|Date Requested: March 06, 2017
Time Requested: 02:35 PM
|Racing Commission, WV
State Excess Lottery Revenue Fund
Sources of Revenue:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
SB437 defunds and decouples Greyhound Racing resulting in an increase of revenues to the State by redirecting funds previously directed to Greyhound Racing to the State Excess Lottery Fund for appropriation by the State Legislature. The bill also eliminates the requirement for current Greyhound Racing licensees to obtain any licensure from the State to conduct wagering on simulcast races and therefore decreases and eliminates all revenues currently received by the State for that activity.
Fiscal Note Detail
|Effect of Proposal
|1. Estmated Total Cost
|Repairs and Alterations
|2. Estimated Total Revenues
Explanation of above estimates (including long-range effect):
The above estimated total revenues were compiled as follows:
$10,797,425 in new money to State Excess Lottery Fund
$4,243,611 freed up in appropriated money.
$10,797,425= $7.5M [Greyhound Purses] +$3.3M [Development Fund]
$4,243,611= Purses + $100,000 [10-10-10 money]
Estimated Total Revenues: $15,041,036
As a result of the elimination of a licensure requirement for and all regulation of simulcast wagering at the facilities currently holding Greyhound Racing licenses issued by the Racing Commission, the State would no longer receive any revenue from this activity. Therefore, the State share for this activity projected to be $450,000 would lost revenue to the Racing Commission.
Senate Bill 437 essentially defunds greyhound racing in the state of West Virginia and allows greyhound tracks to maintain a video lottery license without the necessity of a racing license. However, the bill does not officially end the practice of greyhound racing nor does it end the state’s requirement to regulate greyhound racing. Furthermore, the bill does not modify the required number of race days for a track to maintain simulcasting rights (§19-23-12b).
Requiring the WV Racing Commission to continue to regulate greyhound racing would place an undue financial hardship on the Commission. The Commission currently expends approximately $775,000 annually to regulate greyhound racing and there would be very little revenue associated with the activity to cover this cost. Additionally, revenues associated with greyhound racing assist the Commission in the regulation of thoroughbred racing as thoroughbred racing does not generate sufficient levels of revenue to cover the cost of regulation. As such, the Racing Commission would likely be out of funds within 1 fiscal year. With a cessation of greyhound racing, which would likely be the result of SB437, the Racing Commission would operate at an annual deficit of approximately $1,500,000. It would likely require an appropriation from the Legislature or increased tax on the thoroughbred industry to continue operations.
Should greyhound racing be discontinued, an additional $375,385 would also be available by discontinuing capital improvements reimbursement available to the greyhound tracks as this would no longer be necessary (§19-23-13c(b)(3)(A).
Also, the bill contains a proposed amendment that allows the facilities that were formerly required to have a racing license and conducted live greyhound racing, to not hold a racing license to receive simulcasts of races and to take bets thereon. This means that Wheeling Island and Mardi Gras can operate off-track betting facilities without a license from the Racing Commission or any other agency of the State.
This amendment is located in West Virginia Code § 29-22A-7(a)(1), which is a Racetrack Video Lottery statute contained in the Lottery Act. The “racing license” required in the Racetrack Video Lottery statutes and the Racetrack Table Games statutes, as a predicate to conducting slots and table games, is a racing license issued by the Racing Commission to conduct live racing at a functional “racetrack.” The Racetrack Video Lottery and Racetrack Table Games statutes, in their current form, are silent about simulcast racing and do not predicate the operation of slots and table games on a racing license that allows the conduct of simulcast racing and off-track betting.
The proposed amendment eliminates any requirement that the affected entities have any license from any agency of the State to conduct simulcast racing and off-track betting thereon. Under the bill, Wheeling Island and Mardi Gras can cease all live greyhound racing, and therefore refrain from requesting a racing license from the Racing Commission – yet continue to conduct simulcast racing and take off-track wagers without any license, regulation or revenue to the State from that activity. Upon information and belief, there is no state in the United States that allows off-track betting facilities to operate in their borders without state licensure and regulation.
Under current law, the racing licenses that the Racing Commission grants allows the recipients to conduct live racing and to conduct simulcast racing. See §§ 19-23-1(a), 19-23-7(a) and 19-23-12b. The Horse and Dog Racing Act does not provide for the issuance of separate licenses for each of these activities. Accordingly, once the recipient obtains a license to conduct live racing, it is also authorized to conduct simulcast racing and take bets thereon.
The only entity under the Horse and Dog Racing Act that is authorized to be granted licensure from the Racing Commission to conduct an off-track betting facility – without any live racing – is the Greenbrier. West Virginia Code § 19-23-12d authorizes simulcast racing and wagering thereon for that historic hotel resort and creates a specific license that may be granted by the Racing Commission for that activity. West Virginia Code § 19-23-12d, in its current form, would not allow Wheeling Island and Mardi Gras to qualify for this specific, simulcast-limited license.
Without statutory requirements for the former live greyhound racetracks to apply and obtain a simulcast racing license, they will be able to operate unregulated and without remitting revenue to the State for the simulcast wagering activity. The state share of simulcast wagering in calendar year 2016 was $200,000.00 at Wheeling Island and $243,000.00 at Mardi Gras. This revenue will be lost to the State under the proposed amendments in this legislation.
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