Done Deal: West Virginia Legalizes Sports Betting Pending US Supreme Court Decision

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WV sports betting law 2018

Sports betting is legal in West Virginia — at least if the federal ban outside of Nevada is deemed unconstitutional.

As anticipated, the WV Sports Lottery Wagering Act is becoming law. Gov. Jim Justice did not sign the bill, but it will become law on Friday without his signature, according to a release from his office.

The House and Senate each scrutinized the measure in recent weeks before passing it with relative ease.

Justice did not veto the bill despite a public call to do so from the commissioner of Major League Baseball. He may, however, call a special session to revisit the legislation once the US Supreme Court makes its move.

In passing a sports betting law, West Virginia becomes the sixth state to do so in recent years and the first in 2018.

From the WV governor…

Justice delivered a press release on Friday night, which included these quotes:

“After the U.S. Supreme Court issues its decision on sports wagering, to address any provisions of the legislation that might be in conflict, I will ask the Legislature to look at the advantages of partnering with the major sports leagues,” Gov. Justice said. “I believe there could be real value to this partnership. I expect the Supreme Court to rule on this issue in the next few months.

“This approach will allow us to develop a relationship with all the major sports leagues so that it is beneficial to everyone.”

Gov. Justice went on to say that “if there are issues that we can address” to make this “model legislation that the entire country can use and duplicate, we should do so. Again, nothing can happen until the Supreme Court issues their decision, but we want to be ready when they do.”

The mention of the leagues appears to be a direct response to Major League Baseball commissioner Rob Manfred asking him to veto it. It seems to have made some impact on Justice, but it’s unclear if the full legislature will be willing to go back and make changes now that the measure is fully passed.

Both leagues released statements following the news: MLB statement | NBA statement

WV sports betting becomes law

The bill reaches the finish line less than six weeks after it was first introduced in the Senate. That’s pretty quick for a bill of this magnitude, and it speaks to the efforts lawmakers have put into the issue over the past year.

The first WV sports betting bill popped up in March 2017, and legislators have been exploring the topic since. One 2017 bill turned into three within the first month of 2018. The one that ultimately passed (S 415) was submitted at the behest of the Lottery Commission, and it was the culmination of a year of research and discussion.

The law permits the state’s five gaming facilities to offer sports betting under the lottery’s oversight. They’ll each pay $100,000 for the right to do so, and they’re expected to generate at least $5 million in total first-year tax revenue.

Despite substantial support from the majority of lawmakers, there were a few loud voices of opposition. Some presented arguments on the dangers of mobile wagering or betting on collegiate and minor-league games. Others contended that the state constitution requires a voter referendum to legalize sports betting.

The sports leagues were the loudest opponents, though, with the NBA and MLB actively lobbying in the statehouse. In the very moment the House was debating the bill last week, Manfred was on a conference call with local media pushing for a veto.

Why did sports leagues want a veto?

West Virginia’s new sports betting law shuts out MLB and other sports leagues from the integrity fee they’re seeking.

Leagues have offered their support for some sports betting legislation, but only if they’re included in the action. They argue that they should receive one percent of all money wagered as compensation for the power of their brands in a widespread, regulated industry. League lawyers have referred to it as both an “integrity fee” and a “royalty fee.”

Lobbyists pitched those fees to WV lawmakers, but there was significant pushback in both chambers. The House, in particular, struggled to find justification to cut the leagues in. The demands never found their way into S 415, so the leagues remained opposed until the bitter end.

Losing the battle for WV could prove critical, as the leagues could struggle to gain traction elsewhere.

A Pennsylvania sports betting law already passed without including integrity fees, and New York and Connecticut have both pushed back in their own efforts. It’d be hard to argue that their constituents should pay for something that West Virginians do not, especially when those fees are not going to state coffers.

Just waiting for SCOTUS now

Although it has a law on the books, federal prohibitions prevent West Virginia from allowing sports betting right now. The act known as PASPA preempts state law and prohibits expansion of the industry outside of Nevada sports betting.

New Jersey is trying to change that, asking the US Supreme Court to take another look at PASPA. The court’s upcoming ruling will shape the future of legal sports betting in the US.

As with other states, West Virginia’s law contains an activation clause that keeps it dormant until there is movement at the federal level. That would need to come either via the court or an effort in Congress.

Most experts are predicting a victory for New Jersey, and the speculation has led nearly 20 other states to consider sports betting bills. Six of them are out in front of the pack with bills that have already been signed into law.

Here are the states currently waiting on the Supreme Court, although there’s more legislative work to be done in a couple of them: