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West Virginia was the first state to pass a law to legalize sports betting in 2018 and the fourth outside of Nevada to launch a state-regulated industry. WV sports betting kicked off at Hollywood Casino at the tail end of August, and The Greenbrier recently opened its FanDuel Sportsbook, too.
Despite a smooth and profitable start, some troubling regulatory developments are stirring beneath the surface.
Alan Larrick, the former director of the WV Lottery Commission, departed suddenly and without explanation just two days after the soft-launch at Hollywood. More recently, it’s become apparent that managing general counsel Danielle Boyd is also missing from her post.
Acting Director Doug Buffington had the chance to provide updates before the Joint Standing Committee on Finance on Monday, and his testimony did not go over well with some lawmakers.
A bit of context is in order to set the stage for the hearing. The WV Lottery, which regulates sports betting in the state, published emergency rules for the industry last month. The 30-day period for public comment has closed.
WV MetroNews reporter Brad McElhinny obtained the comments via a freedom-of-information request, uncovering brief letters from two of the state’s five casinos.
Then there’s an eight-page letter from Jeremy Kudon, a lobbyist for the New York law firm that represents several professional sports leagues. On behalf of the NBA, MLB and PGA Tour, Kudon asked once more for adoption of the leagues’ model framework.
Most notably, the alliance continues to push for the power to collect fees from operators. Under proposed amendments, operators would be required to license official league data to settle all in-play bets and those that involve “advanced data.” The leagues also want discretion over the types of bets allowed, as well as enhanced regulations regarding the sharing of information.
Despite diligent lobbying for these inclusions, lawmakers in WV and elsewhere have turned them aside at each opportunity.
Not everyone involved in the process is opposed to the proposals, however. The leagues appear to have some friends in high places in the Mountain State.
Citing a conflict of interest, Gov. Jim Justice refused to sign the bill that made WV sports betting law in March. The Justice family owns The Greenbrier, which, in addition to offering sports betting, hosts several league events. The PGA Tour holds an annual tournament at the property’s golf course, for example.
The governor’s recusal seems appropriate in that context, but the lingering conflict has deeper roots.
Larry Puccio, who led the governor’s transition team, has since taken up a legal role for the resort. He also happens to be registered as a lobbyist for the three leagues that submitted comment.
And then there’s Bray Cary, the governor’s right-hand man and presumed heir to the throne. Following passage of the law, Cary orchestrated a meeting between leagues and operators in an attempt to hammer out a commercial arrangement. Justice reportedly dialed into that meeting to urge the casinos to cooperate.
Buffington is in an unenviable position, having been pulled into his role just as the WV Lottery began regulating a new industry. As such, he only has a cursory knowledge of WV sports betting so far.
“I’m dedicating as many resources as I can,” Buffington said, “to bring me up to speed and understand the comments that have been provided.” Although not on trial, the questions from the committee grew increasingly antagonistic.
Del. Paul Espinosa started with the proposed rule changes, and Buffington indicated he had not yet formed his opinions. He testified that has not met with the leagues, nor been directed by the governor’s office to make any changes.
Here’s the follow-up question from Espinosa, getting somewhat parental:
Would you tell the committee if you think forcing committees to enter into any of those types of agreements — whether it be integrity fees, contracts, paying amounts of money for the use of logos or anything else — whether you believe that that represents a substantive change in the emergency rules, and whether you think that would be in the scope of the authorizing legislation?
Once again, Buffington didn’t have a comprehensive answer, citing his newness to the role.
“I sense no support in the legislature for requiring that,” Espinosa cautioned. “And I certainly would hope that the commission will think long and hard before implementing any changes in those emergency rules that would, in effect, require our casinos to enter into those arrangements.”
Buffington’s partial insights clearly began to gnaw at some of the lawmakers gathered for the hearing.
Sen. Corey Palumbo tried to address the personnel changes and the lack of information from the current staff. Like any good investigator, the senator seemed to know the answers before he asked the questions. Here’s his opener:
“Is there anyone who can speak just generally to what’s going at the lottery? While we’re trying to roll out sports betting, the lottery director is gone. I’ve not seen in here the longtime general counsel. I don’t know if the general counsel is still around or gone.
But it seems like it’s another agency that may be in dysfunction. Can anyone sort of let us know, generally, what’s going on there?”
“I’m not trying to dodge your question,” Buffington began with a chuckle, indicating no knowledge of the reason behind Larrick’s departure. That was only half of the question, though.
Palumbo tried again, asking about the general counsel: “Also, is Danielle Boyd still at the lottery, or is she gone, as well?”
“Danielle Boyd still works for the lottery,” Buffington replied.
That answer did not sit well with Sen. Craig Blair, who chairs the Senate committee. “Tell us what the employment status is right now of Danielle Boyd,” he demanded.
“She’s still an employee of the lottery,” Buffington answered.
“She’s still an employee?”
“Is she suspended in any way or anything like that?” Blair tried harder, some annoyance creeping into his voice. “Somebody knows, because I do.”
Buffington searched for the right words. “I have to be leery of answering HR personnel issues for fear of doing disservice to Ms. Boyd,” he said. “She is currently an employee. She is not available today. We are looking at concerns, but nothing has formally been decided.”
According to McElhinny’s reporting, lawmakers believe Boyd was driven from her position by the Justice administration.
Blair was wholly unsatisfied:
“I just want on the record that I’m disturbed that everybody in the lottery that helped educate us in the legislature on what was going on [is] nowhere around.
“And I would also encourage one other thing, that nothing happens — you can do whatever, but you don’t do it until the legislature is back in session.”
The senator warned that it would be irresponsible to change the rules “in the middle of the game” before the legislature returns to session.
“Thank you for trying to answer my questions,” Blair finished with audible frustration. “It’s just disturbing the hell out of me right now that this is taking place the way it is.”