I don't want to disclose that at this juncture," he said. "The matter is closed until the Legislature acts."
A bill has been before the Legislature since January to repeal the law legalizing video lottery operations in the district. To date, it has not been scheduled for consideration by Senate President David Jones, although he held Committee of the Whole hearings on the general topic of video lottery gaming last month on St. Croix and St. Thomas.
Hill asked Stridiron, regarding the Legislature, "How do we fit in?"
Stridiron said the documents were closed "so as not to influence the Legislature one way or the other."
Hill persisted: "The law on the books says they are legal today." He continued, referring to the secret settlement, "Frankly, I find that kind of disturbing. I advocate openness in government."
Stridiron told Hill: "I wouldn't worry about what the lawyers outside did."
Sen. Emmett Hansen II was also perplexed. "We don't know what happened, and we are going to be asked to make a decision," he said. "I don't feel comfortable with this. I would like to know what the settlement is so I can make an educated decision."
Richards, the Senate minority leader, said later that since a settlement has been arrived at, "no harm can come to either party. It leaves it for the Legislature to act. They have dropped the ball in the lap of the Legislature." He said that up to $15 million which Southland's contract specifies the government could be obligated to pay if the contract is broken is "of no further significance because the settlement has been entered into."
Richards said if the video lottery law is not repealed, the lottery executive director still has the authority to act on behalf of the V.I. Lottery Commission and enter into a contractual agreement.
However, Richards said his main concern is that the repeal bill get a public hearing, something he has been pushing for since he came into office in January. "I'm not speculative about how the vote would go," Richards said. "I am concerned that Sen. Donastorg and myself should have the opportunity to cast a vote on public record."
Richards and Donastorg are the co-sponsors of the repeal legislation.
"I hope they allow the process to work," Richards said, referring to the Senate majority bloc. He noted that when he had tried on March 14 to get the Senate to move from Committee of the Whole into full session, where the bill could be acted upon, "Senator Jones said they intended to let the legal action take its course." Now, Richards said, "that legal action has completed its course, and we need to act on it as a legislative body."
The Senate is scheduled to meet in full session on April 15 and 16, Homeland Committee chair Lorraine Berry said Thursday. But she said she did not know if the bill repealing video lottery operations has been placed on the agenda. The agenda is made up in the Senate president's office, and Jones is off -island until next week, a staff member said.
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