WV Lawmakers at Odds with State Lottery Over Rumored Iintegrity Fees
West Virginia legislators have asked the interim Lottery Commissioner about the agency as it deliberates long-term regulations for sports gambling.
Joint Senate Finance Committee Meeting
The acting Lottery Commissioner, Doug Buffington, was posed questions on the status of the general counsel, the leadership of the Lottery, and if he understands that legislators will not have anything to do with imposing a financial arrangement between casinos and sports leagues. Buffington was invited to speak to the Joint Senate Finance Committee Monday morning due to apprehensions about how the executive branch is putting into place the rules for sports gambling at the state’s five casinos.
Senate Finance Chairman Craig Blair (R-Berkely), said in an article in The Dominion Post,
“There are a lot of rumors floating around. The rumors are still there. Some of them I know the answers to on what’s going on, and it’s just disturbing the hell out of me right now.”
Sports Betting Integrity Fees
WV legislators have been insistent that they won’t allow “integrity fees.” These are fees the sports leagues want in exchange for providing the sportsbooks with official stats that will be used for in-game betting. The integrity fees would pay for those stats and help leagues pay for additional measures to protect the integrity of their games. The price for the official stats would be determined by the state Lottery.
Of these integrity fees, several of the WV lawmakers are concerned that the Lottery was considering them. Delegate Paul Espinosa, (R-Jefferson), at the meeting Monday, said,
“The Legislature clearly chose not to include integrity fees in the authorizing legislation or some of the other provisions you’ve mentioned with the leagues.”
Since then, however, it appears the administration has grown more willing to consider these fees, which started during a May closed-door meeting of casino operators, state regulators, and representatives of pro sports leagues.
Epinosa went on to ask,
“Has the governor’s office directed you to make substantive changes to the rules currently governing sports wagering in West Virginia?”
“No, they have not. We’re not at the point where a decision has been made on any of these things.”
The state had to file emergency rules in order to get casino operators up and running with sports betting before the start of fall football season. Now the regulators are working to develop long-term legislative rules, which would dictate how sports betting will be governed from now on.
And all of this is taking place without the Lottery’s general counsel or director.
General Counsel Gone, Director Replaced
On September 1, Lottery Director Alan Larrick resigned, the day before sports gambling had its official opening at Hollywood Casino. No explanations were given for the timing or the reasons for his resignation.
Danielle Boyd, the agency’s expert on sports betting and its general counsel, was forced out by the Justice administration. Legislators asked Buffington about all of these issues under oath during his presentation to the committee. Buffington said he’s unaware of why Mr. Larrick stepped down, he was simply asked to step in once that happened.
Buffington was also asked about Danielle Boyd, if she was still at Lottery or if she had left. Buffinton indicated she was still employed by the Lottery but was not available for the discussion today and “we are looking at concerns.”
There was frustration at the meeting over the fact that the top people who worked with lawmakers on the sports gambling bill are no longer around the Lottery.
More on Integrity Fees in WV
Regarding integrity fees, Buffington said that paying sports leagues for stats based on official data isn’t the same as an integrity fee.
“I’m working diligently to understand the consequences. The comments made really refer to official data, rather than integrity fees.”
After the committee hearing, president of the West Virginia Gaming and Racing Association, John Cavacini, said that what the pro leagues are asking for is quite like what the Legislature rejected months ago.
“Most of the issues that are in those comments are ones that we would have a very hard time activating as a part of the sports betting program. So really what we have is a rehash of what we did in January as it relates to the discussions on sports betting. It’s nothing new. It’s the same language. It’s a money grab by major league sports.”
It should also be noted that colleges like Marshall and West Virginia have also pushed for integrity fees.
Governor Justice and The Greenbrier
When West Virginia legislators passed the sports betting bill into law, it was done so without Governor Justice’s signature. He did this to avoid any consideration of bias, since his family owns The Greenbrier Resort, which has a casino. The Greenbrier also hosts off-season practices by NBA and NFL teams, and The Greenbrier Classic PGA event.
After the joint committee meeting Monday, Craig Blair said there should be a message sent that rewriting government rules to make casinos enter contractual agreements with the pro sports leagues wouldn’t be good for future investors in West Virginia. He said that message should go
“to anybody who’s listening down in the governor’s office.”
To reporters after the hearing, Blair elaborated:
“I keep feeling like this is coming out of the Governor’s Office. And the governor did not sign Senate Bill 415 because of a conflict of interest because he owns The Greenbrier. I get that. I respect that. Why would you be so concerned about the other casinos doing this? If it’s a good business model, then do it.”
Closing thoughts on WV and Integrity Fees
Whether they like it or not, the rest of the nation is watching West Virginia’s battle over integrity fees or any other paid service to professional leagues and colleges. This original battle was put to rest back in the early summer, but now it appears that there are forces behind closed doors trying to push a “fee” into the sports betting regulations once again. One can only speculate as to who the driving force is behind some sort of “fee.” However, it’s not hard to imagine that the Governor’s office is once again trying to get these fees included just as he tried back in May. Stay tuned to this story as it could have a major impact on the burgeoning sports betting landscape.
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