What the new casino law really accomplishes
There has been much discussion since the regular session of the legislature concluded this past March about a law we passed giving racetrack casinos (“racinos”) a subsidy to modernize their equipment.
The law sets up a convoluted formula by which racinos may draw down money from the state to modernize their video lottery equipment.
The four tracks are allowed $10 million per year (total for the four) for 10 years and the entire amount is capped at $100 million.
The percentage of the total in each year for each racino is limited to the percentage of the total amount of money that track generates for the state.
The tracks must spend $2 of their own money for every $1 they draw down from this fund.
The money must be spent on brand new video lottery terminals. Unused amounts in each year may only be carried forward for a year.
There is a separate fund from which the Greenbrier Hotel casino may draw money for the same purpose. That money comes only from revenue generated by the Greenbrier. Also, the law allows the Greenbrier to have “simulcast” (televised) pari-mutual wagering on horse and dog races at any racetrack,West Virginia or otherwise.
I think this is a good idea.
It’s important to note that our local racino (Hollywood Casino at Charles Town Races) did not ask the legislature to pass this law.
Right before the legislature went into session this past January, officials from Hollywood-at-Charles Town met with all of the Eastern Panhandle delegation to give us their “wish list” for the year. This idea was not on it.
The request came from the two tracks in our state’s Northern Panhandle (Mountaineer Park, which has horse racing, and Wheeling Downs, a dog track).
These tracks are experiencing new and strong competition from Pennsylvania and Ohio. Without the boost they will get from this law they would be in danger of going out of business.
Those two tracks bring in close to $200 million in taxes for the state per year, plus millions more in local taxes.
Were they to go out of business the state would lose a lot more than $10 million per year.
And it’s quite likely that the amount the state ends up subsidizing the tracks will be considerably less than $10 million per year for 10 years.
Hollywood-at-Charles Town’s equipment is mostly state-of-the art, so it may not use all of its allotment. And Hollywood produces half of the total revenue from the four tracks, so its allotment is half of the total.
The two Northern Panhandle racinos bring in between them about 35 percent of the total for the four tracks.
Their annual limit from this fund will be $3.5 million, or $35 million total for the 10-year period.
So, we’re making available $3.5 million per year to save $200 million per year.
Even though those numbers make sense to me I was still reluctant to vote to create this fund. I voted for it because delegates from the Northern Panhandle persuaded me that doing so was critical to their economy.
Also, there is one additional provision in the law that I like. The $5 per bet limit on video lottery terminals was removed. I think this provision was antiquated.
No other state that allows casinos, racetrack or otherwise, has such a bet limit. I’m confident that removing it will mean more money made by our racinos and therefore more tax revenue generated by them.