April 15, 2003 – Video lottery terminals will remain legal on St. Thomas and St. John with the defeat of a bill to repeal legislation legalizing the machines Tuesday – Day 1 of the 25th Legislature's first full session, which continues Wednesday.
The repeal bill, sponsored by Sens. Raymond "Usie" Richards and Adlah "Foncie" Donastorg, lost on a 7-7 vote with one senator absent for the vote.
The action prevented what Sen. Celestino A. White Sr. called "giving the governor four bites of the apple." White alluded to the governor's three previous vetoes of legislation legalizing the gambling machines and Turnbull's hope of signing into law the bill repealing the VLTs.
Turnbull made an impassioned plea at a press conference Monday for the repeal of the legalizing legislation. "To do anything but approve the pending repeal legislation would be irresponsible," he said.
The VLT controversy has dominated local news this year, most recently when Attorney General Iver Stridiron refused to make public the terms of an out-of-court settlement of lawsuits filed by the government and Southland Gaming, owner of the lottery terminals. Last week, a Senate committee subpoenaed the information, and on Monday Stridiron handed it over. (See "Senators subpoena secret VLT settlement" and Turnbull: Repeal VLT's, delay tourism authority".)
There was much debate Tuesday as the senators puzzled over the meaning of the language in the highly publicized but until Monday secret agreement. Sen. Almando "Rocky" Liburd asked that the Senate legal counsel study the settlement and define whether it does or does not stipulate a $15 million penalty if the legislation legalizing VLT's should be repealed. "To me, it says nothing," he said.
The agreement does not address that issue. However, Robert E. Huckabee III, president of Southland Gaming, speaking later, said the $15 million would definitely stand.
The figure comes from the 1998 contract awarded to Southland by the V.I. Lottery — the contract that the government sought to void when it went to court. Under a section titled "Damages for Wrongful Termination," the contract states:
"Repeal of Legislation: In the event the legislation authorizing video lottery gaming is repealed, Contractor shall be entitled [to] compensation for the difference between its investment at that time prorated over the term of the contract on an annual basis and the total investment, and the average net weekly game revenue for the remaining term of the contract. Lottery shall obtain a surety bond in the amount of $15 million to ensure the faithful performance of this payment."
While legal counsel Yvonne Tharpes pored over the document, floor debate became heated. Senate President David Jones repeatedly asked for order, cautioning senators to remain in their seats if they wanted their time to speak.
Donastorg: Attorney general's actions convoluted
Donastorg took issue with Stridiron's actions on the agreement, calling them "convoluted." He said: "There is a social problem brewing we have to take notice of — we have two petitions on this issue. The governor could be liable if he doesn't respect the wishes of the community."
Sen. Emmett Hansen II took the administration to task. "This institution is being played by the governor," he said. "On the one hand, the contract is said to be valid, and on the other it isn't. We have to motion to subpoena. How do you negotiate on a document that's not legal?"
Hansen discounted comments by the developer of a proposed $500 million resort and casino at Robin Bay on St. Croix that the legalizing of video lottery operations on St. Thomas and St. John was scaring off potential investors in his project. "As of Jan. 29," Hansen said, "they had not even applied for a CZM permit."
Sen. Douglas Canton, who voted against the Senate override last December, was philosophical about the possible $15 million cost to the government for breaking the contract. "They can put that on the back burner, just like they do with everything else," he said. "For every dollar that is made, there will be another $2 or $3 in social costs. The machines will be placed anywhere and everywhere."
Sens. Lorraine Berry and Shawn-Michael Malone renounced the repeal. Berry, who voted for the override, has publically stated that she would not change her mind. She said the 1998 contract was "valid." Once the machines' legality is sustained, she said, the contract will be renegotiated, placing the machines in tourist areas. "I voted to increase government revenues," she said.
Malone said: "It's clear we're going to be looking for $15 million. My opposition to the repeal is a financial one. The government will be held liable if we repeal the VLTs.''
White: Settlement proves 1998 contract is valid
White heartily agreed and gave the senators a lesson in reading the English language. "What is the main word in this settlement?" he asked, then answered: "It is 'revised', the word 'revised.'" If the contract 1998 wasn't valid, he said, the government would not have asked to renegotiate its provisions if VLT's were not repealed.
Dowe agreed with White, with another consideration. Five years ago, a request for proposals for VLT installation and operation "was solicited by the government," he said. "It will be a bad signal to investors if we cannot honor agreements."
Dowe has sponsored a bill directing that 35 percent of revenues received by the V.I. Lottery from private contractors licensed to operate lottery games in the territory go into the public school Impress Funds. The bill has not yet reached the floor.
Sen. Louis Hill said the VLTs "are not a viable economic tool." "There's no investment, no major jobs and a lot of duplicity, just like the tourism authority," he said.
St. Croix Sens. Luther Renee and Ronald Russell were adamant in their support of repeal. Renee echoed Canton's caution. "The short-term goal won't outweigh the long-term cost" to society, he said. Russell said although he doesn't feel the machines would affect casino development on St. Croix, he believes the social cost would be too high to pay.
Critics of video lottery gaming operations elsewhere have said playing VLT's is highly addictive. And local critics have expressed concern about the machines' placement in locales frequented by local residents and open to minors, whereas the intent was to place them in areas of high tourist traffic.
Sen. Norman Jn Baptiste said he believes the machines would bring "back door casinos" to St. Thomas, where "most residents voted against gaming" years ago.
Jones, long an outspoken advocate of VLTs, stuck to his position. "This year we are facing a budget shortfall approaching $100 million," he said. "I don't believe in gambling, but I'm not going to use my personal morality in a democracy. This isn't a theocracy."
And, he added, "As far as I've seen, it's a valid contract."
Jones: Repeal would have been unconstitutional
Jones said repealing the legalization of VLTs would be ''unconstitutional, because the U.S. Constitution and the Revised Organic Act prohibit any legislative body from passing laws that will nullify existing contracts."
Jones' remarks would certainly have gotten the attention of Stridiron on that issue, because Stridiron placed the issue directly in the Senate's lap when he said he wouldn't reveal what was in the settlement because he wanted the Senate t
o make a decision regarding repeal without being influenced by the terms of the settlement. However, he was not present at Tuesday's session.
Jones cut off Tharpes' detailed legal opinion at the end of the morning session, abruptly calling for vote on the bill without benefit of the legal counsel's conclusions.
Voting for the repeal were Sens. Baptiste, Canton, Donastorg, Hill, Renee, Richards and Russell. Voting against repeal were Sens. Berry, Dowe, Hansen, Jones, Liburd, Malone and White. Sen. Roosevelt David was absent for the vote.
David had said earlier that "Anyone who knows me, knows I don't approve of gambling, morally or socially." But he also said he was not convinced that VLTs would "retard" St. Croix's development.
Re-entering the Senate chambers after the vote, David was asked by a reporter about his absence. "Oh, sometimes you just miss a vote," he said. Pressed as to how he would have voted, David said he didn't know. "I would have crossed that bridge when I came to it," he said.
David also missed last December's vote on the override of the governor's veto of the VLT bill. On that measure, in the last session of the 24th Legislature, Sens. Berry, Donald "Ducks" Cole, Donastorg, Dowe, Alicia "Chucky" Hansen, Emmett Hansen, Jones, Liburd, Norma Pickard-Samuel and White voted for the override. Sens. Adelbert Bryan, Canton and Vargrave Richards voted against it. David was absent for the vote and Baptiste was absent for the session.
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