West Virginia Online Gambling Bill 2017

With New Bill, West Virginia Joins Growing Number Of States Considering Online Gambling Regulation

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This week West Virginia became the seventh state to introduce legislation seeking to legalize and regulate online gambling in 2017.

This is West Virginia’s first online gaming bill. The legislation is surprising, but not wholly unexpected. West Virginia was selected as one of Online Poker Report’s “dark horse” states to pass an online gambling bill this year.

Inside H 3067

The bill, H 3067, sponsored by Delegate Shawn Fluharty,  would “authorize Internet gambling through managed and licensed through existing authorized gaming facilities in West Virginia.”

Per the bill:

“Developments in technology and recent legal decisions have created an opportunity to legalize interactive poker as a means to further enhance and complement the benefits delivered by casino gaming and licensed facilities to or for the benefit of the communities in which they operate;”

Along with Delegate Fluharty, the bill has four co-sponsors:

  1. Delegate Sean Hornbuckle
  2. Delegate Mike Pushkin
  3. Delegate Joseph Canestraro
  4. Delegate Mick Bates

H 3067 assigns licensing and regulation duties to the West Virginia Lottery Commission.

Licensing fees and taxation rates

  • Only current licensed gaming facilities and race tracks in West Virginia would be eligible for an internet gambling license. The licensing fee would be $50,000. The $50,000 licensing fee is low compared to the multi-million-dollar fees other states are proposing.
  • The tax rate is set at 14 percent of gross gaming revenue. This rate is in line with proposals in other states. It’s also close to the 15 percent rate set for New Jersey’s online casinos.

Baseline regulations established by bill

The bill charges the lottery commission with crafting specific regulations.

But the bill does include a number of baseline regulatory standards. Operators are required to:

  • Ensure “to a reasonable degree of certainty, that authorized participants are not less than twenty-one years of age.”
  • Verify that players are “physically located within this state or such other jurisdiction that is permissible under this chapter.”
  • Minimize problem gambling by putting responsible gaming protocols in place.
  • Provide fair and honest games.
  • Institute policies to deter and detect cheating and the use of software including bots.
  • Segregate player funds from operating funds.

Compacts, criminal penalties also in play

The bill allows the Commission to enter into interstate agreements. From the bill text:

“Authorized interactive gaming, once fully developed, will allow persons in this state to participate in interactive games, not only with other persons in this state, but with persons in other cooperating jurisdictions in the United States where interactive gaming has been authorized.”

The bill also prohibits unauthorized internet gambling. Criminal penalties are provided for unlicensed entities operating online gaming sites in the state:

  • A first offense would result in a misdemeanor charge and a $75,000 – $150,000 fine and/or up to one year in prison.
  • A second offense would be a felony and result in a $150,000 – $300,000 fine, and/or “imprisoned in a state correctional facility not less than one nor more than three years.”
  • Violators would also be responsible for taxes owed pursuant to the tax rate imposed on licensed operators.

West Virginia’s chances may be better than you think

As this is the state’s first crack at legalizing online gambling, it will take a while to flesh out where the legislature is on this issue.

However, West Virginia is a gaming state. There has been talk of online lottery and online gambling dating back several years.

In 2014, John Musgrave, West Virginia’s Lottery Director at the time, was exploring online lottery and online gaming according to the Charleston Daily Mail.

“We’re still exploring (online gaming) because we feel that’s the way the industry’s moving, so we want to plan for it,” Musgrave said, “We have not yet made any decision for how we’re going to implement it, but we are looking at it, studying it and seeing how our casinos in our jurisdiction can move in that direction.”

Current lottery director John Myers was also open to online gaming, telling the Charleston Gazette-Mail in July 2016, “There are certainly things we need to consider going forward. To stay competitive, we’ll have to consider these, as well.”

- Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus for OPR is the developing legal and legislative picture for regulated US online poker and gambling.
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