Gov. Jim Justice stunned the West Virginia gaming industry Thursday, issuing a news release claiming that a tentative agreement has been reached to incorporate an “integrity fee” into the state’s new sports betting law.
“I don’t know how in the world we got to the point where the governor says there is a deal. There is no deal in place,” John Cavacini, president of the West Virginia Gaming and Racing Association, which represents the state’s racetrack casinos, said Thursday regarding the governor’s announcement.
Meanwhile, Delegate Shawn Fluharty, D-Ohio, an early and strong advocate for sports betting, said he is considering seeking an injunction against Justice to block any official action resulting from a closed-door meeting of stakeholders on Wednesday, in a possible violation of the state’s Open Meetings Act.
“I see his press release as an admission by the governor that a violation of the open meetings law took place yesterday,” Fluharty, a Wheeling lawyer, said Thursday. “I’m very much considering filing an action in Kanawha Circuit Court, shedding light on this.”
An article posted May 10 on the gaming industry’s “Sports Handle” website said of the closed-door meeting at Lottery headquarters, “nothing and a lot happened”:
“A lot, because first-hand accounts of this closed-door meeting paint a colorful picture between attendees that include state lawmakers, a lobbyist for the NBA and NFL who has ties to Governor Jim Justice [Larry Puccio]; an appearance by the NHL, possibly the first time the league has gotten involved on sports wagering publicly; representatives from West Virginia University and Marshall, plus casino representatives and a ‘citizen volunteer’ for West Virginia Governor Jim Justice [Bray Cary], who did not attend in person but spoke by speakerphone. There was also some reported shouting, ‘shuttle diplomacy,’ and an apparent conflict of interest in play.”
Cavacini said the day-long meeting ended with the casinos remaining opposed to adding an integrity fee to be paid to professional sports leagues, but with a conceptual agreement for casino operators to enter into private contracts with the sports leagues to provide them with game data necessary for sports betting.
The casinos would otherwise have to buy the data from third-party providers, he said.
“We’re trying to get the leagues some money, but we’re not going to pay the integrity fee,” Cavacini said, speaking for the industry.
However, Lottery Commission Director Alan Larrick said his impression of the meeting was that an integrity fee was on the table.
“The fee being discussed was one-quarter percent,” he said Thursday.
“There’s no agreement in place, but I think we’re getting dangerously close,” Larrick added. “I do think there’s an agreement in principal. Is there a final, written agreement? No.”
During the regular session of the West Virginia Legislature, lobbyists for professional sports leagues, particularly Major League Baseball and the National Basketball Association, lobbied for a fee equal to 1 percent of all sports betting wagers to be paid to sports leagues, to enhance their efforts to assure player integrity in the face of likely expansion of sports betting, if the U.S. Supreme Court overturns a federal law banning sports betting in most of the country.
Critics liken the fee to a shakedown, and note that the sports leagues’ profits would be more than double the state’s share of sports betting profits, under their proposal.
Both houses of the Legislature rejected proposals to add an integrity fee to the sports betting bill, which passed the House 77-22 and the Senate 24-10.
According to industry reports, the sports leagues have pushed for sports betting integrity fees in at least 11 other state legislatures this year, without success. West Virginia is the only state to pass sports betting legislation this year.
In March, Justice announced that he would let the bill become law without his signature, to avoid possible ethical issues as owner of The Greenbrier resort. But he said, if the Supreme Court overturns the ban, he would call legislators into special session to “look at the advantages of partnering with the major league sports.”
During a news conference last week, Justice reiterated his interest in adding an integrity fee to the sports betting legislation, stating, “They wanted a percent, we negotiated to a quarter of a percent, and if we can get them to sign on for that and everything and bring them under the umbrella, I think that’s very, very minimal cost to the casinos, and I think it would be a good thing.”
Fluharty and Cavacini raised issues Thursday of potential conflicts of interest Justice might have in attempting to placate professional sports leagues, given that The Greenbrier has hosted NFL and NBA training camps, as well as an annual PGA Tour golf tournament stop.
“It’s unbelievable,” Cavacini said. “We’re getting to the point where the governor is working and fighting for money for the New York Wall Street billionaires, and turning his back on four casino companies in West Virginia that provide $350 million a year of state revenue and 4,000 jobs to West Virginians.”
“It seems to me he’s more concerned about his private gain at The Greenbrier than in the public gain of having a sports betting law that benefits the state as a whole,” said Fluharty.
Responding to a statement by Justice saying he insisted that the integrity fee be paid by the casinos, and not from the state’s share of sports betting profits, Fluharty commented, “If the casinos are willing to pony up more money, why does it have to go to his billionaire friends, and not to the state of West Virginia?”
Fluharty also said that, if Justice brings the sports betting legislation back up in special session, he will propose an amendment to exclude The Greenbrier casino from participating in sports betting, to avoid any possible conflicts of interest for Justice.
“I think we’ve got to bring some integrity back to state government,” Fluharty said.
Since becoming governor in January 2017, Justice has failed to place The Greenbrier, among many other businesses and assets, into a blind trust, to avoid potential conflicts.
Cavacini said Justice participated in Wedneday’s closed-door meeting via teleconference call, essentially demanding that the participants reach an agreement to include professional sports leagues in the legislation.
“He told the group to reach an agreement, to reach a deal, and get major league sports included as part of this legislation,” Cavacini said.
Asked to comment, Justice spokesman Butch Antolini issued a statement: “As for the sports betting tentative agreement, the process is still in the very early stages and many details still need to be worked out. There is no other comment and no other information available at this time.”