MINOT — Back in April, Attorney General Drew Wrigley’s office filed a complaint against a gambling industry distributor, Western Distributing, and affiliated companies, alleging they used the Wall of Honor, a charity honoring veterans, to circumvent state charitable gaming laws.

The complaint comes at an inflection point for charitable gaming in North Dakota, with a river of revenues from the legalization of electronic pull-tab machines sparking a gold rush that has begun to blur the lines between nonprofit charities and for-profit businesses.

On Thursday, July 6, Wrigley’s office announced a settlement with Western and its affiliates that requires founder and principal partner David Wisdom and any immediate family members involved in the business to resign.

Western must also pay a $125,000 fine — the maximum allowable — and reimburse the state for $36,355.50 in attorney’s fees. Finally, the company agreed to a “deferred revocation of their gaming/distributors’ licenses.”

“If they fail to comply with the terms of the June 30, 2023, Agreement or commit any further violations of North Dakota’s gaming laws or rules for the succeeding three years, Western Distributing Company; Plains Gaming Distributing, Inc.; and Midwest Gaming Distributing, Inc.’s licenses will be revoked,” the statement from the attorney general’s office states.

“Western Distributing, Plains Gaming Distributing, and Midwest Gaming Distributing intentionally used Wall of Honor to circumvent the gaming site rent limits set in law,” Gaming Division Director Deb McDaniel said in a statement. “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.”

When Wrigley’s office initially filed its complaint, Western representatives and the director of the Wall of Honor charity were defiant.

The response from the Wall of Honor has been to claim that they have nothing to do with charitable gaming. “The Wall of Honor is not in charitable gaming,” Tammy Ibach, the executive director of the group, claimed in a letter to the editor.

Gerald Parker, the general manager of Western Distributing Company, one of the gaming interests named in Wrigley’s complaint, made a similar claim in a news release and video published on the company’s website.

“The facts of the Wall of Honor is that they are NOT involved in charitable gaming,” Parker said in his written statement.

Those claims stand in stark contrast with the settlement Western agreed to with Wrigley’s office. Previous reporting also indicated that the Wall of Honor has deep ties to Western.

One additional term of the settlement is that Western and its affiliated companies must “refrain from making any statements contrary to the terms and acknowledgments of this Agreement,” per the release from the attorney general’s office. “As with all other provisions in the Agreement, violations of this provision will result in a revocation of the Respondents’ gaming licenses,” the release states.

Yet before the attorney general’s office announced the settlement, Western Distributing preempted it with an email to their customers that acknowledged the terms of the settlement but described them in far less stark terms than the attorney general’s office used.

“Western Distributing companies acknowledges the following items listed in the settlement: Western Distributing founder and principal partner, Dave Wisdom, will retire from Western; Western will pay a fine plus attorney fees; Western will be on administrative rules probation; and all Western Distributing gaming licenses will remain in effect with NO suspension or revocation,” the email, provided to me by a recipient, reads.

The email, sent by Western general manager Joe Hoffert and chief financial officer Deb Stoltman, also acknowledged that Western Distributing’s coordination with the Wall of Honor charity was inappropriate.

“Regarding the Wall of Honor, we believed that Western was operating within the charitable gaming rules of ND when we had discussions about the Wall of Honor to encourage veteran’s organizations to consider charitable gaming as an opportunity to sustain their organization and eventually see a renewed spirit in their clubs,” the email states. “We now understand our interpretation of the rules was not correct, and in violation of the ND charitable gaming rules. We are proud to have assisted in the initial launch of the Wall of Honor and its role in recognizing the veterans and first responders who have served our state and nation.”

Contributed / Tammy Ibach

Reached for comment, Wrigley, apparently concerned that the message may have violated the terms of the settlement, said it may lead to additional sanctions.

“Whoever crafted that dissembling email erroneously thought they were being clever,” he told me in response to an inquiry about the email. “Instead, that serious misstep has their lawyers working hard to find a way to correct the record and avoid further consequences for their clients. Stay tuned.”

I called Western Distributing for comment, but a representative said owners Hoffert and Stoltman weren’t immediately available for comment.

Wall of Honor executive director Tammy Ibach told me her organization is “moving forward” after the settlement. “We’re glad to have this over,” she said, adding that her organization is “extremely proud of the work we’ve done.”

The Wall of Honor also issued a statement acknowledging that they had “discussions with several veteran organizations regarding the opportunity charitable gaming would provide their organizations to sustain their brand and keep membership alive” but characterized that as an effort to keep those groups viable.

It also stressed that the complaint filed by the AG’s office was not against the Wall of Honor, and that the Wall of Honor is not a charitable gaming organization.