FISCAL NOTE
Date Requested: March 05, 2025
Time Requested: 12:35 PM |
| Agency: |
Lottery Commission, WV |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3636 |
Introduced |
HB3155 |
|
|---|
| CBD Subject: |
Legal Gaming |
|---|
|
FUND(S):
State Excess Lottery Revenue Fund
Sources of Revenue:
Special Fund
Legislation creates:
Decreases Existing Revenue
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.
Complete FY2025 data is not yet available. This analysis is based on FY2024 data to provide an estimate of the financial impact of the $100 permit renewal fee in HB3155.
(A) Baseline – FY2024 Permit Renewal Fees Under Previous Requirements
In FY2024, the Lottery processed 8,986 permit renewals. Prior to HB3044, each permit renewal fee was $1,000, meaning the Lottery would have collected a total of:
• 8,986 permits @ $1,000/each = $8,986,000.00
(B) Impact of HB3044 (2023) – $500 Permit Renewal Fee for Certain Permits
HB3044 required an analysis of software performance based on net terminal income per day. Terminals operating on software above the bottom 10% (excluding those played for fewer than 60 days) were eligible for a $500 permit renewal fee.
Impact of HB3044 applying data using FY2024:
• 8,986 total permits
o 8,054 permits at a discounted renewal fee of $500 → $4,027,000.00
o 932 permits at the full renewal fee of $1,000 → $932,000.00
o Total collected → $4,959,000.00
o Revenue loss compared to the original $1,000/permit structure → $4,027,000.00 ($8,986,000 - $4,959,000)
(C) Projected Impact of HB3155 – $100 Permit Renewal Fee for Certain Permits
If HB3155 had been in effect, applying the proposed $100 discounted renewal fee to FY2024 data would not have expanded the pool of eligible discounted permits beyond those identified under HB3044. Therefore, it can be assumed the same 8,054 permits would receive the new discounted renewal fee:
• 8,986 total permits
o 8,054 permits at a discounted renewal fee of $100 → $805,400.00
o 932 permits at the full renewal fee of $1,000 → $932,000.00
o Total collected → $1,737,400.00
o Additional revenue loss compared to the $500 permit renewal fee model → $3,221,600.00 ($4,959,000 - $1,737,400)
(D) Summary of Financial Impact
1. Under the original $1,000/permit model → $8,986,000.00 in revenue
2. With a $500 permit renewal fee (HB3044 – using FY2024 data) → $4,959,000.00 in revenue ($4,027,000 annual loss)
3. With a $100 permit renewal fee (HB3155 projection -using FY2024 data) → $1,737,400.00 in revenue ($7,248,600 annual loss)
4. Over a 10-year permit period, the proposed change under HB3155 would decrease the revenue available for appropriations from the Excess Lottery Fund by approximately $32,216,000.00
5. Over a 10-year permit period, the proposed change under HB3044 & HB3155 would decrease revenue available for appropriation from the Excess Lottery Fund by approximately $72,486,00.00
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 |
0 |
0 |
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.
N/A
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.
Concerns & Clarifications Needed:
• HB3044 & HB3155 are extremely time-consuming and complex for Lottery staff to calculate. The methodology for determining eligible discounted renewal fees requires a detailed review of net terminal income and software classifications, significantly increasing administrative burdens.
• The term "like-kind" is referenced multiple times in HB3155 (lines 7, 11, 13, & 27) but lacks a clear definition. Without clarification, this could impact the way permit fees are calculated and potentially expand the number of terminals eligible for discounted renewal fees.
• Changes in wording related to "like-kind" could increase the number of terminals eligible for the reduced permit fee, further amplifying the financial impact on the state. Additional analysis is needed to determine the potential revenue loss if broader eligibility criteria are applied.
Person submitting Fiscal Note: June Somerville
Email Address: jsomerville@wvlottery.com