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West Virginia Gambling Reform Advances

1 March 2011 by admin

west-virginiaIn an effort to bring more money to the casino operators in the U.S. state of West Virginia, lawmakers advanced legislation that would enable more money to be spent on and at the casinos. On a voice vote, the Senate Judiciary Committee passed the legislation last week, with the next step being the Senate Finance Committee.

The state’s race track casinos have been hurting for business due to the recession and competition from neighboring states. They see this legislation as necessary to stay competitive. There are several aspects of the gambling legislation that could help the gambling operators.

The first thing it does is allow players to bet larger amounts by eliminating maximum betting limits. Back in 1994, when slots were approved in West Virginia, the betting limit was $2. That limit was later changed to $5, which is still well below the industry standard. In most states, there is no betting limit at all. In nearby Maryland, the betting limit is $100. By removing the betting limit, as the bill proposes, casinos would be able to make more money off of high rollers.

On a similar note, the legislation would allow West Virginia gambling facilities to carry machines that take $50 and $100 bills. Current law restricts the slot machines and other games to accepting bills in denominations of $1, $5, $10 and $20. Not only does this reduce the amount that is spent at the casinos, it also causes them to spend more money to special order slot machines that are not common in the industry.

The most controversial aspect of the bill, though, has to do with revenue sharing. West Virginia, like other states, use a portion of gambling revenue to pay for things such as education and other publicly funded projects. The bill would allow the casinos to keep a larger portion of the revenue for themselves so they can upgrade their facilities. The casinos say this is necessary to compete with casinos in Pennsylvania, Maryland and Ohio.

The legislation would skim 2.5% of casino revenue and put it in a fund for the tracks. Part of that money would have already gone to the casinos, but more than half of it would have gone to the state budget. John Musgrave, the State Lottery Commissioner, says “to protect the state’s revenue stream that improvements need to be made.” Upgrades at the casinos are necessary to stay competitive with the competition on nearby states. In 2007, West Virginia casino revenue was at a high of $972 million, but that dropped significantly to $747 million last year.

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