On July 6, North Dakota Attorney General Drew Wrigley announced a settlement of an administrative complaint, accusing Western Distributing Company and affiliate companies Plains Gaming Distributing Inc. and Midwest Gaming Distributing Inc. of violating the state’s gambling laws and regulations by facilitating excessive rent payments and attempting to influence bars’ charitable gambling activities through the Wall of Honor veterans nonprofit.

The crux of the settlement agreement lies in its articulation of the allegations against the respondents and the stipulated terms of resolution. Despite disputing certain allegations, the respondents acknowledged that their representatives committed conduct violating North Dakota gaming laws. The settlement agreement, subsequently, delineated multiple crucial elements:

1. David L. Wisdom and his immediate family were to be removed from ownership and involvement in the respondents’ operations, indicating a significant shakeup in the companies’ organizational structure.
2. The respondents were ordered to pay a considerable fine of $125,000, in addition to attorney fees and costs, highlighting the financial repercussions of gaming law violations.
3. The agreement imposed a “deferred revocation” of the respondents’ licenses, a provision emphasizing the consequences of repeated misconduct over a three-year probationary period.

Along with the settlement, Wrigley issued the following statement: “These gaming violations undermine the integrity of charitable gaming in North Dakota. Those responsible for these improper actions violated the public trust and the trust of the charities that relied on them. The last year has brought a new day in gaming enforcement, and the public can be assured that law enforcement and the outstanding professionals in the Attorney General’s Gaming Division are working hard to protect the integrity of the limited charitable gaming that is permitted under North Dakota law.”

Gaming Division Director Deb McDaniel also issued a statement: “Western Distributing, Plains Gaming Distributing, and Midwest Gaming Distributing intentionally used Wall of Honor to circumvent the gaming site rent limits set in law. The Gaming Division Investigators & Auditors spent countless hours across more than a year conducting audits, interviews, and investigative research to document this important case, which has now been resolved with an acknowledgment of wrongdoing by Western Distributing, Plains Gaming Distributing, and Midwest Gaming Distributing.”

Why It Matters

The enforcement action and the subsequent settlement illustrate how the state’s regulatory authorities are holding gaming organizations accountable for their actions, ensuring they operate within the bounds of the law. The enforcement action and settlement reinforce the importance of abiding by gaming laws and regulations to avoid severe penalties, including hefty fines and potential revocation of licenses. This case serves as a stark reminder to all stakeholders of the importance of lawful conduct and the severe consequences of falling foul of the rules.

Troutman Pepper State Attorneys General Team

	Ashley Taylor – Co-leader and Firm Vice Chair Ashley is a partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and co-leader of the State Attorneys General practice. He focuses primarily on federal and state government regulatory and enforcement matters involving state attorneys general, the Consumer Financial Protection Bureau (CFPB), and the Federal Trade Commission (FTC). Drawing upon his experience as a deputy attorney general, Ashley has developed an extensive consumer practice with regard to the consumer financial services industry.
	Clay Friedman – Co-leader Clay is a partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and co-leader of the State Attorneys General practice. Informed by nearly a decade in a state attorneys general office, and more than 25 years in private practice, Clay spends much of his time representing clients in singular or multistate regulatory actions. Clay has repeatedly led teams before all 50 state attorneys general and also handles matters with the Federal Trade Commission, the Consumer Financial Protection Bureau, and other local, state and federal agencies.
	Judy Jagdmann Judy is a partner in the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) practice, based in the Richmond office. She brings experience serving as chair and commissioner of the Virginia State Corporate Commission (VSCC) from 2006 through 2022, which includes regulating the utilities, insurance, banking, and securities industries. She also served as Virginia’s attorney general from 2005-2006.
	Stephen Piepgrass Stephen represents clients interacting with, and being investigated by, state attorneys general and other enforcement bodies, including the CFPB and FTC, as well as clients involved with litigation, particularly in heavily regulated industries.
	Avi Schick A former deputy attorney general of New York, Avi applies his experience in bet-the-company matters, representing clients in criminal and civil investigations and enforcement actions before state and federal regulators, prosecutors and enforcement agencies.
	Michael Yaghi Michael handles high-profile state attorneys general, FTC, and CFPB investigations by advising clients through these complex government inquiries. He assists clients through the entire life cycle of investigations, from regulatory enforcement through formal litigation.
	Ketan Bhirud As a former government official at the state and federal level, Ketan leverages extensive experience in the public and private sectors to skillfully represent client interests.
	Tim Bado Tim is an attorney in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, with a primary focus on financial services litigation.
	Chris Carlson Chris represents clients in regulatory, civil and criminal investigations and litigation. In his practice, Chris regularly employs his prior regulatory experience to benefit clients who are interacting with and being investigated by state attorneys general.
	Natalia Jacobo Natalia is an associate in the firm’s business litigation practice. She recently received her J.D from the University of California, Davis School of Law.
	Namrata Kang Namrata is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. Her work includes advising clients in regulatory investigations and compliance matters, in addition to representing clients in civil litigation matters.
	Michael Lafleur Michael is an associate in the firm’s Regulatory Investigations, Strategy, and Enforcement Practice Group. Based out of the firm’s Boston office, Mike has deep experience in litigation, investigations, and other regulatory matters involving state-level regulators and state attorneys general.
	Susan Nikdel Susan is an associate in the firm’s Consumer Financial Services Practice Group, and focuses her practice on consumer financial services matters. She has defended several of the nation’s largest and most influential financial institutions in individual and class action litigation involving the Telephone Consumer Protection Act (TCPA), Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), and other consumer privacy statutes. Susan also represents banks, fintechs, and financial services companies in connection with regulatory examinations and investigations brought by the CFPB, state attorneys general, and the California Department of Financial Protection and Innovation.
	John Sample John represents clients in a wide variety of general and complex litigation matters, shareholder disputes, products liability, and privacy claims.
	Whitney Shephard Whitney is an attorney in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. She represents clients facing state and federal regulatory investigations and enforcement actions, as well as related civil litigation.
	Trey Smith Trey is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement practice. His experience includes serving as a summer associate at the firm in 2021.
	Daniel Waltz An experienced litigator, Daniel advises and represents regional, national and international companies, financial institutions and insurers in all facets of business, complex commercial and insurance coverage litigation. He is committed to working with his clients to find creative solutions to meet their needs.
	Stephanie Kozol Stephanie is Troutman Pepper’s senior government relations manager in the state attorneys general department.