Track Prepares For Competition

WHEELING – From upgrading the slot machines to remodeling the restaurants and ventilation systems, officials at Wheeling Island Hotel-Casino-Racetrack spent about $15 million in facility improvements during the past two years.

Jim Simms, president and general manager, said the work is a direct response to the increasing competition the facility is facing, which got even stiffer this week with the opening of the $400 million Hollywood Casino Columbus on the west side of Ohio’s capital city.

“People are coming here to game, so we want to give them the best gaming experience possible,” said Simms. “We have reinvested in the property to compete as best we can.

“We are confident we have made very good investment decisions. We are going to be the best we can be,” he added, noting hotel upgrades are also in the works.

Simms admits, however, this may not be enough. So when the West Virginia Legislature convenes in January, Simms hopes members will consider reducing the rate of taxes the state’s four casinos pay for table gambling.

“We would definitely be interested in revisiting our state tax rates. Less profit means less money for us to spend on attracting customers,” he said. “This is a much bigger issue for us now than it was because of the increased competition.”

Much of the impetus for legalizing table gambling – live poker, craps, roulette, blackjack and other games involving dealers – in West Virginia in 2007 centered around the projected loss of revenue when Pennsylvania plugged in its slot machines. Mountain State leaders eventually agreed to allow table gambling, but decided to charge each of the state’s four racetracks a $2.5 million annual fee and apply a 35 percent tax on the activity.

Other West Virginia tracks which all now offer table gambling include Mountaineer Casino Racetrack & Resort in Chester, the Mardi Gras West Virginia Casino & Hotel (formerly Tri-State Racetrack) near Charleston, and the Hollywood Casino at Charles Town Races in Charles Town. Nearby Pennsylvania casinos include The Meadows Racetrack and Casino near Washington and The Rivers Casino in downtown Pittsburgh.

Since West Virginia adopted table gambling at these tax levels, both Ohio and Pennsylvania have introduced slot machines and table gambling. By comparison, Pennsylvania taxes its table games at no more than 16 percent, while Ohio charges 33 percent.

For slot machines, Pennsylvania taxes at a 55 percent rate, while Ohio levies the same 33 percent it does for tables. West Virginia charges about a 42 percent tax for slot machines, though Simms said the “effective tax rates” for Wheeling Island are about 57 percent for slots because of purse funds, breeders funds and local supplements.

Simms said he does not have a specific tax rate he would like applied to West Virginia tables and slots, but said it is something he and other gambling industry leaders will bring to the attention of legislators next year.

Also, Simms said before Pennsylvania got slots and table games, about 70 percent of the Wheeling Island business came from the Keystone State. The Wheeling Island facility is now getting about 60 percent of its customers from Ohio, 30 percent from Pennsylvania and 10 percent from West Virginia and other states.

“We were able to tap into that (Ohio) market, particularly in Columbus, to compensate for some of the Pennsylvania loss,” Simms said. “Now, we have a brand new casino in Columbus we have to compete against.”

Regardless of the tax and competition issues, Simms said the 680 or so employees at the Wheeling track who manage the 1,650 slot machines, 28 table games, eight poker tables, the greyhound track, and the restaurants and bars are “as tough as the Pittsburgh Steelers.”

“The commitment and resilience of our employees is amazing. I am so proud of them,” he said.

Those employees will no longer have to move slot machines and tables up from the ground floor when the Ohio River reaches flood stage either, as the track is not using that floor anymore. The ground floor now contains employee lockers and a storage area.

Simms said the track no longer has the business volume to require using the ground floor.

Simms also said the track is encouraged by the local developments of seeing Wheeling officials moving to demolish dilapidated structures to make the city more appealing to tourists.

“I feel much better about the local situation than I did two years ago,” he said. “The Wheeling leaders are working to make this a true destination city.”