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Emails Reveal W.Va. Lottery Approved, Then Backtracked on Elections Betting

Justice

CHARLESTON — The West Virginia Lottery approved elections betting markets by three different sports betting companies last week — even though elections betting is illegal — but quickly changed its mind according to emails released Monday.

Gov. Jim Justice announced April 8 that all approval for betting on U.S. elections had been pulled, calling it “ridiculous,” “ludicrous” and “humorous.”

The announcement came after FanDuel, which operates a sportsbook at the Justice-owned Greenbrier Resort in White Sulphur Springs and a sports betting app, announced the launch of an elections betting market in West Virginia April 7, only to pull the market a few hours later.

According to a Freedom of Information Act (FOIA) request submitted last Thursday for all emails dealing with elections betting, Lottery officials approved the new market April 7 for FanDuel and BetMGM (both offered by the Greenbrier Resort); and for DraftKings, which offers a sportsbook and app at Hollywood at Charles Town Races in Jefferson County.

Erich Zimny, vice president of racing and sports operations at Hollywood Casino, sent the Lottery a proposal for elections betting on April 6. Justice issued an executive order last month closing all casinos as the coronavirus wreaks havoc on the state and nation.

Sports betting apps tied to the state’s casinos can continue to operate, though with major sports leagues shut down, there is very little to bet on.

Sports betting companies, such as FanDuel and DraftKings, are turning to other events to wager on, such as the U.S. presidential election.

“…Both (Hollywood Casino) and DraftKings would like to explore the possibility of offering political props on major election markets,” Zimny wrote. “We certainly understand and respect that it’s been an area you all have tread lightly on thus far… I realize this would be new ground for us and Lottery but, as you could imagine, in the struggle for markets to bet into these days, we’re looking for what’s out there that could entice some interest.”

According to a proposal submitted by DraftKings, wagering on elections is available in Canada, the United Kingdom, Australia, and Spain, with Americans seeking offshore gambling sites to bet on U.S. elections. In that proposal, DraftKings wanted to include wagers on the U.S. presidential election, winners of state presidential primaries, winning political parties overall and in each state, races for U.S. Senate and House of Representatives, the over/under on congressional seats, the number of electoral college votes, and voter turnout.

According to projections, DraftKing forecasted as much as $1.1 million in wagers if betting was allowed by May 1. They estimated the handle could grow to $2.5 million in West Virginia and generate $150,000 in revenue for the state.

But betting on any election – state or national – in West Virginia is illegal, carrying with it a misdemeanor charge and a $50 fine.

David Bradley, deputy director of security for the West Virginia Lottery, sent Jake List, senior manager for sportsbook operations at DraftKings, an email the afternoon of April 7 – the day after DraftKings and Hollywood Casino sent their proposal.

“We have been discussing allowing wagers for political market maybe only restricting to federal nationwide markets, no state or local elections,” Bradley wrote.

In that email, Bradley asked DraftKings to limit their elections betting market in West Virginia to just national elections. In a follow-up email, List said that would not be a problem. Bradley sent a similar email around the same time to John Sheeran, director of risk and trading at FanDuel. Sheeran jumped at the chance to offer elections betting.

“Yep, always a fan of the politics betting,” Sheeran wrote. “Our current expertise would likely only stretch as far as the presidential election but would be willing to invest resources in it as a proof of concept.”

Later that afternoon, DraftKings, BetMGM, and FanDuel received emails from Bradley telling them that their elections betting markets could move forward.

“Approved as submitted,” Bradley wrote.

By that evening, FanDuel had a press release out announcing their elections betting market was live on the FanDuel app. At 7:21 p.m., FanDuel sent Bradley at the Lottery the press release and a link to the market.

“As the leading American sportsbook we’re excited to be the first to offer legal political betting, proving once again there truly are more ways to win on FanDuel,” said Mike Raffensperger CMO, FanDuel Group. “We’re proud to have partnered with the West Virginia Lottery to bring these markets into a legal, regulated sportsbook where bettors have appropriate protections and assurances.”

By 7:41 p.m. Bradley emailed representatives of DraftKings and BetMGM and told them to wait before moving forward with elections betting.

“Please hold up on this,” Bradley wrote. “We are re-considering.”

There were no further emails between FanDuel and the Lottery that evening, but an 8:13 p.m. email from List at DraftKings to Bradley said the FanDuel market was still live. According to Legal Sports Report, the market was available on the app for nearly two hours before some users started seeing the market disappear from the app around 8:30 p.m. the night of April 7. By 8:57 p.m., Sheeran with FanDuel emailed Bradley the statement they were sending to media.

“While the markets were approved, the West Virginia Lottery has asked FanDuel to refrain from offering the markets until they have time to fully work through the implications of this new market offering,” said Kevin Hennessy, a spokesperson for FanDuel.

In an email April 8 at 11:54 a.m. Sheeran asked Bradley what to do about any wagers placed in FanDuel elections betting market.

“Just wanted to get your guidance on the 2 wagers that were placed on the election,” Sheeran wrote. “Our inclination is to void them immediately and communicate to the customer in real time. Are you ok with that or do you want us to hold off on that process.”

Later that day, Lottery Director John Myers issued a statement accepting full responsibility for allowing the election betting marketplace to move forward.

“I thought it would be okay, but after review, it was clearly a mistake,” Myers. We just screwed up. I didn’t have the authority to do it, it should have never happened and I apologize to everyone.”

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