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West Virginia Lottery brings in $20M more than expected

Jul 22, 2009, 6:09 pm

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West Virginia Lottery

The West Virginia Lottery beat its forecast by $20 million during the just-completed fiscal year, despite the recession and competition from neighboring Pennsylvania, agency officials announced Wednesday.

Sales reached $1.49 billion during the 12 months that ended June 30, or just over 1 percent more than expected.

State government's share of the resulting revenues topped $616.6 million, while West Virginia's counties and municipalities together reaped nearly $16 million.

But an overall decline in lottery sales that began in mid-2007 continued. And despite the better-than-forecast showing, that trend is expected to persist with sales dipping by an estimated $104 million during the fiscal year that began July 1.

More competition from Ohio is ahead, officials say. Director John Musgrave told Lottery Commission members at Wednesday's monthly meeting that Ohio plans to install around 2,500 video machines in that state's seven racetracks. Ohio's lottery director has asked to visit one of West Virginia's tracks with some of his staff as they learn the ropes, Musgrave added.

"We'd rather see them competing on a level playing field," he said. "As a result, we're usually very happy to share information."

Musgrave noted after the meeting that it should take Ohio several years to start this new arm of its lottery system. He continues to believe the recent adoption of casino-style table games at three of West Virginia's four tracks should help attract Ohio gamblers following the debut of video poker- and slot-style machines there.

All four of West Virginia's tracks rely on out-of-state gamblers for at least half their business.

"If you can play the games closer to home, you probably will," Musgrave said. "(But) table games give us something else to offer the customer."

About $848 million of the budget year's sales came at the Mountain State's tracks, which host around 11,460 machines.

Wheeling Island Hotel-Casino-Racetrack saw revenues increase from last year, by 1.38 percent. It launched its table games in the fall of 2007.

Mountaineer Casino, Racetrack & Resort, also in the Northern Panhandle, debuted table games at the same time but saw revenues drop 8.5 percent. Nearby Pennsylvania began opening competing slot machine parlors in late 2006 and now has eight, with the $780 million Rivers Casino in downtown Pittsburgh on schedule to join the roster next month.

The Eastern Panhandle's Charles Town Races & Slots, which accounts for more than half of racetrack video lottery revenues, lacks table games and saw a decline of 4.2 percent.

Tri-State Racetrack & Gaming Center suffered the biggest hit for the year, 21.6 percent. The Nitro track is the smallest revenue provider of the four, and started offering table games in September. It has blamed its decline partly on Kanawha County's anti-smoking ordinance, and is hoping Nitro's City Council can exempt it.

Table games at the three eligible tracks grossed $34.2 million during the fiscal year, on par with the forecast. The limited video lottery machines at bars and clubs account for $412 million of the sales total, or nearly 6 percent more than projected. Traditional lottery games, including scratch-off tickets and such online games as Powerball, saw sales total $198 million.

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