West Virginia’s Sports Betting Wager Pays Off
WHEELING — The kickoff to sports betting at West Virginia casinos could happen with the start of football season this fall.
State Lottery Director Alan Larrick made that comment Monday after the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act — a law prohibiting sports betting in most states since 1992.
Meanwhile, he said, talks continue between West Virginia officials, the casinos, Major League Baseball and the National Basketball Association to give professional sports organization a percentage of the money that gamblers bet on their games.
The court ruled 6-3 to strike down the act. Nevada, Montana, Oregon and Delaware have had forms of sports wagering since before the law took effect.
The West Virginia Legislature this year passed a measure to allow the state’s five casinos to operate sports betting books if the Supreme Court overturned the law.
It is estimated as many an additional 32 states could enter the sports betting field within the next five years, and West Virginia wants to be the first to score, Larrick said.
“It’s not yet for sure, but in the best case scenario, we could have sports betting up and running by the time football season starts in late August,” he said. “We’re working now on the rules and regulations to make sure it’s being done in the proper way.
“I think we’ll be the first among our neighbors (to offer sports betting), at least for the first two to three years,” he said. “I’m starting to think it might be a shot in the arm for all our casinos.”
The sports organizations have been pushing the need for an integrity fee tax in West Virginia that would give them as much as $1 on every $100 bet on sports in the state. Last week, Gov. Jim Justice announced a deal had been reached.
“The discussions are on-going,” Larrick said. “I’ll let them (the sports organizations) make any comment about any deal. I will just say there have been discussions.
“There have been several issues discussed,” he said. “It was not just about the integrity fee, but about marketing. There was some significant progress made.”
The sports organizations promised Monday to continue to fight for the integrity fee, which they say will give them the resources to protect against unethical behavior as it pertains to their sport and sports betting.
“Today’s decision by the Supreme Court opens the door for states to pass laws legalizing sports betting,” said NBA Commissioner Adam Silver. “We remain in favor of a federal framework that would provide a uniform approach to sports gambling in states that choose to permit it, but we will remain active in ongoing discussions with state legislatures. Regardless of the particulars of any future sports betting law, the integrity of our game remains our highest priority.”
MLB released a statement acknowledging the court’s decision would have a profound effect on Major League Baseball.
“As each state considers whether to allow sports betting, we will continue to seek the proper protections for our sport, in partnership with other professional sports,” MLB said. “Our most important priority is protecting the integrity of our games. We will continue to support legislation that creates air-tight coordination and partnerships between the state, the casino operators and the governing bodies in sports toward that goal.”
Financial Projections for Sports Betting
The legislation passed by West Virginia lawmakers — and signed into law by Justice — permits sports betting operations at the Wheeling Island Casino and Resort and Mountaineer Casino-Racetrack-Resort in Chester. It also would allow sports betting at the Hollywood Casino in Charles Town, the Mardi Gras Casino and Resort near Charleston and at The Greenbrier in White Sulphur Springs, which is owned by the Justice family.
West Virginia’s casinos have seen declining revenues in recent years, according to Larrick. He hopes sports betting will bring more people into the casinos, and this will increase revenue for video lottery, table gambling and horse and dog racing events there.
The American Gaming Association estimates that Americans illegally wager about $150 billion on sports each year, and West Virginia officials are betting sports gambling can provide an economic boost to both casinos and the state.
The Eilers and Krejcik gaming research firm of Santa Ana, California, provided to the state a study proposing that 699 full-time jobs could come to local tracks within the next five years as a result of sports betting, with another 233 resulting elsewhere. The firm estimates a total of 931 additional full-time jobs in the state within a five-year period, and an economic impact of $229 million by the fifth year from sports betting.
Based on a proposed state tax rate of 10 percent on general gross revenues from sports betting, the firm also predicts an additional $13.4 million in annual tax revenue coming to the state in the first year of sports betting, with the amount rising to $28.7 million by year five.
The law also permits the creation of phone apps by the casinos for the purposes of sports betting. This would be available to those who already have player’s memberships previously established at the casinos. And while a person wouldn’t have to be at the track to place a bet, they would have to be within the state of West Virginia. The technology involved would disallow bets from outside the Mountain State’s borders.
State Leaders Celebrate
Justice praised Monday’s decision by the court.
“I think it’s great, because, to be perfectly honest, today we all know there’s a lot of illegal sports betting that is going on all over our country,” he said in a released statement. “For us now to be able to capture dollars that are significant and meaningful to our state, as well as other states, that’s what I think we ought to do. So I think it’s good news — great news.”
Justice believes there is value in the state’s partnering with the sports leagues.
“The integrity fee is going to be borne by the casinos, and they can afford that,” he said. “Our state is really having to pay nothing. And all of the sudden now you have a relationship with all the sports leagues that can just bring additional goodness to us….
“Why fight with people and push back when they have the opportunity to help us and help us grow the potential of sports betting?” he asked. “And not only that, who knows what could be forged out of a relationship with the major leagues.”
He isn’t certain whether he will call a special legislative session to add the integrity fee to sports betting law.
“I think there needs to be some additional discussion,” Justice said.
Delegate Shawn Fluharty, D-Ohio, has championed in the Legislature the issue of sports betting in West Virginia, and he was excited by the court’s ruling on Monday.
“My colleagues on both sides of the aisle eventually bought in, and now West Virginia is at the forefront of something — and not simply following others like we have in the past,” he said. “This is a great day for our state and in particular the Northern Panhandle”
Fluharty said the legislation “is final” and he does not believe there will be a special session for the integrity fee.
“While certain special interests want to take money from West Virginia … I do not believe there is any interest from this legislature take it up,” he said. “There is no deal in place with the casinos and the sports leagues. A closed, back-room meeting was held by the Governor’s Office last week. I filed a (Freedom of Information Act) request today to find out exactly what happened at the meeting. It’s time we have transparency in government, not business-as-usual with the good-ole’-boy network that has plagued our state.”
Delegate Pat McGeehan, R-Hancock, was among sponsors of the sports betting bill.
“The current law is fine the way it is,” he said. “If the major professional sporting leagues want a so-called integrity fee, they can build a stadium in West Virginia and locate here. Beyond that, they’re just looking for a hand-out. The law is fine as it is.”