Sports wagering revenues expected to begin this fall in West Virginia


For the West Virginia Press Association

CHARLESTON, W.Va. — While many sports fans anticipate the beginning of football season for an opportunity to cheer their favorite teams, tailgating and other social aspects, there is another segment looking forward to the sights and sounds of gridiron action.

Casinos in West Virginia expect to begin accepting wagering on professional and collegiate contests this season, an action that could potentially bring millions of dollars in revenue to the state.

An update was given on SB 415, the implementation of sports wagering by the West Virginia Lottery, before the Joint Standing Committee on Finance at the State Capitol on Monday, the second of a three-day legislative interim session

The bill passed during the 2018 regular session and Gov. Jim Justice signed it into law March 9.

But West Virginia still needed the U.S. Supreme Court to strike down a 1992 federal law that banned additional states from implementing sports wagering, which it did by a 6-3 decision on May 14.

Work has been in place for the past few months to secure the infrastructure needed to begin accepting sports wagers in West Virginia’s casinos and on mobile apps, said Danielle Boyd, managing general counsel of the West Virginia Lottery.

The Lottery Commission approved emergency rules on June 21.

Boyd conceded that the goal is “ambitious, but realistic” in terms of  being ready to accept wagers this football season, as casinos are building “sports wagering lounges” at their properties, while also building digital platforms on mobile applications.

Boyd also shared with the committee her experience in working with New Jersey officials who have already implemented sports wagering, describing the relationship as greatly beneficial to West Virginia.

Sports wagering apps have the technology to determine the geo-location of its user, Boyd explained, to ensure compliance with state and federal laws. Users of the new app must be located within West Virginia’s borders at the time of their wager, she said. She used a brief video provided by New Jersey officials as an example.

Boyd answered concerns about security against cyber-attacks and possible compromising of users’ bank information.

“There is every day monitoring of all transactions,” she told the committee. “There are multiple protections in place. The technology has been working very well in other states, protecting customers.”

In the current rules, there is no provision for integrity fees paid to sports leagues, Boyd said.

Alan Larrick, director of the West Virginia Lottery, described discussions between the casinos and sports leagues regarding integrity fees, “ongoing.”

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Dave Hardy, cabinet secretary of the Department of Revenue, and Mark Muchow, deputy secretary of the Department of Revenue, gave a brief FY 2018 budget update before the committee.

Hardy said in this final week of the fiscal year, he anticipates finishing with a surplus, saying, “The numbers since October 1 (2017) have been consistently better.”

He also said because of the steady positive numbers, it appears to be “more than a brief spurt.”

Muchow also shared with the committee as much as $50 million in revenue may be lost in the inability to capture online sales taxes currently, “regarding companies that have no physical presence in the state of West Virginia.”

Those taxes may soon be available for collection, however.

“There was a Supreme Court decision this past week. South Dakota essentially passed a law saying that (a company) must collect sales taxes unless their total contact with the state of South Dakota is less than $100,000 in volume or less than 200 customers,” Muchow explained. “Wayfair challenged that, because (the company) doesn’t have a physical presence in the state of South Dakota. But the U.S. Supreme Court decided South Dakota has the right to enforce that collection, because having a physical presence is no longer conducive to the reality of how we now conduct business.”

Muchow said he thinks other states may gain from the decision, depending on if the U.S. Congress gets involved.

“They may open the rules of the game,” he said.

He also called the $50 million figure of potential tax revenues “conservative.”

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