Cumberland Times-News

March 6, 2013

West Virginia casinos seeking break from taxes, racing

Lawmakers react to increasing competition for gambling dollars

LAWRENCE MESSINA
Associated Press

— CHARLESTON, W.Va. — As West Virginia faces growing competition for its gambling dollars, several lawmakers introduced a measure Wednesday that would slash the taxes and fees that West Virginia’s four racetrack-casinos pay by an estimated $14 million a year and allow them to scale back horse or greyhound racing.

And while the casinos aren’t seeking to end racing — West Virginia first legalized other forms of gambling at these sites to support the racing industry — they also don’t want to lose money as they face competition from neighboring venues, said John Cavacini, lobbyist and president of the state Racing Association.

“If a racetrack is losing money on racing, it has to consider a reduction of racing days and the viability of live racing,” Cavacini said Wednesday. “It’s purely an economical, business model concept of the operation.”

The state Senate’s measure would cut the annual fee that each casino now pays to host table games such as craps and roulette by more than half, from $2.5 million to $1 million. The fees benefit senior citizen programs, and the bill proposes offsetting the resulting annual $6 million revenue loss by dipping into the purse fund for race winners for that amount.

The state’s share of table game proceeds would drop from 35 percent of gross receipts to 25 percent. This tax on table games reaped $78.1 million during the last budget year, and the proposed rate change would have reduced that amount by $7.8 million.

The bill also pares down the minimum number of live racing days at all four tracks from 200 to 150.  Actual racing days ranged from 210 days at the Northern Panhandle’s Mountaineer Casino Racetrack & Resort to 311 days at the Mardi Gras Casino & Resort in Kanawha County in 2011, the latest year for which figures were available from the West Virginia Racing Commission.

Mountaineer and the Hollywood Casino at Charles Town Races in the Eastern Panhandle offer horse racing, while greyhounds race at Mardi Gras and Wheeling Island Casino & Resort in the Northern Panhandle.

The measure was sponsored by five Democratic senators, including two whose district includes the Northern Panhandle casinos.

Under the bill, each casino would set the number of races per day, a power now wielded by the Racing Commission.

Cavacini counted 14 competing gambling facilities that have opened in border states over the past five years. They include two full-blown racetrack casinos in Pittsburgh, slot machine rooms at seven Ohio racetracks and four stand-alone casinos.  Maryland, meanwhile, has allowed slot machines since 2010 and on Wednesday granted a license allowing its first casino to offer table games since voters approved that expansion in November.

All 14 venues cited by Cavacini are within 150 miles of the Northern Panhandle’s two tracks, he said.

“These monies would be used for marketing, promotions, giveaways, incentives for people to come to the (casinos),” Cavacini said. “They would be pure marketing dollars to try to win back the customers we have lost.”

Mountaineer is owned by MTR Gaming, which also operates several of the competing Ohio gambling sites. The Hollywood Casino is part of Penn National Gaming, which also includes competitors in Ohio and Pennsylvania.

A majority of gamblers at West Virginia’s casinos hail from other states. Even Mardi Gras, which unlike the other sites is not in a border county, still relies on out-of-state gamblers for two-thirds of its patrons. But figures presented earlier this week by the Lottery Commission, which oversees all casino gambling except race wagering, shows that the in-state share of gamblers is creeping upward in at least two of the casinos.

Cavacini cited how the casinos provided $430 million in revenues to state, county and municipal government during the last budget year despite economic woes, and employ 4,000 people on the non-racing side of their operations.

“We want to maintain that revenue stream, and keep those people working. That’s the goal,” Cavacini said.

Groups representing racing workers at the state’s horse tracks did not respond to re-quests for comment Wednesday.