West Virginia’s gamble to be one of the first states to seize on legalized sports betting appears to be paying off. The U.S. Supreme Court, in a 6-3 decision Monday, struck down the 1992 federal law that banned wagering on sports events in all but a few states.
Earlier this year, the West Virginia Legislature approved sports betting at the state’s five casinos and on mobile phone apps linked to the casinos. SB 415 passed with bi-partisan support—24-10 in the Senate and 77-22 in the House. Governor Justice allowed the bill to become law without his signature to avoid the appearance of a conflict, since he owns the Greenbrier Resort and Casino.
The Supreme Court decision was the result of a New Jersey case, so that state is positioned to quickly take advantage of sports betting. ESPN reports that Delaware is also ready to go, while West Virginia, Connecticut, Iowa, Mississippi, New York and Pennsylvania have “either already enacted state laws to allow sports betting or have fast-tracked legislation.”
(Read more here from Brad McElhinny about the Supreme Court’s decision and reaction from West Virginia officials.)
Governor Justice called the Supreme Court decision great news. “We all know there’s a lot of illegal sports betting going on all over our country. For us now to be able to capture dollars that are significant and meaningful to our state, as well as other states, that’s what I think we ought to do.”
However, sports betting may not be the financial windfall that some are hoping for. A study commissioned by the West Virginia Lottery reports that the ten percent tax on the adjusted gross will generate only about $5 million for the state the first year.
Casino operators also do not expect a huge return on sports betting, since 95 percent of the amount wagered will be returned to players in winnings. They believe the real bump will come from the additional amenity of a sports book that will give customers another reason to visit the casino.
West Virginia Lottery Director Alan Larrick said on Talkline Monday that they still have a lot of work to do before anyone can place bets. The Lottery must adopt specific rules and regulations dictating precisely how sports betting will work, but he said the goal is to have everything in place in time for football season.
Also, the issue of the “integrity fee” is still hanging out there. Eric Schippers, a senior vice president with Penn National Gaming, which owns Charles Town Race Track and Hollywood Casino, told me a framework is in place for a deal with major league sports whereby the casinos would pay a fee for certain services, but nothing has been finalized.
Governor Justice is keeping the door open for a special legislative session to make any adjustments in the law necessary for sports betting. “I think there needs to be some additional discussion… I don’t know if there’s a way to do it without legislation.”
Legislative leaders have made it clear they do not want to revisit the law. They do not want an integrity fee to come out of the state’s share and they believe that the bill they passed is fundamentally sound. Reopening the bill could result in a scrambled mess.