Settlement remains between the North Dakota Attorney General and three gambling equipment distributors

July 11, 2023
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The agreement was in jeopardy after one of the companies sent out an email to its customers that the Attorney General felt was inaccurate.

The North Dakota Attorney General’s recent settlement with three gambling equipment distributors will remain in place after one of the companies retracted an email it sent to customers.

The email by the Western Distributing Company threatened to scuttle the settlement because the Attorney General’s office was looking into whether it possibly violated the settlement.

North Dakota Attorney General Drew Wrigley told The Association Press that Western Distributing’s decision to retract the email in a subsequent message to customers “was wise of them.”

The Attorney General accused Western Distributing and affiliate companies Plains Gaming Distributing Inc. and Midwest Gaming Distributing Inc. of violating the state’s gambling laws and regulations arranging for excessive rent payments and trying to influence bars’ charitable gambling activities through the Wall of Honor veterans nonprofit. The Wall of Honor recognized veterans, emergency responders and active military members on indoor digital display boards in bars, restaurants and fraternal organizations.

The Attorney General alleged that the Western Distributing and its affiliates used the Wall of Honor as an enticement to get bars to use electronic pull tab machines provided by the three companies, and to coerce bars to switch charitable gambling organizations, as reported by The Bismarck Tribune.

The settlement includes a maximum $125,000 fine and acknowledgment of wrongdoing. It also requires the removal of Western Distributing and Plains Gaming President and shareholder Dave Wisdom and his immediate relatives from ownership and involvement in the companies.

What upset the Attorney General about Western Distributing’s email was how it characterized Wisdom’s removal from ownership as a retirement. Western Distributing later put out a second email to its customers which retracted the previous email and added, “We are grateful to have this matter behind us. We look forward to serving our valued customers while fully complying with the law.”

In recent years, North Dakota state lawmakers have looked into electronic pull tab, which function like slot machines and whose use has expanded greatly in the state since 2018. Electronic pull tabs generated almost $1.6bn in proceeds in fiscal year 2022, paying out $1.4bn in prizes and netting about $200m for charitable uses.

This spring, the North Dakota Legislature passed a bill to limit e-tabs while the legislature studies the state’s charitable gaming issues.

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