The IOOB Lounge in Moncton has five illegal video lottery terminals in operation in the bar just across the parking lot from the headquarters of the Atlantic Lottery Corportation.

Owner Roger Prosser was recently handed a $500 fine by the province, but has his machines running again under a sign saying proceeds are for charity.

“The sooner the other bars stop crying about the little guy who couldn't get Atlantic Lotto machines, the better off the world would be,” he says. “It’s the people who have other bars are jealous.”“It’s the other bars who have Atlantic Lotto machines do the complaining to Atlantic Lotto and the liquor board," says Prosser. "When they go crying to the liquor board, the liquor board has to act on it. That’s what they do. They come down and shut the grey machines down.”

A recent CBC News investigation revealed that unsanctioned VLTs are being played in bars around New Brunswick. The machines are collecting an unknown amount of illegal gambling revenue - and are potentially diverting that revenue from legal, provincial VLT revenue, which helps pay for things like roads and health care.

All proceeds donated to the children’s hospital

Since being fined, Prosser has plugged the grey machines in his bar back in. This time around he had a sign made reading “All proceeds from these games donated to the children’s hospital” and it bears the IWK Children’s Hospital logo.

Roger Prosser

Roger Prosser has been running illegal VLTs in his IOOB Lounge "off and on" for about three months. (CBC)

“We thought if the profit from it was donated to a worthy cause they [the government]

would leave us alone but obviously they won’t,” said Prosser. “The machines go or I’ll get another fine.”

He’s had the machines running under the new sign for about a month, but says no money has been passed on to the IWK yet.

“Well you got your hydro, got your maintenance, your repairs, your cost of upgrading all the time, your new chips to change them over to the new bills,” he says. “Then you take care of IWK after.”

He added he hadn't paid the $500 fine yet and planned to use grey machine profit to do so.

VLT terminals near Atlantic Lottery Corp.

Five unlicensed VLTs are just a stone's throw from ALC headquarters in Moncton at the IOOB Bar. (Google Street View)

The Department of Finance stated in a Feb. 10 email it would only be speculation to state how much revenue may be going to illegal machines:

“It is very difficult to determine the extent of unauthorized gaming because by its very nature, it is underground activity,” said director of communications Brendan Langille.

NDP Leader Dominic Cardy says if the government were inspecting and enforcing laws in bars, there would be no question as to the scope of the problem.

“It should have been an on-going response from the second these licences are issued. There needs to be follow up and enforcement,” says Cardy.

If you have any tips about this, or any other story, please get in touch: NBINVESTIGATES@CBC.ca

Prosser is the first illegal VLT operator to tell CBC News he received anything more than a warning from the province. He says his machines have been running off and on for about three months and says he doesn’t think he’d make close to what an ALC machine nets in a year — about $63,000.

“I know we’re a long way from 63,000 dollars per machine. I sure know that.”

Another grey machine operator, Don Denholm of Richibucto, says the machines in his bar make him 10 times more money than his liquor licence does. He says he and several other operators are considering suing the province in a bid to keep the unregulated machines.

Liberal Leader Brian Gallant said he thinks any discussion on regulation is a good thing, but operators should play by the rules ahead of any changes.

“I’m sure that they’re looking at that now to judge if they have a case to make and if they do have one then they can try to make it, but in the meantime they should be respecting the law.”

CBC News has requested the number of fines handed out by Public Safety in the last year for illegal VLTs. There has been no response.