Date Requested:February 14, 2013
Time Requested:04:30 PM
Agency: Lottery Commission
CBD Number: Version: Bill Number: Resolution Number:
2013R1258 Introduced HB2018
CBD Subject: VIDEO LOTTERY FEE FOR TEACHERS RETIREMENT
FUND(S)
Employee Pension and Health Care Benefit Fund
Sources of Revenue
Special Fund
Legislation creates:
Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    This measure will not increase costs to the State, but it will impose an enormous additional cost on the four licensed racetracks in West Virginia by adding a $1000 fee per authorized video lottery terminal each year. Currently, the Racetracks offering racetrack video lottery pay an annual $1,000.00 licensing fee, and they bear the cost of purchasing and maintaining video lottery terminals. On top of this, the racetracks pay an annual $2.5 million dollar license fee to offer table games. The State would generate new revenue, however, imposing such a measure may jeopardize the racetracks' ability to continue doing business in West Virginia as they are already facing decreasing revenues due to out-of-state competition.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2013
Increase/Decrease
(use"-")
2014
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 13,900,000 13,900,000
3. Explanation of above estimates (including long-range effect):
     Authorized Terminals Revenue
    
    Mountaineer Racetrack 3500 $3,500,000
    Wheeling Island 2400 $2,400,000
    Mardi Gras 2000 $2,000,000
    Hollywood Casino 6000 $6,000,000
    
    Total= $13,900,000
    
    This reflects a net increase of $13.9 million, however, it increases the annual racetrack video lottery licensing fees from $1,000.00 total to $1000.00 plus $1000.00 per terminal. The racetrack with the fewest authorized terminals will be faced with a license fee that rivals the $2.5 million table game license fee, and the racetrack with the most authorized terminals will be faced with a license fee that is more than double the table games license fee.
    


Memorandum
Person submitting Fiscal Note:
Danielle E Boyd
Email Address:
dboyd@wvlottery.com
    Assessing a fee of $1,000 per authorized terminal does not apply a fee for the number of terminals each racetrack has in use, only the maximum number permitted. Furthermore, the increase in licensing fees would be crippling to the racetracks' ability to continue offering racetrack video lottery in West Virginia. Increasing the racetrack video lottery licensing fee from $1,000 to $6,000,000 per year [in one case] is an unforeseeable and catastrophic increase to the cost of doing business. Such an increase could leave the racetracks with no choice but not to renew racetrack video lottery licenses, especially in light of the decreasing revenues they are already facing due to the onset of out of state competition.