Justice Denied Means Justice Served: West Virginia Sports Betting Still On Track

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WV sports betting Jim Justice

Prospective sports betting operators in West Virginia weathered a healthy scare last week.

The WV Gazette reported that Gov. Jim Justice and his top aide are trying to delay the September launch of WV sports betting. In the eleventh hour, the governor’s office is still working to add regulatory language that would benefit professional sports leagues.

Those efforts, which date back months, have not materialized.

On Monday, the WV Lottery published its proposed rules for sports betting under a notice of public comment. The start of the 30-day discussion period sends a clear signal that the train is moving forward on schedule:

This rule is required in order to put regulatory requirements in place necessary for licensing, security, IT systems, and overall implementation of the WV Lottery Sports Wagering Act.

This new filing comes two days before the Wednesday deadline for submission. As of last week, sports betting applications are available to the state’s five potential licensees.

One last push from sports leagues?

You might recall an odd situation following the passage of the WV sports betting law in March.

Immediately after the law passed without his signature, the governor urged lawmakers to reconsider their work and “the advantages of partnering with the major sports leagues.” West Virginia was one of the first states in which leagues lobbied for data rights and integrity fees.

The governor’s conflict of interest is hard to ignore. Justice owns The Greenbrier, which hosts events for the PGA Tour. The Greenbrier also hosts training camp for the Houston Texans of the NFL and previously has done so for the NBA’s New Orleans Pelicans.

Working out of their pockets, the governor attempted to sidestep the process and broker a deal between leagues and operators, either legislatively or commercially.

Months later, the issue still was festering beneath the surface. Here’s more from the Gazette:

Casino industry representatives are concerned that acting governor on deck Bray Cary is trying to force the Lottery Commission to miss upcoming deadlines for the emergency rules on sports betting that were filed back on July 9.

They believe that Cary, presumably at the behest of Justice, is trying to go back and insert language into the rules to require the state’s casinos to contract with the professional sports leagues to buy “official league data” for their games.

It sounds like a bit of attempted strong-arming (or at least stalling) from the executive branch. Legislators were nearly unanimous in their rejection of league requests during the lawmaking process.

“They’re trying to get that fee put in or let the emergency rule die,” said John Cavacini, president of the West Virginia Gaming and Racing Association.

WV Lottery slams the door again

Folks on both side of the WV issue are interested in setting a precedent for the US sports betting industry.

Lawmakers and regulators are on the same page, having worked successfully to craft an operator-friendly blueprint for others to follow. Statehouses across the country subsequently cited WV law in their own hearings.

The leagues, on the other hand, hoped their lobbying efforts and relationship with the governor would lead to a precedent-setting inclusion of fees or control over data and bet types.

Here’s more from Cavacini, speaking with Gambling Compliance (paywall) last week:

This all had to do with West Virginia not including an integrity fee. Leagues were scared that other states across the country would follow us — and they did.

The precedent has been set, and it is not favorable for the leagues. New Jersey and Rhode Island both legalized sports betting after West Virginia did, and neither of those laws include an integrity fee.

WV regulators had until Wednesday to file their proposed rules with the Secretary of State, which they did. Had they missed the deadline, the emergency rules would have expired and sports betting would have returned to legislators next year.

Despite another scare, WV sports betting is still on track to go live by September 1.

Proposed WV sports betting rules in place

There’s not much new to report here. The proposed regulations are identical to the emergency regulations filed in July.

The state’s five casinos can now submit their sports betting license applications at a cost of $100,000 apiece. If approved, they’ll pay 10 percent of their revenue in taxes. The lottery expects to collect $5.5 million from sports betting operations during the 2019 fiscal year.

The law allows sports betting both on-site, and across online and mobile channels. Each operator can offer up to three individually branded online platforms (or “skins”). So far, only one casino has made its plans public.

FanDuel has partnered with The Greenbrier to offer retail and mobile sports betting under the property’s casino license. The first FanDuel Sportsbook opened last month in NJ and the group has a deal-in-waiting for NY sports betting at Tioga Downs, too. West Virginia likely will be its third launch state.

In a recent press release, William Hill US also divulged negotiations with a WV casino, though the suitor’s identity remains a mystery for now.

Speaking with MetroNews, WV Lottery Managing Counsel Danielle Boyd said Hollywood Casino likely will be the first property to open a sportsbook. Regulators plan to begin testing Hollywood’s systems during the last week in August.