FISCAL NOTE
Date Requested: February 14, 2025
Time Requested: 04:35 PM |
| Agency: |
Lottery Commission, WV |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2646 |
Introduced |
SB498 |
|
|---|
| CBD Subject: |
Legal Gaming |
|---|
|
FUND(S):
“All County Fire Protection Fund,” “Emergency Medical Services Equipment and Training Fund," Innovation in Education Fund,” and “State Road Fund”
Sources of Revenue:
Other Fund Other Lottery Fund
Legislation creates:
Decreases Existing Revenue, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
All monies derived from the “Fire Department,” “Emergency Medical Services,” “School,” and “Roads” Instant Lottery Scratch-Off games will reduce, by the same amount, the total amount of monies available for appropriation in the State Lottery Fund and SB498 appears to require the Lottery to bear the cost. Total available monies for legislative appropriation from the State Lottery Fund will be reduced by an estimated $1.2M in FY 2026 (9 months in FY 2026) and an estimated $1.6M in FY 2027 (The “Fire Department,” “Emergency Medical Services,” “School,” and “Roads” Instant Lottery Scratch-Off games amounts). Revenue from the proposed games will not be incremental revenue. These games would take up a finite number of lottery ticket spots and be part of a larger product mix with no guarantee of annual revenues as each ticket will be competing for discretionary dollars of Lottery players and other instant tickets, including the dedicated Veterans' Cash game. More importantly, additional dedicated tickets may also impact the debt service coverage ratio and secondary bond tests that rely upon deposits from traditional lottery games. The “All County Fire Protection Fund,” “Emergency Medical Services Equipment and Training Fund,” “Innovation in Education Fund,” and “State Road Fund” may also reduce funding for existing Lottery beneficiaries as instant scratch-off revenue has remained relatively stagnant over the last decade. Each instant game produces a portion of the total instant ticket revenue. Dedicated instant tickets do not increase the total instant scratch-off revenue but reduce the total revenue available for appropriation to beneficiaries, including Seniors, Education, and Tourism.
The revenue estimates stated above are projections based on historical game performance and are not a guarantee of revenue. Revenue may be less based on actual performance and is expected to decline over time. Total available monies for legislative appropriation from the State Lottery Fund will be reduced by an estimated 1.2M in FY 2026 and an estimated $1.6M in FY 2027. Estimated costs include 7% sales commissions, a 1% cashing bonus, base printing cost of approximately 1.72% of sales, vendor fees of 4.28% of sales, 63.5% of sales in prizes paid, and administrative and advertising costs of 7.95% of sales. There is no defined end to this legislation, and sales are expected to diminish in subsequent years due to game fatigue.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2025
Increase/Decrease
(use"-") |
2026
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 |
1,200,000 |
1,600,000 |
Explanation of above estimates (including long-range effect):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
All monies derived from the “Fire Department,” “Emergency Medical Services,” “School,” and “Roads” Instant Lottery Scratch-Off games will reduce, by the same amount, the total amount of monies available for appropriation in the State Lottery Fund and SB498 appears to require the Lottery to bear the cost associated. Total available monies for legislative appropriation from the State Lottery Fund will be reduced by an estimated $1.2M in FY 2026 (9 months in FY 2026) and an estimated $1.6M in FY 2027 (The “Fire Department,” “Emergency Medical Services,” “School,” and “Roads” Instant Lottery Scratch-Off games amounts). Revenue from the proposed games will not be incremental revenue. These games would take up a finite number of lottery ticket spots and be part of a larger product mix with no guarantee of annual revenues as each ticket will be competing for discretionary dollars of Lottery players and other instant tickets, including the dedicated Veterans' Cash game. More importantly, additional dedicated tickets may also impact the debt service coverage ratio and secondary bond tests that rely upon deposits from traditional lottery games. The “All County Fire Protection Fund,” “Emergency Medical Services Equipment and Training Fund,” “Innovation in Education Fund,” and “State Road Fund” may also reduce funding for existing Lottery beneficiaries as instant scratch-off revenue has remained relatively stagnant over the last decade. Each instant game produces a portion of the total instant ticket revenue. Dedicated instant tickets do not increase the total instant scratch-off revenue but reduce the total revenue available for appropriation to beneficiaries, including Seniors, Education, and Tourism.
The revenue estimates stated above are projections based on historical game performance and are not a guarantee of revenue. Revenue may be less based on actual performance and is expected to decline over time. Total available monies for legislative appropriation from the State Lottery Fund will be reduced by an estimated 1.2M in FY 2026 and an estimated $1.6M in FY 2027. Estimated costs include 7% sales commissions, a 1% cashing bonus, base printing cost of approximately 1.72% of sales, vendor fees of 4.28% of sales, 63.5% of sales in prizes paid, and administrative and advertising costs of 7.95% of sales. There is no defined end to this legislation, and sales are expected to diminish in subsequent years due to game fatigue.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
N/A
Person submitting Fiscal Note: June Somerville
Email Address: jsomerville@wvlottery.com