West Virginia Lottery Director Alan Larrick said he’s optimistic that sports betting could be up and running at the state’s five casinos within 90 days after a favorable ruling from the U.S. Supreme Court overturning a federal law barring sports betting in most jurisdictions.
“In a perfect world, we could hopefully be up and running by late summer,” Larrick said after Wednesday’s Lottery Commission meeting.
Larrick said the Lottery is moving forward as if the high court has already given the green light for sports betting, and said the state’s five casinos are “all in” on offering sports betting, under a new law that went into effect on March 9.
Earlier, Larrick told commissioners he hopes justices will issue a decision on New Jersey’s challenge of a federal law barring sports betting in most states in April. The next date the court is scheduled to issue opinions is April 2.
“We’re really looking forward to working with our partner casinos,” Larrick said. “I think we’ve really gotten ahead of the curve. We’re out there first.”
West Virginia is one of five states so far to pass sports betting laws in anticipation of a favorable Supreme Court decision.
The only neighboring state to do so is Pennsylvania, but gaming industry experts have said that the state’s $10 million licensing fee and 36 percent tax on casino profits are exorbitantly high and will dissuade casinos there from opening sportsbooks.
By comparison, West Virginia has a $100,000 fee for a five-year sports betting license and a 10 percent tax rate.
Gov. Jim Justice allowed the bill (Senate Bill 415) to become law without his signature, in part to avoid potential ethical issues, since he stands to profit from sports betting at the casino at The Greenbrier.
Justice also threw a bit of a wrench into the proceedings, announcing that, if the court overturns the sports betting ban, he will ask the Legislature to revise the law in special session to “look at the advantages of partnering with the major league sports.”
“This approach will allow us to develop a relationship with all the major sports leagues so that it is beneficial to everyone,” Justice said.
That was after both the Senate and House of Delegates rejected overtures from Major League Baseball and the National Basketball Association to impose a 1 percent “integrity fee” on gross wagers — a tax off the top potentially amounting to tens of millions of dollars a year that would be paid to professional sports leagues.
Larrick said Wednesday that the Lottery would prefer that professional sports leagues “be partners, not adversaries.”
“We’re open to any type of discussion,” he said. “There may be something the leagues can provide in the way of marketing or something of that nature that would be to our benefit.
“Any type of tax, integrity fee, whatever you want to call it, we need to make sure it’s something that’s not prohibitive to our casinos and to the state of West Virginia,” he said. “It needs to be a reasonable figure that allows us to go forward.”
So far, no state has included a tax to be paid to professional sports leagues in any sports betting legislation, although Larrick noted that the New York general assembly has an amendment pending to pay an 0.25 percent integrity fee, capped at no more than 2 percent of net profits.
Larrick believes sports betting could be a boost for state casinos, similar to the legalization of table games in 2007 that allowed the state’s “racinos” — racetracks offering video lottery games — to become full-fledged casinos, years ahead of neighboring states.
The 90 days Larrick said would be necessary is largely because the state’s casinos would need to construct sportsbooks — lounges generally featuring multiple TV screens, electronic boards displaying upcoming games and betting odds, and betting windows.
Under the law, the casinos will also be able to offer sports betting via smartphone apps, although bettors would have to be in West Virginia when they place their wagers.
While sports betting will not be a major profit center in itself, Larrick said it has the potential to attract a younger, more affluent demographic to the casinos and to the state.
Also during the commission meeting:
n Overall Lottery revenues continued to decline in February, with gross revenue of $86.85 million down $2.86 million from February 2017. Fiscal year-to-date gross revenues of $706.46 million are also down $3.85 million from the same point in 2017.
The biggest decline is in racetrack video lottery, down $16.39 million year-to-date, at $327.03 million.
Meanwhile, revenue from traditional online and scratch off games are up $5.72 million year-to-date, at $116.19 million, benefiting from changes in Powerball and Mega Millions games that result in more frequent large jackpots.
Limited Video Lottery in bars, clubs, and fraternal organizations around the state is also up $9.36 million year-to-date, at $235.57 million, under a new law that increased the maximum number of machines permitted in bars and clubs from five to seven.
The state’s share of Lottery profits for February was $41.88 million, down $1.53 million from February 2017. Year-to-date state profits of $321.99 million are down $3.98 million from the same point in 2017.
n Commissioners gave state approval for the pending acquisition of Pinnacle Entertainment by Penn National Gaming.
While that will allow Penn National to acquire casinos in Colorado, Louisiana and Iowa, Penn National Treasurer and Vice President Justin Sebastiano said it will have no immediate impact on Penn National’s only West Virginia property, the Charles Town racetrack and casino.
Ultimately, however, he said it should provide more resources to upgrade Charles Town’s Hollywood Casino with “best in class assets” to compete with the nearby $1.4 billion MGM National Harbor casino and resort.
“It allows us to even more effectively compete with National Harbor,” Sebastiano told commissioners. “Not to mention, you won’t have to pay $8 for a beer like at National Harbor.”