CHARLESTON, W.Va. — Week three of the 2015 legislative session was highlighted by the release of a study commissioned by the House and Senate Finance Committees that found that the state’s greyhound racing industry is almost entirely subsidized by the state.
“Even if the return were close to neutral, we suggest that it does not make sense to spend more than $29 million a year to make a little over $30 million a year, with so much of that money going to residents who live in other states,” the report by Spectrum Gaming Group concludes. “Surely, the state of West Virginia could put the casino supplements to better use for the benefit of West Virginia.”
The report was commissioned last fall, following hearings where greyhound breeders testified that the industry is struggling to survive, amid lagging attendance and wagering at the state’s two greyhound racetracks.
Those concerns were confirmed in the study, which cites a sharp downturn in attendance and wagering at the greyhound tracks in Wheeling and Nitro.
It notes that wagering has dropped 55 percent in 10 years, from $35 million in 2004 to $15.8 million in 2013.
As wagering has dropped, state subsidies — mainly from revenue from video lottery games at the track’s casinos — increased as a percentage of racing purses, going from 49 percent of purses in 1995 to more than 95 percent currently.
“To continue to operate under the current structure does not appear to be in the best interest of West Virginia taxpayers,” according to the New Jersey-based research and professional services group that specializes in the gaming industry.
Meanwhile, the greyhound racing industry faces dual challenges of an aging customer base – at Wheeling Island, 81 percent of patrons are age 50 or older – and a growing negative public perception toward racing, generated by humane groups such as Grey2K USA, the study notes.
The study indicates that 618 people are directly employed in full- and part-time positions in greyhound racing in the state: 156 racetrack employees; 66 self-employed breeders; 370 employees at tracks, including trainers and assistant trainers, and 16 Racing Commission staffers.
The loss of 618 jobs would have a negligible impact on the state economy, the report notes, particularly if the displaced track workers are retained by the host casinos in new positions.
The report could set up a debate this session over whether to allow the casinos to “decouple” racing – under current law, they must operate the racetracks in order to maintain their state casino licenses. It notes that Sam Burdette, president of the West Virginia Greyhound Owners and Breeders Association, is advocating a multi-million dollar buyout plan, modeled after legislation enacted in Iowa, while the National Greyhound Association plans to fight any decoupling efforts.
Senate Finance Chairman Mike Hall, R-Putnam, said he anticipates the Legislature will act on the report this session.
Also at the Capitol:
— The Senate postponed what was to be the first crack at legislation to repeal the state’s prevailing wage law, when the Government Organization Committee decided to delay consideration of the bill until Tuesday.
Potential repeal of the law, which dates back to the 1930s and sets roughly union-scale wages for experienced construction workers on publicly funded projects, drew a packed house to the committee room. That included many union members, who say the repeal would drive down wages and lead to less qualified workers on construction jobs.
Backers of the legislation believe it will lower costs for construction projects, allowing the state to pursue more school building and other construction projects.
“There’ll be more construction, because you actually save money in building,” Senate President Bill Cole, R-Mercer, said.
— The Senate passed 26-8 and sent to the House legislation to conduct a performance and efficiency audit of the state Division of Highways, in hopes of finding cost-savings that can be used for additional road construction and maintenance.
As drafted, the bill would take up to $500,000 out of the state Road Fund to pay for the audit, which drew objections from Sen. John Unger, D-Berkeley. However, talks are ongoing between House and Senate leaders to come up with an alternate way to pay for the audit.