W.Va. Lawmakers Briefed on Sports Betting Issues

Recent staff turnover at lottery commission causes concern

Photo by Steven Allen Adams Douglas Buffington II, acting state Lottery director, answers questions from lawmakers during a legislative hearing Monday.

CHARLESTON — Sports betting is alive at two West Virginia casinos with more to follow, but lawmakers are concerned about recent staff turnover at the West Virginia Lottery Commission and attempts to circumvent the will of the Legislature.

The Joint Standing Committee on Finance met Monday morning during the second day of September legislative interim meetings at the State Capitol in Charleston.

Douglas Buffington II, acting state Lottery director, briefed lawmakers on the progress of sports betting. He replaces former Lottery Director Allen Larrick, who resigned Aug. 31, the day before Hollywood Casino in Charles Town became the first racetrack and casino in the state to go live with sports betting.

“I’m not aware why Mr. Larrick stepped down. Nobody has told me,” Buffington said. “I was asked if I would step in to help.”

Questioning turned to the status of Danielle Boyd, general counsel for the Lottery.

Boyd had been the media contact for sports betting questions. Buffington said Boyd was still an employee, but would not give any information on her status.

“She is currently an employee, she’s not available today, and we are looking at concerns,” Buffington said. “Nothing has been decided.”

“It seems like it’s another agency that’s in dysfunction,” Sen. Corey Palumbo, D-Kanawha, said. “Can someone let us know generally what’s going on there?”

Committee Co-Chairman Craig Blair, R-Berkeley, criticized Lottery and revenue officials for being unable to answer specific questions.

“So, the people who could answer the questions are not here,” Blair said. “That bothers me a little bit.”

Hollywood Casino was followed by the grand opening of the FanDuel Sportsbook at the Greenbrier Resort last week. Wheeling Island Hotel, Casino, Racetrack and Mardi Gras Casino near Charleston also have paid the $100,000 license fee. Only Mountaineer Casino in New Cumberland has not applied for a sports betting license.

Those wanting to place their sports bets will have to go to these locations in person for now, but soon the public will be able to place bets through a smartphone app as long as they’re within the state’s border.

In its first tax week, Hollywood Casino’s sports betting brought in $295,417.50 in taxable revenue. At a tax rate of 10 percent, the state received $29,541.75 in tax revenue, with 15 percent — $4,431.26 — going to administrative costs and 85 percent — $25,110.49 — going to the Lottery Fund.

Wheeling Island and Mardi Gras casinos expect to start sports betting operations on Sept. 27.

The Lottery Commission filed rules on Aug. 6 for a 30-day public comment window which closed Sept. 7. Sports betting is operating on emergency rules approved by the Lottery June 21 and filed July 9.

The submissions of the regular rules and the emergency rules both faced delays. The Legislature’s Joint Rule-Making Review Committee will review Lottery’s rules in December.

“I’ve been on the job for approximately two weeks, and dedicating as many resources as I can both at Lottery and the Department of Revenue to bring me up to speed on the comments that have been provided to get those questions answered,” Buffington said. “The casinos are able to move forward under the emergency rules that are in place right now.”

Since passing the legislation creating sports betting in March, officials with the major professional sports leagues have been working behind the scenes to implement integrity fees, a tax that would go back to the leagues. Lawmakers turned down all amendments and efforts to include integrity fees in the original bill.

Buffington said comments submitted focused on the need for using official data from the professional sports leagues, stressing that this is different than the integrity fee issue.

“This is different than an integrity fee,” Buffington said. “We’re talking about sharing data to identify possible bets that don’t seem proper.”

Delegate Paul Espinosa, R-Jefferson, questioned Buffington about efforts by the governor’s office to make changes or recommendations to change sports betting rules to benefit the major sports leagues.

“I just hope you’ll consider the fact that there is virtually no support in the Legislature for requiring these private entities to enter into these contractual arrangements,” Espinosa said. “I hope the commission will think long and hard before implementing any changes in the emergency rules that would require our casinos to enter into those arrangements.”

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