First step forward for WV online gambling bill

West Virginia Online Gambling Bill Clears First Committee Hurdle

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As one of the first states outside of Nevada to legalize sports betting, West Virginia is trying to build upon its unlikely reputation as a pioneer for gaming legislation.

A new bill that would legalize online gambling has cleared its first legislative checkpoint with ease. The House Judiciary Committee advanced a substitute for H 2934 during its scheduled hearing on Tuesday, sending it along to a second committee stop.

Things have historically come together quickly in WV, but time is already tight for passage. The legislature is only in session until March 9 this year.

What’s in the bill?

Del. Jason Barrett is the primary sponsor for the West Virginia Lottery Interactive Wagering Act, along with 10 cosponsors representing both sides of the aisle. Barrett recently told Online Poker Report to expect bipartisan support in both chambers.

The proposal would allow the state’s five casinos to offer full-scale online gambling — including online poker, slots, and table games. The WV Lottery Commission would administer the industry and issue operator licenses for $250,000 apiece.

Here’s more from Barrett:

“With our iGaming legislation, we seek once again to lead the charge by permitting traditional land-based casino gaming to be conducted via electronic devices. If passed, iGaming has the potential to bring millions of dollars in revenue to our state.”

The bill also establishes new criminal penalties for unauthorized online gambling operations within the state.

Proposed tax hike amendment fails

The bill, as initially written, proposed a 10-percent tax on WV online gambling revenue. The committee substitute up for consideration on Tuesday increased that to 15 percent, but the hike wasn’t enough for some lawmakers.

Citing the lottery privilege tax, Del. Tom Fast offered an amendment that would further increase the rate to 35 percent of revenue. “I think that’s bare-bones minimum,” Fast said, “so I would urge passage of the thirty-five percent.”

Del. Shawn Fluharty provided the primary opposition, questioning the motivations behind the amendment.

“I think the intent here is not about raising a tax that doesn’t exist,” Fluharty said. “This would have the effect of killing the legislation if we went to a 35-percent tax rate.” For comparison, Nevada taxes online gambling revenue at a rate of 6.75 percent, while New Jersey online gambling taxes top out at 15 percent.

Del. Moore Capito echoed Fluharty’s sentiments:

“If you see value in this legislation, and it’s something that you think puts West Virginia in a place where you want West Virginia to be, you’ll vote down the amendment. If you don’t like the bill, and you don’t like any of what’s in the bill, then you’ll probably want to vote for the amendment.

“Because if the amendment passes, this bill likely will not be functional. That decision’s up to you, and I leave it to you. But I think that’s the effect of the amendment, and I’m going to oppose [it].”

The tally is not recorded, as the amendment failed with a decisive verbal vote. The bill, however, advanced out of the committee with a similarly lopsided vote — and retaining the 15-percent tax rate.

What’s next for WV online gambling bill?

One amendment did pass, incidentally, a strike-and-insert removing language regarding moral turpitude for prospective licensees. The small change removes any doubt that operators like PokerStars would be welcomed into the marketplace.

The bill is scheduled to move to Finance next, where it should be greeted by another favorable audience of lawmakers. As one of the cosponsors and the chair of that committee, Del. Eric Householder may advance it directly onto the floor.

Should the full House eventually pass it, the Senate would need to do the same in order to send it to the desk of Gov. Jim Justice. It’s been just less than one year since the governor allowed WV sports betting to become law without his signature.

With its short 60-day session, all WV bills are due out of committee in their chamber of origin by Feb. 24.

- Eric is a reporter and writer covering regulated US gambling, sports betting, and DFS. He comes from a poker background, formerly on staff at PokerNews and the World Poker Tour.
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