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Editorial: More states are considering online gambling

From The Herald Dispatch of Huntington:

West Virginia got into the gambling business 30 years ago, and for much of that time, the Mountain State stayed ahead of the game.

It began in 1986 with instant lottery tickets and a prize of $5,000, and the state netted about $20 million that first year. Those revenues grew steadily of the next two decades, and casinos and race tracks in the panhandles attracted visitors from other states, where gambling was more limited.

But it soon became clear that maintaining that revenue stream meant staying “competitive.”

After bouncing back to almost pre-recession levels in 2012, revenues have declined each of the last four years, largely due to competition. Neighboring states, particularly Ohio and Maryland, have added new casinos and gaming options, and the customers West Virginia once got from those states come less often if at all.

But now Mountain State gaming venues and the state lotteries face a new, less visible but even more powerful competitor — the internet.

Online gambling is changing the face of gaming around the world. In Europe, some estimate that online games now have almost 20 percent of the gambling market. In the United States, online games already have cut into revenues for almost every gaming state, especially among young adults who seem to prefer gambling by computer or smart phone to traveling to casinos and race tracks.

A couple of big gambling states, New Jersey and Nevada, have decided “if you can’t beat ’em, join ’em.” In those states, in-state residents can go to websites run by casinos in the state and gamble, the Stateline News Service reports. Unlike other “off-shore” online gambling, which states cannot tax, this system allows New Jersey and Nevada to get a little piece of that state-sanctioned online action.

The news from New Jersey is encouraging. Officials have found the new revenue from online games has helped offset the losses at casinos.

Not surprisingly, several other states are considering actions to allow similar online gaming in their states. In West Virginia, a House bill to make existing gaming sites eligible for an online gaming license ended the session still in committee.

Could online gaming help West Virginia hold onto its gaming revenue a little longer? Almost certainly. But can it ensure a stable revenue stream for the future? That seems unlikely. The competition will no longer just be casinos in neighboring states, but gambling options around the world.

Over the years, gambling revenues have done a lot of good for West Virginia. Officials estimate they have generated more than $9 billion for programs such school improvements and scholarships, senior services and tourism promotion. But state leaders need to recognize those revenues will likely continue to decline, and the state will need other resources to support those programs.

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