Recently, two identical defamation lawsuits filed by Grover Gaming against employees of a competing firm, Powerhouse Gaming Inc., have been allowed to proceed by a federal judge in Virginia. Grover Gaming, an electronic pull tabs provider licensed by the Virginia Department of Agriculture and Consumer Services’ Office of Charitable and Regulatory Programs, alleges that Powerhouse employees made false comments about Grover’s operation. The statements in question accuse Grover of conducting its business illegally, cheating players and charities, and being under investigation by the state of Virginia.
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U.S. District Chief Judge Michael F. Urbanski, presiding in the Western District of Virginia, stated that the allegations, when viewed in the light that’s most favorable to Grover, suggest that the challenged statement—that Grover is ‘under a serious state investigation’—is verifiable. Urbanski noted that the existence of an investigation may require significant exploration. “Either an investigation by the state exists, or it does not,” he said. Furthermore, Judge Urbanski remarked on the context of the allegedly defamatory message, stating that it (1) supports Grover’s argument that a reasonable recipient would perceive the statement as factual, and (2) reinforces the implication that Grover has participated in unlawful conduct related to charitable gaming.