Justice’s ‘tentative deal’ on WV sports betting is news to casinos

CHARLESTON, W.Va. — Gov. Jim Justice put out a news release shortly before noon today, touting a tentative deal between casinos and major league sports teams about sports betting in West Virginia.

The issue has been whether casinos would pay an “integrity fee” — essentially a tax on all bets placed — to the pro sports leagues.

“Gov. Jim Justice said today that a tentative agreement was reached Wednesday between the Lottery commission, the state’s licensed casino operators, and the sports consortium that will enhance sports betting in West Virginia,” the news release stated.

Trouble is, that was news to those who took part in a full day of discussions Wednesday at state Lottery headquarters.

“I was shocked. I was shocked,” said John Cavacini, president of the West Virginia Gaming and Racing Association, which represents the state’s five casinos.

Eric Schippers of Penn National Gaming, which owns Hollywood Casino at Charles Town Races, added in a separate telephone interview: “We were surprised. It looks like the governor’s office jumped the gun.

“There is no agreement. There are the bones of an agreement. There are concepts that both sides are discussing further, but it’s still at the conceptual phase. There is no agreement in place.”

Instead of a deal, both Cavacini and Shippers said, there is a “concept on the table” that all sides are looking at. It has to do with the casinos potentially buying data and stats from major league sports.

“What we said yesterday is we will look at contractual agreements between each property and major league sports and do it from a contractual standpoint,” Cavacini said.

“You have two private entities/profit makers that are in contractual arrangements with each other. And that’s how it should be handled. The state shouldn’t even be involved with it. I don’t know where the governor is coming from.”

Schippers said the talks in West Virginia have been a start that could lead to an agreement more broadly between casinos and major league sports leagues. But, he underscored, they’re not there yet.

“We do appreciate the governor bringing both sides together and serving as a mediator for what have been discussions going on internationally with the leagues, not just in West Virginia,” Schippers said. “It was helpful, and we appreciate the governors’ role.”

Another of those in the room Wednesday was Larry Puccio, the registered lobbyist for both Major League Baseball and the NBA in West Virginia. Puccio was the leader of Governor Justice’s transition team, and also is a lobbyist for The Greenbrier Resort, owned by Justice’s family.

Both Wednesday and again on the telephone today, Puccio didn’t go so far as to describe a deal.

“I thought it was a positive day, a great day. I thought good things happened,” Puccio said. “If the governor has interpreted it’s worked out, I never speak for the governor. I just speak for me.”

Justice’s news release described a resolution as a result of challenging talks among the participants.

“This was a difficult negotiation between many different parties, but the outcome will be very good for the State of West Virginia as well as the sports leagues,” Justice stated.

West Virginia’s Legislature passed a bill that would legalize sports betting in anticipation of a U.S. Supreme Court ruling. New Jersey is challenging federal law, and what other states will be able to do depends not only on the Supreme Court’s decision but on the finer points of its ruling.

Governor Justice let West Virginia’s bill pass into law without his signature, citing caution about his own connections. His family owns The Greenbrier, which has a casino and also plays host to The Greenbrier Classic PGA event.

In recent weeks, Justice has described calling a special legislative session to consider an “integrity fee” for the major league sports teams.

“I think we’re just gathering a little bit more information, I really believe that we need to bring them under the umbrella for the amount of the fee that they wanted, or we negotiated,” Justice said during a news conference with West Virginia reporters last week.

Originally, the leagues wanted a 1 percent cut of wagers. Justice, last week, said the number under discussion was less than that.

“They wanted a percent, we negotiated to a quarter of a percent and if we can get them to sign on for that and everything and bring them under the umbrella, I think that’s very very minimal cost to the casinos, and I think it would be a good thing,” Justice said last week.

The law passed by the Legislature had no fee at all, so reporters who cover the sports gambling industry wondered how that could be a good deal.

“And the idea that he negotiated the leagues down to a smaller percentage is bizarre, seeing as the state already has a law that gives them no fees whatsoever,” wrote Legal Sports Report in an analysis.

Justice’s news release today cast the talks as a win for the state. It was headlined, “Gov. Justice stands firm on sports betting integrity fee, state will pay nothing.”

“I insisted from day one that no part of an integrity fee for sports betting would be paid by the state,” the governor said. “I demanded that the entire fee be paid by the casinos.”

On the telephone today, Cavacini publicly questioned what’s going on.

“How can the governor turn his back on an industry that provides $350 million a year and employs 4,000 people in the state of West Virginia and side with the New York billionaires?” Cavacini asked during a telephone interview. “It’s just to give them money. It’s incredible.”

Justice briefly participated by telephone in the closed-door meeting that lasted from 10 a.m. to just after 5 p.m. Wednesday.

“He said ‘You guys sit in a room until you get it worked out,'” Cavacini recalled the governor instructing.

The meeting in state Lottery’s “War Room,” was led by Bray Cary, who serves as an unpaid “public servant volunteer” with the Justice administration.

Bray Cary, a citizen volunteer for Gov. Jim Justice, is first to arrive for a stakeholders meeting about sports gaming.

Cary, during the afternoon, split the casino and pro sports league contingents into separate rooms and engaged in the kind of shuttle diplomacy that Governor Justice has sometimes favored.

Those who were there included the athletic directors from West Virginia and Marshall universities, who were concerned about how betting in West Virginia might affect their compliance efforts.

The meeting also included representatives from Major League Baseball, the National Basketball Association, the National Hockey League and the Professional Golf Association.

Representatives came from Wheeling Island Hotel-Casino Racetrack, Mountaineer Casino, Racetrack and Resort, Mardi Gras Casino and Resort, Hollywood Casino at Charles Town Races and The Casino Club at The Greenbrier.

Stakeholders gather to discuss sports gaming at West Virginia Lottery.

And there were a few staffers from the Legislature, which may be expected to revisit sports gambling later this month. Delegate Roger Hanshaw, vice chairman of the House Judiciary Committee, was the only elected official there.

Justice’s news release said Lottery director Alan Larrick and his staff will be working on ways to implement the integrity fee and will determine what, if any, legislation is needed for codification.

No way on the legislation part, Hanshaw said this afternoon.

“There is certainly not a deal with the Legislature, I can tell you that,” Hanshaw said. “As I understand any deal discussed it’s really a question between the casinos and major league sports.”

Schippers agreed that there is no need for an official role for the State of West Virginia.

“If we’re to reach an agreement it would not be in any way opening up the legislation,” Schippers said. “The governor’s right on that part. It wouldn’t cost the taxpayers any money. It really, in our minds needs to be a separate, private party commercial agreement.”

The casinos view West Virginia’s new law as fine the way it is, Schippers said.

“The law that has been approved in West Virginia is a great law from our perspective, serves as a model for other states, models a Nevada law that has been in place for decades and doesn’t need to be changed,” he said.

And he said what’s now under discussion shouldn’t even be described as an integrity fee. He said the casinos may want to buy a product from the pro leagues: “Data that they could provide us. Various items that have a value to them and we’re trying to understand what value what price tag we could place on that.

“We could end up being partners with the leagues as opposed to being adversaries.”

The talks in West Virginia have been valuable, he said.

“It is beyond West Virginia, but WV has the benefit of being the first mover in this space,” Schipper said. “So it does make sense that we are speaking locally but this would have global implications if we can come to an agreement with the leagues.”

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