Posts Tagged ‘WV Revenue’

“Be Prepared”

Sunday, July 2nd, 2017

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

Sunday, June 11th, 2017

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

 

Missing Out

Tuesday, March 7th, 2017

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

Tuesday, February 21st, 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

Wednesday, February 8th, 2017

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.

 

Lottery Revenue vs. More Taxes

Monday, July 14th, 2014

A new opportunity for the Lottery industry and horse racing became public last week.  EquiLottery a Kentucky based company has developed an innovative horse racing and lottery game.

Just last month I wrote with Lottery revenue continuing to decline I would assume the WV Lottery has a “think tank” to look for and assess new ideas and concepts.  Well here is one.

EquiLottery connects the results of live horse races to the lottery experience, while providing a social element many lottery games currently lack.  EquiLottery racetracks could become the focus of horseplayers around the world.

Studies were conducted by Gaming Laboratories International forecasts in the first year of implementation EquiLottery will perform around 3-4% of the lottery’s current annual revenue.

EquiLottery says the game would allow lottery players to participate in the same wagering pools as horseplayers, with the game promising to create dynamic payout for lottery and horseplayers while keeping in line with the legislative and financial realities of international lottery corporations.

Brad Cummings, EquiLottery President & CEO wants to increase exposure of horseracing and develop new fans but he made it clear that lotteries also need ample incentive to incorporate new games into their corporate strategies.  He said this comes at a time when both racing and lottery industries are looking for ways to adapt to the evolving market place.

To assist lottery “think tankers” or my readers here is a website link for EquiLottery.

This leads me back to the need to generate new lottery revenue in West Virginia.  Lottery revenue provides funds for various services.  Without it a state tax increase may be required.

Let’s hope Lottery leaders and others take a look at this new idea.