Racetrack Gaming Issues Heat Up in WV

February 25, 2016
Tom LaMarra, Blood-Horse

The West Virginia Senate Feb. 25 had first reading on legislation that would defund and decouple greyhound racing from gaming but maintain requirements that Thoroughbred racing receive its share of revenue from video lottery terminals and table games.

A day earlier the bill cleared the Senate Finance Committee. Another Senate measure that called for decoupling of greyhound and Thoroughbred racing has yet to be heard in committee, but a bill introduced in the House of Delegates would shift all gaming revenue that goes to purses and breed development programs for horse and dog racing to the legislature for appropriation as it sees fit.

According to a fiscal note in the Senate bill, the statutory percentage of revenue from gaming that goes to dog racing purses is about $7.1 million, with projected deposits to the West Virginia Greyhound Breeding Development Fund estimated at $3.2 million for fiscal 2017. The revenue would be redirected to the State Excess Lottery Fund for appropriation by the state legislature.

Two casinos with dog racing wouldn’t be required to have racing licensees to keep VLTs and table games, and they would be permitted to continue full-card simulcasts even if live racing isn’t offered.

The bill states that beginning July 1 of this year, and each fiscal year thereafter, money used for “regular purses” will only include amounts distributed to each Thoroughbred racetrack video lottery licensee, in this case Hollywood Casino at Charles Town Races and Mountaineer Casino, Racetrack & Resort. The provision is mentioned twice, once for VLTs and the other time for table games.

An amendment approved by the Senate Finance Committee before the overall bill was approved tinkers with the statute that mandated county referendums on racetrack gaming and allows the counties to repeal racetrack gaming via referendums. Statute requires that only 5% of registered voters sign a petition calling for a repeal vote; the new bill changes it to 20%.

A representative of the West Virginia Racing Association, which lobbies for tracks, not horsemen’s groups, said the increase in the percentage is necessary should special interest groups call for a repeal given repeated legislative shifts in purse revenue from VLTs and table games to other state programs.

Jefferson County, where Charles Town is located, is particularly bullish on maintaining the year-round Thoroughbred racing and breeding industry. Track owner Penn National Gaming Inc.’s first attempt to win approval for table games failed in a county referendum.

During a regular House session Feb. 24, lawmakers discussed efforts to restore purse money that has been shifted to pay down the debt of the state workers’ compensation fund since the mid-2000s. The redirection of funds was supposed to sunset when the debt is paid, probably this year.

The legislature in the waning hours of a special session in 2015 passed a bill that makes a portion of purse money subject to appropriation rather than statutory purse payments.

Del. Stephen Skinner, who represents Jefferson County, said it’s time to “fix promises made back in 2005.”

“Because the purse fund has been subject to ongoing nibbles and nibbles from the legislature, (Thoroughbred) breeding activity is actually down in West Virginia, and the purse fund is down almost 50%,” Skinner said. “If we can’t pay out to the people winning races, they can’t buy horses and they can’t raise horses.

“We have an industry in West Virginia we should be proud of. It shouldn’t be treated differently than coal.”

Del. Eric Nelson, who introduced the House bill that would end statutory funding for horse and dog racing and breeding, disagreed. He said live pari-mutuel handle in the state in 2014 was $30 million, down from $300 million in 1987, and that restoring to purses from even half of the workers’ comp funds—about $5 million for fiscal 2016—would create other budget gaps that would need to be filled.

Nelson didn’t discuss handle generated via simulcasts from out-of-state tracks or how the tracks have increased handle on their live product by exporting signals.

Del. Pat McGeehan, who represents Hancock County, where Mountaineer is located, told his colleagues all the casinos in the state but one are located at racetracks, and that the intent of the gaming law was to bolster live racing and breeding.

“This is really about keeping promises,” McGeehan said. “You’re taking my constituents’ money and just redistributing it into the general fund after promises have been made. I’m sorry if I don’t trust criminals—I’m sorry I mean politicians—to appropriate these dollars back to racing (if they are subject to legislative appropriations rather than statute). I just don’t trust that.”

2016-12-14T16:09:33+00:00 February 25th, 2016|Categories: Legislative|
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