Governor walks fine line on W.Va. sports betting talks

CHARLESTON, W.Va. — Gov. Jim Justice, after initially steering clear of West Virginia’s sports betting issue, let his position be known in recent weeks.

“I want it done,” he told a high-level gathering of people behind closed doors to discuss a fee from casinos to pro sports leagues last week.

That’s a change from his early hands-off approach. After the Legislature passed a bill to make gambling on sports legal at the West Virginia’s five casinos, Justice let the bill pass into law without his signature.

Justice faces some significant complications.

His family owns The Greenbrier Resort, which has a casino. And the resort hosts West Virginia’s only major professional sporting event, The Greenbrier Classic PGA tournament, as well as practice visits by NFL and NBA teams.

Justice never has completed a blind trust, although it’s also never been clear how he wouldn’t know he owns The Greenbrier.

So, for a variety of reasons, the governor’s position is tricky.

In recent weeks, Justice has consistently expressed support for professional sports leagues seeking a slice of the overall wagers.

The leagues say a share they’ve been calling an “integrity fee” is necessary in fairness to their product.

The governor says there’s no reason to make an enemy of the leagues, that there may be upside for West Virginia pursuing a friendly relationship with major league sports and that the casinos can afford the fee.

And the casinos say the governor’s involvement has run its course.

When representatives of the casinos and professional sports leagues gathered last week for a sometimes contentious meeting over millions of dollars last week in the “War Room” at state Lottery headquarters, Justice’s position was loud and clear for everyone in the room.

In all, there were 24 people listening as Justice spoke last Wednesday morning. This story is based on the recollections of eight of those who were there.

“The governor called in and told us to stay in the room until we reached a resolution on the integrity fee,” said one of the attendees, John Cavacini, president of the West Virginia Gaming and Racing Association that represents the state’s racetracks.

About an hour into the meeting, Bray Cary, the senior advisor for the Justice administration, got up from the conference room table, gathered up a speaker phone and punched in the governor’s number.

Justice talked for more than five minutes, said those who were there. He spoke off the cuff, sometimes in swirls. At one point, he talked about “hair in the oatmeal” to describe the reasons people were resisting a deal.

“I feel very strongly about this, and I know there will be pushback from the tracks. I just want everybody to know that I will continue to try,” the governor said, according to accounts by several who were in the room.

“But in this situation, I want it done, and I want it done because it makes no sense that we don’t have a good partnership with the leagues.”

Justice expressed regret that he couldn’t be at the gathering in person, but the voice that came out of the speaker phone made its message clear: The governor wanted a deal to be hammered out while everyone was gathered together in Charleston.

“We can go one of two ways – go this way, which seems absolutely reasonable or we are going to become really at odds with each other,” Justice said. “I just want ya’ll to work together and be smart, and I hate it like crazy that I have this conflict because I want to get it done, so everybody can win.”

One of the casino representatives who was there concluded, “He wasn’t eliciting opinions.”

Those who were listening were high profile.

There were officials with Major League Baseball, the National Basketball Association, the National Hockey League and the Professional Golf Association.

The casino representatives were from the American Gaming Association, Penn National Gaming, Eldorado Resorts, Delaware North and William Hill U.S. Race and Sports Book.

There were also representatives from West Virginia and Marshall universities — which have their own concerns about compliance with in-state sports betting — as well as legislative staffers and West Virginia Lottery staff.

Justice wanted to see common ground.

“If I’m going to be in this position for six more years, I don’t want this hacking at us,” the governor concluded before ending the call. “Get it done.”

Justice hasn’t limited his statements to the speaker phone presentation.

Reacting to reporters questions on Monday, a few minutes after the Supreme Court struck down a nationwide ban on sports betting in states, Justice repeated many of the themes he’d expressed to the casino operators and big league sports reps.

“I think there’s a real benefit, always, to partnering with people rather than fighting,” Justice said to reporters who gathered around him at the Capitol. “And the amount of the integrity fee is going to be borne by the casinos. And they can afford that. Our state is really having to pay nothing.”

National writers who cover the gaming industry have pointed out that any money paid to leagues by casinos is money that might otherwise come to the state.

But Justice told reporters the state could grow its relationships with the pro leagues out of the current negotiations.

“You have a relationship with all the sports leagues that could just bring additional goodness to us,” Justice said. “That’s the bottom line. That’s it. That’s my entire philosophy. Why fight with people and push back when they have the opportunity to help us and help us grow the potential of sports betting?”

The governor then took aim at speculation over his relationships with the pro sports leagues through The Greenbrier.

“I’m not trying to do anything behind any doors,” he said. “All I’m trying to do is help West Virginia. And from the thought of ‘Why is the governor doing this from the standpoint of spending political capital?’ — well, first of all, I don’t care about political capital.

“And the other thing is: ‘What the governor’s doing has to be something that’s beneficial from the standpoint of The Greenbrier.’ That’s so much garbage it shouldn’t even be reported. It is garbage. I have never had a conversation with any of the sports teams in any way, shape, form or fashion that have ever been to The Greenbrier.”

His comments to reporters concluded, “Remember, I’m in this to help West Virginia. I don’t need anything whatsoever from being governor to help myself.”

Cavacini, the lobbyist for the racetracks, contends that of the states currently considering sports betting legislation, no governor has taken nearly so active a role.

“None of those 11 states has the governor gotten involved in the question of an integrity fee,” Cavacini said this week. “This is the only governor that has gone out on record supporting big league sports and asking for money from the private sector for them.”

Another of those who attended was Eric Schippers, a vice president for Penn National Gaming, which owns Hollywood Casino at Charles Town Races.

This week, Schippers offered public thanks to the governor for bringing all sides to the table. But Schippers and the other casino representatives contend the state’s direct role in the relationship between casinos and pro sports leagues should be over.

“The governor expressed his interest in trying to bring both sides together. We appreciate that,” Schippers said, noting that conversations were already ongoing but that West Virginia provided a new venue for talks to continue.

“We just have a fundamental disagreement that this should not be done legislatively.”

West Virginia’s Legislature has expressed bipartisan disinterest in revisiting the integrity fee issue.

Delegate Roger Hanshaw, R-Clay, was another of those in the room for the discussions at state Lottery. He is among those who thinks a deal between the pro sports leagues and the casinos doesn’t need legislative involvement.

“If the casinos and major league sports think there’s some mutual reason why they should do this, then by all means, go to town,” said Hanshaw, vice chairman of the House Judiciary Committee. “But I’m not sure there’s necessarily any reason yet to think that the state ought to do it.”

Hanshaw also emphasized that if there is a transaction between the leagues and the casinos that it shouldn’t come out of the state’s share. The governor’s public statements have also reflected that priority.

Hanshaw also doesn’t see the governor’s role as being necessarily inappropriate.

The governor has conflicts on both sides of the issue because The Greenbrier has a casino and pro sports events. But that also gives Justice a unique perspective.

“The governor is sort of in the position of maybe being the only person who lives in both those worlds,” Hanshaw said. “He has the professional sports relationship, and he is a casino operator.

“To the extent that it’s not impacting the state’s share, if he wants to be a mediator of a private business deal between private parties, I suppose that’s a role he can play.”

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