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Upping the ante for revenue: Lawmaker pushing bill to allow more video lottery machines


Bluefield Daily Telegraph

BLUEFIELD, W.Va.  — State and local revenue from video lottery facilities may increase if a bill being pushed by Del. Marty Gearheart (R-Mercer, 27) passes.

“The number of machines out there in the market place is capped (at 9,000),” he said. “However, what you have is a lot of those machines are in locations that are not very profitable, and only five in each place.”

Gearheart wants to allow up to seven machines in video lottery gaming stores, but in fewer, and nicer, places.

“We would have fewer stores, but we could generate more revenue,” he said.

The places would be more upscale, he said, because the change would also allow some ownership by owners of the machines.

Gearheart said owners of facilities now must prop up a business plan and may not have enough capital to have a nice building, including a restaurant.

“If we allow a percentage (20 percent) of those locations to be owned by those who have the capital to make them nicer places, that would help (generate more revenue),” he said. “We don’t want a gambling cartel, so we are limiting it to that 20 percent.”

Gearheart said those facilities are now big revenue makers for the state, bringing in hundreds of millions of dollars a year.

“Fifty-two percent of the revenues go to the state,” he said. “Some of that (2 percent) is distributed to counties and cities (where the facilities are located).”

Vicky Reed, county coordinator for the Mercer County Commission, said Mercer County sees about $16,000 a month from the video lottery revenues, or almost $200,000 a year.

“We have a current balance (in the account) of $87,268,” she said.

Reed said money in that account is used for unexpected expenses and some charitable giving.

“We try to keep that fund available for whatever can happen, like a plumbing or electrical problem (on county property),” she said. “It is basically used for emergency type things.”

Kelly Davis, the City of Bluefield’s treasurer, said the city receives about $3,700 a month from the state as its share of the video lottery revenue.

As of Dec. 31, 2016, the city had received a total of $22,704 since July 1 (the first six months of the fiscal year), she said.

“That money goes into the general fund,” she said. “We are not obligated by the state to use it in any particular manner, like the hotel and motel tax, which can only be used for tourism.”

Princeton receives about $2,300 a month.

McDowell County averages about $1,200 a month while Monroe County sees about $1,800 a month as their share of the revenue.

The more video lottery retailers a municipality has, the more money it receives.

There are more than 40 video lottery facilities in Mercer County, including those in Bluefield and Princeton. Four are listed for McDowell County (three in Welch and one in War) and five for Monroe County (all in Peterstown).

Gearheart said the industry is here to stay, so maximizing revenue from what he calls a “voluntary tax” is important.

“West Virginians for the most part are a little uncomfortable with some of these places,” he said. “But they are a reality and I don’t think we can do away with them. They (residents) would prefer them to be a little more substantial.”

Gearheart said the places will be more acceptable if they are as presentable as possible and serve good food.

“This is one of my ways of generating extra money without bringing extra taxes,” he said.

For December 2016 alone, more than $500,000 was distributed to counties, cities and towns throughout the state from video lottery revenues. 

However, overall annual revenue for the state from video lottery machines has actually fallen, from just over $400 million in 2009 to about $373 million in 2015, the latest annual report from the West Virginia Lottery available online.

According to the West Virginia Lottery website, video lottery is the legal use of player interactive gaming machines similar to those commonly known as “slot” machines in the casino industry. As of 1994, video lottery was approved, with restraints set forth by law, at West Virginia’s four thoroughbred and greyhound racetracks. The issue had to be approved by voters in the counties in which each track is located.

In 2001, the West Virginia Legislature passed a bill allowing for a limited number of video lottery machines in adult environments. It is referred to as the “Limited Video Lottery Act.” The measure outlawed pre-existing “gray” or “poker” machines and restricted the number of Limited Video Lottery terminals to no more than 9,000.

The environments in which they are permitted are classified as adult-only based on the fact that they possess a Class A, Alcohol Beverage Control Administration (ABCA) license and meet various other legal requirements.

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