Lottery officials in West Virginia will support bills to expand Keno offerings and permit limited video lottery (LVL) distributors to operate retail locations. Casino-style online gambling, however, appears to be off the table for now.

Speaking before the House Finance Committee last week, WV Lottery Director John Myers indicated that his agency wants to reconsider the issue at a later date.

“We certainly see the opportunity in iGaming,” Myers said. “We fully intend to come back with that at some point.”

Reluctance to expand may stem partially from the success of the existing program. According to the Charleston Gazette-Mail, lottery revenue exceeded projections by more than $25 million in 2018.

Online gambling in a holding pattern

Five Democrats filed H 2178 for 2019, with Delegate Shawn Fluharty acting as the primary sponsor. His proposed legislation has now appeared in each of the last three sessions.

The bill would authorize the state’s licensed casinos to offer online gambling under the oversight of the WV Lottery. A $50,000 licensing fee would be coupled with a 14 percent tax rate on gross gaming revenue.

Recommended taxes and fees stand in stark contrast to those next door in Pennsylvania. Each PA online casino operator paid up to $12 million to secure an interactive gaming permit. Online slot revenue is taxed at a rate of 54 percent, while revenue from PA online poker and table games is taxed at 16 percent.

That WV online gambling bill sounds like a nonstarter for the Lottery this year, but it may not be the end of the discussion. Online Poker Report understands that a separate legislative effort could materialize with support from the committee chair.

Some expanded WV gaming on the way

While efforts to legalize online gambling appear to be on hold, the Lottery will push the two other pieces of gaming legislation forward.

As it stands today, WV Lottery players can cash winning Keno tickets at any retailer. Customers can only buy tickets, however, at bars and clubs licensed by the Alcohol Beverage Control Administration.

Under H 2184, introduced by Delegate Steve Westfall, the language would change to allow the purchase of Keno tickets at additional locations, including convenience stores.

The WV Lottery also intends to back H 2191, introduced by Westfall and Delegate Paul Espinosa.

That bill would allow LVL distributors to act as retailers, which Myers says would help keep marginally performing outlets viable. Under the existing framework, distributors and retailers share 50 percent of LVL profits. The Lottery retains the other half.

“By splitting that,” Myers said, “it makes it more difficult to make those marginal locations work.”

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Why wait on online gambling?

West Virginia regulators are still working to get sports betting apps up and running for all five casinos. Only then, Myers said, can the agency’s focus shift to other forms of online gaming.

To be fair, a measured approach to expansion may not be the worst idea for WV regulators, who seem to be operating at capacity.

Following the abrupt resignation of Alan Larrick late last year, Myers took over as the Lottery’s new director. That role, of course, comes with a steep learning curve. The agency also lost its managing general counsel along the way, removing two seasoned regulators from the equation.

The implementation of WV sports betting seems to have suffered amid the tumult.

So far, only two casinos — Wheeling Island and Mardi Gras — have launched online/mobile sports betting platforms. Hollywood Casino, Mountaineer and The Greenbrier have all opened their retail sportsbooks, but each is still working through the approval process for their app(s).

The latter will carry the license for FanDuel Sportsbook in WV, incidentally.