WV Lottery Commission Approves Permanent Sports Betting Rules
A few days ago, The West Virginia Lottery Commission finally approved the permanent rules for legal sports betting in the state. Not surprisingly, the Commission rejected all of the proposals put forward by pro sports leagues; in particular, the one asking for an integrity fee.
The Commission had a meeting on October 3rd, where the members reviewed and voted on 18 different proposed changes and comments to the temporary rules which had been set in the spring. The Commission voted down all of the seven proposals from the sports leagues.
Sports Betting in West Virginia
After the Supreme Court decision in May to overturn the federal ban on sports betting outside of a few states, including Nevada, West Virginia legislators set up a temporary framework so that operators could start offering legal sports betting. It is expected that mobile betting will also be available soon.
The first legal sportsbook was launched at Hollywood Casino in Charles Town at the end of August. Just a couple of weeks later The Greenbrier, which is owned by the Governor’s family, followed suit.
Gov. Jim Justice did not sign the sports betting bill because he wanted to avoid the appearance of a conflict of interest.
Right now, just the Hollywood Casino and The Greenbrier have operating sportsbooks but Wheeling Island Hotel Casino Racetrack and Mardi Gras Casino are expected to launch their own sports betting operations within the next few weeks.
Professional Sports Leagues and Integrity Fees
Major sports leagues in the U.S. have been trying to get a cut of the action on sports betting since individual states were given the ability to legalize. The PGA Tour, NHL, and MLB all want integrity fees that they say will help protect the integrity of the sport.
All of the pro sports leagues were against legalizing sports betting, but now that sports gambling is going to happen in an increasing number of states, they are asking for money from the sports betting operators. They say that the operators shouldn’t be able to profit from the intellectual property of the leagues without paying for it.
The MLB and NBA want a percentage of all bets placed on their events. That, of course, would be a huge amount of money over time. The leagues have been doing a lot of lobbying to try to convince individual states to write in a provision for integrity fees, but so far have been unsuccessful in their efforts.
Lobbying in West Virginia
The sports leagues NBA, MLB, and the PGA Tour sent a letter to West Virginia’s Lottery Commission, stating:
“If the Sports Wagering Rule does not include strong and reasonable integrity protections the leagues are seeking, legalized sports gambling in West Virginia will deprive the leagues of important tools to detect and prevent manipulation and corruption.”
Within the letter, the leagues suggested an amended, tiered system for the integrity fee: one would be based on the outcome-type bets that utilize public information. The second tier would be only for live betting that could only be carried out using official league data. The second tier would also include an integrity fee in return for the operators having access to official data. The leagues asked for one percent of turnover.
Chairman of the Senate Finance Committee, Craig Blair (R-Berkeley) has been opposed to the idea of integrity fees since the beginning. He said (of the leagues):
“They weren’t getting a cut when the bookies were doing it and when it was offshore. And they’re not getting it now. And as long as I’m the Senate Finance chairman, it’s not going to happen.”
In May, Governor Justice wanted a deal between the sports leagues and the casino operators and appeared to be in favor of integrity fees. The casino operators, however, had no interest in striking such a deal that would be enforced by the state.
Controversy Within the WV Lottery Commission
The day before the debut of sports betting in WV casinos, the Lottery Director Alan Larrick announced his resignation, effective the following day. Doug Buffington, who is the deputy secretary for the WV Secretary of Revenue, was appointed to serve as acting Lottery director.
Another key member of the Lottery, Danielle Boyd who is general counsel, has disappeared as well. When asked where she was, Buffington said she was still employed there but not available. She was placed on indefinite suspension shortly after Larrick’s regulation, with no explanation given to the public.
There were concerns raised that the two people most informed on the topic of sports betting in West Virginia suddenly left the scene.
On September 18, Gov. Justice appointed John Myers as the new Director of the West Virgnia Lottery.
WV Lottery Commission’s Permanent Regulations
The Lottery Commission said it feels that integrity fees should be agreed upon between operators and the leagues, if desired by both sides:
“The Lottery declines to intervene between negotiations between private business entities.”
As for the rest of the regulations, the Lottery kept the temporary framework essentially the same, but approved two changes: users will be allowed to use the sportsbook app to check their accounts, but not bet, while in another state. Users will be able to place bets on mobile devices while in the state of West Virginia, once mobile betting has launched.
In the presentation before the vote this week, John Myers discussed integrity; he said that integrity has always been built into the regulator’s policies and it gives confidence to the players.
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