“Be Prepared”

Last week the U. S. Supreme Court  said it will hear New Jersey’s appeal to legalize sports betting. West Virginia Governor Justice, Members of the Legislature and the racing industry needs to “Be Prepared.”

Phil Kabler has an encouraging story in today’s Gazette-Mail. Of course, everything at this point is speculation.  However, revenue potential is out there if WV gets ahead of the Border States as it did with the Lottery.

Governor Justice and the Legislature need to do something similar to a Maryland proposal. West Virginia needs to  establish a working group to monitor the recent developments, study how sports’ betting was implemented in other states; and recommend changes needed to facilitate sports betting in West Virginia and offer a beginning point for revenue allocation.

The allocation of potential revenue is where the racing industry comes in.

Horse & greyhound owners, trainers, breeders and Jockeys need to develop a strategy. There should not be a Charles Town, Mountaineer, Mardi Gras or Wheeling Island strategy but an industry wide one.   It needs to address research, planning, and relationship building, messaging, fund raising and political engagement.

It can no longer be business as usual for government leaders. The racing industry needs to come together.  Fresh thinking and an open mind to doing new things will be required.

Act Now

The Herald Dispatch in Huntington today ran the editorial below calling attention to online gambling being looked at by various states. Phillipsbillboard.com has called attention to this revenue opportunity that West Virginia should consider.  The Huntington newspaper has well stated the case.

[Editorial: More states are considering online gambling]

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.”

As neighboring states added lotteries or expanded casino options, West Virginia did, too. Total gaming revenues continued to rise until the Great Recession, topping out at almost $1.6 billion in 2007. But the trend line has been up and down since then, and unfortunately, mostly down.

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.

Links to previous Phillipsbillboard.com blogs on this subject.

http://phillipsbillboard.com/?p=3402

http://phillipsbillboard.com/?p=3406

 

Secret Meeting

(Editor’s note: Served as a Member of the WV Racing Commission from February, 2013 until January 31, 2017 when Governor Justice replaced me after taking office.)

A visit to the website of the WV Racing Commission revealed they are ending the ability for interested parties including the press and commission staff to “call in to the meeting”. Those not based in Charleston will need to travel & spend money to know what is taking place.  This is a disturbing development.

Those investing in the racing industries are struggling in the changing industry. They need a cost effective way to know what decision makers are considering and the commission discussion before taking action.

Some of those employed by the commission are remotely located in distance places from the state capitol will need to spend (ever dwindling) commission funds to be present for meetings that may only last an hour. Often this staff needs to provide input on agenda matters as well as being informed.

This appears to be a step to keep the public & press in the dark. Whether it is required by law or regulation state government commission meetings should be made easy for parties to listen and participate.

When I was named as a Commissioner I urged regular standing meetings, more information to be provided on the agenda (outside of personnel matters) and a robust website that was easier for everyone to use. Persons should have an opportunity to listen and learn as well as speak – under public comments – without making an eight hour trip.

What are they trying to hide?

After Thought

 [Editor’s Note: During the Reagan Administration I was responsible for rural development policy based at the U. S. Department of Agriculture.]

Secretary of Agriculture Sonny Perdue went to an urban city (Cincinnati) to tell rural citizens and communities he was upgrading the department’s rural development agency. His spin was the program would report directly to him.  Who is he kidding?

Best guess is Perdue will create a “special assistant” position of which there are hundreds in Washington to oversee the programs of rural business, housing & utilities. Prior to Perdue’s action there was an Undersecretary for Rural Development to promote the cause of non-farm Rural America inside the department and on Capitol Hill.  He eliminated the Undersecretary position yesterday.

Even with an Undersecretary for Rural Development it was hard to get a few minutes of the Secretary’s time. Rural Development has always been the “red headed step child” at USDA.  Now what?

Why is it important to have an Undersecretary for Rural Development? First, it requires Senate confirmation and without it there is far less accountability to Congress.  Also, the position of an Undersecretary has much more clout to make the case for non-farm Rural America inside the department and on Capitol Hill.  Besides the title Undersecretary commands much more media and attention.

By the way. Congress passed the Rural Development Act of 1972.  Basically this legislation gave the responsibility to Department of Agriculture to coordinate rural development throughout the Federal government.  Now what?

Rural community leaders, economic development organizers, national state & local organizations and advocates of rural lifestyle need to get involved. The only hope to turn back this effort is for Congress to say no.

Social media gives us as rural advocates an opportunity to organize. Tweet your concern using the hashtag #saveruraldevelopment .  Post on Facebook your story about how your community has benefited from the rural development programs.  Email or write your Member of Congress to #saveruraldevelopment.

At Trump’s Elbow

[Editor’s Note: During the Reagan Administration I was responsible for rural development policy based at the U. S. Department of Agriculture.]

President Trump’s Secretary of Agriculture Sonny Perdue was sitting at the elbow of President Trump in the White House about the time he released a welcoming message to USDA employees. I had an opportunity to read the Secretary’s email and was taken back, since never once did he use the word “rural” or “Rural America.”  I repeat “never.”  Just think – he was at 1600 Pennsylvania Avenue as The President was establishing an Interagency Task Force on Agriculture and Rural Prosperity  – which Secretary Perdue will lead.

Rural America sent a message in 2016 that Rural America it counts. That message may have been lost on Secretary Perdue but not President Trump.  About 20 percent of the country lives in rural America, just less than 60 million people.  Exit polling showed rural voters made up 17 percent of the electorate.  Hillary Clinton lost rural America 3 to 1.

Politico had a piece after Trump’s victory entitled “Revenge of the Rural Voter” which I hope Secretary Perdue will read. But once he gets to USDA he will be captured by the agriculture interests who have little or no interested in nonfarm Rural America.  There are more small town residents….than there are farmers.

After soaking in the Politico story I posted on Facebook my hope the Trump administration would pay attention to the voice of the 2016 rural voters and seek out a rural development advocate to lead USDA. There is still hope that Secretary Perdue will be that advocate and follow the example set by President Trump.

Missing Out

Is West Virginia missing out on new revenue – by not thinking ahead?

Maryland’s Legislature is taking steps to be prepared. Forward thinking members have introduced legislation to assure the State is ready to take advantage of sports betting.  Introduced February 8th and its first hearing was held March 1 reported the Thoroughbred Horsemen’s Association (THA).

Republican Delegates Jason Buckel and Kevin Hornberger said their bill is a “forward-thinking and practical approach for what we think is not a matter of if but when” sports betting is legalized in the U.S.   They said the idea is to have a framework in place so Maryland “could turn it around quickly rather than wait three or four years.”

That is what ought to have been done in West Virginia. As early as February, 2014 this blog suggested the State and more particularly Lottery begin looking at gaming options.  The options may not be popular but revenue can be produced – what is needed now even more so than in 2014 – revenue.

Last month phillipsbillboard.com urged Governor Justice to begin initial study of sports betting.

According to THA Maryland’s legislation does nothing more than establish a task force to monitor action of federal laws; study implementation of sports betting in other states; and make recommendations on changes needed to facilitate sports betting in Maryland. The bill does offer a starting point for the allocation of revenue.  The task force could make its own recommendations.

THA points out that sports betting can only be offered by “repeal or amendment of the federal Professional and Amateur Sports Protection Act in a manner that does not prohibit the state from allowing wagering on sporting events or a determination by a federal court or the United States Department of Justice that (PASPA) does not prohibit the state from allowing wagering on sporting events.”

Is it going to be the same old story – a day late and a dollar short?

1933 vs 2017

(Please note: Research for this piece came from Herman Guy Kump: A Political Profile by Albert Steven Gatrell.  Governor Kump’s granddaughter gave me the book.)

It is beginning to sounds like our State is facing issues in 2017 similar to 1933. Today one can read in various publications that West Virginia is near a depression.  Governor Justice certainly made it sound like that in his recent State of State address.

I can recall on more than one occasion Governor Underwood (Cecil H) telling me had it not been for Governor Kump (Herman Guy) West Virginia may not have made it through the depression.  I never questioned Cecil but decided now was a good time to look into what Governor Kump faced and how he “saved the state.”

In 1932 West Virginia voters in passed a Tax Limitation Amendment to the State constitution. It was to bring relief to people losing their farms or homes to tax sales.  It placed maximum tax rates on real property and various other taxable items.  This effectively reduced the role of local governments by limiting their taxation authority.  At the time local governments were responsible for public schools, roads, etc.

Governor Kump, not unlike Governor Justice, found declining revenue and money to run State government lacking. The State was nearing bankruptcy. However, Governor Kump had the support of businessmen, legislative leaders of both parties and the state’s lawyers.  That does not appear to be the case for Governor Justice.

Kump, a Democrat had only a few Democratic members of either House who were experienced legislators. Only a handful was serving a third consecutive term in the House, while only three Democratic senators were serving a second term.  Sound familiar Governor Justice?

Kump who only had taken office in March 1933 called an Extraordinary Session of the Legislature in April. He explained that Extraordinary Session was imperative because “Our industries, trade and commerce are facing ruin.  Our public institutions are closing.  Our State is in financial distress.”

Among the other issues of the time Kump had to address funds for schools and roads since the Tax Limitation Amendment had put a limit on local taxation authority. To do so the State took over local roads and had to provide aid to schools.  This brought about the consumer’s sales tax and an income tax.

Governor Kump told the lawmakers to forget politics and remember why the people elected them.   He later called on the people to contact their representatives.  Today Governor Justice is using 21st century communication tools appealing for “the peoples support.”

The Legislature gave Governor Kump powers to reduce salaries, reorganize departments and bureaus, and dismiss staff.   Kump did dismiss staff and reorganized departments (or eliminated them) for economic reasons and he ordered a reduction in pay for state employees.  Generally, the pay reductions were about 25 percent.

These sound about like Governor Justice’s Alternative Budget which cuts spending by $450 million and would eliminate general revenue funding for state colleges and universities, as well as 21 programs and terminates 3,000 state jobs.

Most of Governor Kump’s revenue bill was adopted. It raised funds to provide essential public services and new revenue to aid local schools and local roads.  It replaced revenue lost from old gross sales tax. Industrial and commercial organizations would return to the State that they saved under the Tax Limitation Amendment; retail sales tax and an income tax were imposed; assessed valuations would be reduced if possible.

The fate of Governor Justice’s revenue bill is in the hands of the Legislature and will see how that works out.

You’re encouraged to comment. Just go to bottom of the post…look for Comment or No Comment and click.  Or go to phillipsbillboard.com to comment.

 

 

Gov. Justice Here’s One

Governor Justice is looking for “big ideas”. Here is a middle sized idea.

These ideas could help avoid a tax increase on our state’s residents. Plus help an industry with 7,300 jobs and communities and businesses that depend on the horse racing.

The concept is known as Advance Deposit Wagering (ADW). It is a form of wagering on the outcome of horse or dog races in which the bettor must fund his or her account before being allowed to place bets.

Currently Advance Deposit Wagering is not legal in West Virginia – but is should be. The WV Racing Commission endorsed this idea in a resolution I pushed in 2014.

There are 34 thoroughbred race tracks in the country and 20 states have legalized ADW. By making it legal state government, horse & dog owners and tracks receive a share of the ADW revenues.

The Oregon Racing Commission, which licenses and audits many of the largest firms taking advance deposit wagers, reports that online wagering via its licensed companies rose to $2.9 billion in 2015, from $952 million in 2005.

Nearby Ohio is considering legalizing ADW’s along with other states.

ADW’s opens up a whole new world to assist West Virginia. No longer will anyone wanting to bet on a race at West Virginia’s tracks have to visit at Off Track Betting facility.  West Virginians will not have to drive to the horse or dog tracks to bet.

Just own a computer, smartphone or tablet and an easy chair.   Just think of the market that opens up with ADW’s and the potential benefit to our state.

Here are some bit size ideas.

  • Fantasy sports are all the rage
  • Off Track Betting (OTB) facilities at strategic locations
  • Sports Betting is worth initial study
  • Instant Racing electronic pari-mutuel machines (Could be in OTB facilities)
  • EquiLottery a game combining lottery & horse racing

Should Governor Justice want a really big idea what about Internet gambling. Remember the huge money that came into West Virginia after the Lottery was established and casinos were built – before competition from nearby states?  Only three  states now offer it to their residents.  Likely this will involve working with the Department of Justice and Congress.

This will require a heavy lift by Governor Justice – but if anyone can do it he can.

You’re encouraged to comment.  Just go to bottom of  the post…look for Comment or No Comment and click.

 

History Repeats?

After reading Dan Milbank’s piece this morning I decided it was time for a blog.

My life has been consumed by politics.  As a youngster I passed out Republican literature at the polls (when you could get closer than 300 feet), helped local candidates run for office, started Teenage Republican Clubs and the list goes on.

The motivation was to see a strong two party system.  It appeared that goal was being achieved and long came the internal battle of 1964 – not unlike that underway.  But today it is but even worse.

To see people who are likely registered Republicans stand and cheer when they learned Speaker Boehner “a good man” had resigned is unbelievable (what happen to good manners) on the eve of a presidential election – one that is so important to our nation and the Republican Party.

When will these people come to their senses?  When will civility return?  Soon I hope or Republicans will see the chance of electing a president or governor in our state end up like 1964.

(Please take time to read Dan Milbank’s piece.  Click here.)

Manchin Decides

Before telling West Virginians U. S. Joe Manchin told the nation he will not run for Governor.  He appeared on CBS “Face the Nation” today.