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WV Lottery revenue continues climb, with sports betting on horizon

May 23, 2018, 10:32 am

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West Virginia Lottery

West Virginia Lottery revenue continued to climb in April, as more money spent on video lottery and traditional online and scratch-off games offset declining revenue numbers at the state's racetrack casinos.

"Fortunately, our pluses are ahead of our minuses, so we are about 1 percent ahead on sales," Lottery Director Alan Larrick said after Tuesday's Lottery Commission meeting.

Traditional lottery sales are up 7 percent so far this budget year, while limited video lottery at bars, clubs and fraternal organizations around the state is up 5 percent over the same point last year.

That $10 million growth in traditional lottery sales, and $15.28 million growth in video lottery, helped offset a 4 percent decline in revenue from casino video slots (down $16.72 million) and a 10 percent decline in table games revenues (down $3.43 million), Larrick said.

After peaking in 2007, the state's four racetrack casinos have seen a steady decline in revenue, as dozens of competing casinos popped up in Ohio, Pennsylvania and Maryland.

However, Larrick hopes that trend will reverse itself come August or September, once people can bet on sports at the state's casinos. In March, state lawmakers approved legislation legalizing sports betting at the state's casinos; last week, the U.S. Supreme Court overturned a federal law banning sports betting in most of the United States.

"What we're hoping is, with the sports gaming, we're going to have new people coming into the casinos," Larrick said. "Those people, we feel very confident, are not only going to play sports gaming, but are going to use the other facilities of the casinos."

Likewise, Larrick said, he's optimistic people coming into West Virginia to place sports wagers using smartphone apps will patronize restaurants, clubs and other venues while in the state. Under the new law, bettors can register with casino sports books using a smartphone or computer app, but must be within West Virginia borders when they place those bets.

Lottery Commission staff is working to have draft rules and regulations for sports betting ready to go out for public comment within 30 days, Larrick said. He said Lottery officials have been working with gambling regulators in Nevada, where sports books were already legal, and in New Jersey and Mississippi, which had drafted sports gaming rules in anticipation of a favorable Supreme Court decision.

Larrick told commissioners Tuesday the Lottery's goal remains to have sports betting up and running in state casinos by the start of football season. "That's certainly our goal, and we're well toward that goal, but we're not going to start until we know we can do it 100 percent correctly," he said.

West Virginia University and Marshall University each start their seasons on Sept. 1, and the National Football League season starts on Sept. 6.

For a time, West Virginia may have a regional monopoly on sports betting. The only nearby state that has legalized sports betting is Pennsylvania, but gaming industry experts have said that state's $10 million licensing fee and 36 percent tax on casino profits are exorbitantly high and will dissuade casinos there from opening sports books.

By comparison, West Virginia casinos will pay $100,000 for a five-year sports gaming license and will pay a 10 percent tax on profits.

For April, total Lottery revenue of $91.89 million was up $1.95 million, or 2.2 percent, over April 2017, marking the second consecutive month of revenue growth. March revenue broke a month-to-month streak of declining revenue that dates back to 2012.

Again, traditional sales of $13.72 million were up $570,000 over April 2017, while video lottery saw an increase of $3 million to $32.58 million, offsetting declines for the month in racetrack video lottery and table game revenue.

The state's share of Lottery profits for April was $44.04 million, up about $860,000 over April 2017.

Year-to-date, Lottery gross revenue of $904.45 million is up $6.19 million over the same point in 2017. The state's share of Lottery profits, year-to-date, is $416.5 million, up about $170,000 over the same point last year.

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