Wheeling Island Hotel, Casino and Racetrack decided this week to pay the annual $2.5 million licensing fee to the state and extend table games for at least another year. That decision will save about 100 jobs and help protect the casino from losing even more business to the growing number of competitors in Ohio and Pennsylvania.
Wheeling Island General Manager Osi Imomoh implied the renewal is also an act of good faith in hopes the Legislature will lower the 35 percent tax rate or the licensing fee that casino operators pay. “We’re biting the bullet for one more year to see if we can truly work through (the issues),” Imomoh told me on Metronews “Talkline” this week.
That’s going to be a challenge. The Legislature and the governor would have to agree on restructuring the taxes and fees. While the state has come to count on the big money that flows into the treasury from gambling—about $440 million this year—many politicians are reluctant to be seen as supportive of the industry.
Senate President Jeff Kessler is an exception, sort of. He told me on Metronews “Talkline” this week that he wants to keep the tax rate where it is, but he is open to pro-rating the table games licensing fee based on the number of tables.
Kessler and others tried something similar earlier this year. The Senate approved 23-10 a one-year, $1 million reduction of the table games licensing fee for all race track casinos. However, the bill ran into stiff opposition in the House of Delegates and eventually died.
Lawmakers are pushing a comprehensive study of the state’s gambling industry to quantify how it is being impacted by increasing competition in surrounding states. Kessler says legislators can use the findings to re-evaluate the taxing structure for gaming.
But with 46 Republicans in the House, as well as some Democrats who are reluctant to support gambling, any legislation that lowers the tax liability for casinos will be a tough sell. Combine the existing reluctance with the fact that every member of the House is up for re-election in 2014, so it would take a Herculean effort to win approval.
The argument against adjusting the taxes and fees will be that the state is not giving a break to other businesses, so why help gambling?
The nuanced, but accurate response is that the state—like it or not—is in a partnership with the casinos. The state licenses them, taxes them at a separate rate from other businesses and regulates them. And as a partner, the state has a significant fiscal stake in the success or failure of those casinos.
The study, when completed, will provide greater detail of what we already know; the casinos sprouting like mushrooms in neighboring states are quickly wiping away West Virginia’s regional dominance and cutting deeply into business.
The decision for lawmakers will be whether to push back against that competition or accept the inevitable decline of the state’s casinos.