West Virginia Passes Sports Betting Legislation

West Virginia Passes Sports Betting Legislation

West Virginia’s newly minted Lottery Sports Wagering Act passed with something approaching flying colors, heralding the start of legal sports betting in the Mountain State.

The new law, which passed 25-9 in the state Senate and 77-22 in the House of Representatives, explicitly permits wagering on “certain professional or collegiate sports events” as authorized by the West Virginia Lottery Commission. By passing this law, West Virginia’s five casinos will be able to offer a full menu of sports betting activities for visitors, including a mobile sports wagering app (which will require users to be located within the state lines and to go through an age verification process), and likely within as few as 90 days. In this regard, West Virginia has, against all odds, become one of the first states in the entire country to simultaneous pass a law that will make sports betting fully legalized within its borders and also have a gambling infrastructure that is ready to start taking wagers from bettors in the very near term.

All that being said, it’s no wonder that West Virginia has also become a sort of model for how other states looking to cash in on the multi-hundred billion dollar sports betting industry can move their own regulatory legislation along expediently and conclusively. Well, almost conclusively. We can’t say that any of the states, not just West Virginia, have reached any kind of “conclusion” yet as regards legalized sports wagering because the final hurdle to be surpassed is entirely outside the control of anyone who isn’t a sitting justice on the United States Supreme Court.

The highest court in the land is expected to return a verdict in favor of the case brought forward by the state of New Jersey’s congressional delegation that the Professional and Amateur Sports Protection Act of 1992 (PASPA) is unconstitutional. PASPA, the Garden State’s cadre has alleged, violates the U.S. Constitution in that it has for 25 years infringed on the rights reserved to the individual constituent states by preventing them (well, all 46 except Nevada, Oregon, Delaware and Montana, that is) from regulating a sports wagering industry if they so desire it. There is a good deal of merit to New Jersey’s claim, as the nation’s founding document clearly provides for the individual states to authorize lotteries or other gaming activities within their own borders, which PASPA has for too long denied to majority of the states in the country

That doesn’t even get into the fact that the overwhelming majority of West Virginians, to say nothing of the majority of Americans in general, want access to sports betting perhaps more so than they want access to other forms of wagering. One of the few truly unifying features that brings all the various states together is the love of sports, and even trusted sources like the most recent edition of the Nielsen Ratings have shown that more than a quarter of all sports viewers are betting on those contests in some form or fashion. That means that, constitutionally valid or not, PASPA’s days are numbered so long as the American public continues to go to the lengths of placing wagers to the tunes of $200 billion-plus on sports at gray area offshore sportsbook websites outside US federal jurisdiction.

The outcome Supreme Court’s decision – which could come as soon as April 2, but will almost assuredly be delivered by no later than June when this year’s SCOTUS term is up – notwithstanding, West Virginia has played its hand quite well in the lead up to the March 29 passage of its new sports betting law. The Mountain State, which, like many others around the nation, could desperately use a windfall of cash or at least another reliable revenue stream to fill up the state coffers, could find itself become a destination for reasons besides its tranquil Appalachian setting. Thanks to the strategic location of the state’s five casinos, the passage of the West Virginia Lottery Sports Wagering Act will put more than 10 million residents of WV and nearby Pennsylvania within roughly 90 miles of at least one gambling facility equipped and legally able to take sports bets.

Being first state in the region to get into the meat of the sports wagering is, quite predictably, a big deal for West Virginia, as it will give the Mountain State access to the extra revenues it needs while further boosting existing revenue streams coming from slot machine parlors and table games. The expected influx of out of state visitors is also expected to create a positive cycle of job creation, which will benefit other businesses (especially restaurants, hotels and service stations) in West Virginia’s counties and far flung cities. This mutually beneficial relationship between all facets of local government, state government, the broader business community, the gaming industry in particular, and even the pro sports leagues themselves was exemplary and should be a source of inspiration for other states looking to craft similar laws that take of everyone concerned.

The overwhelming support from seemingly every party involved in the process to a large degree explains the massive margins of victory the West Virginia Lottery Sports Wagering Act received when put to the vote in both the upper and lower houses of the state legislature. The West Virginia Lottery Commission deserves a lot of the praise it is getting from sports betting industry experts in the light of how this was a largely seamless process from beginning to end. Basically the only hiccup in the whole affair was some late breaking insistence on the part of the jointly lobbying NBA and MLB for a 1 percent “integrity fee” to be paid out to the pro sports leagues – the Lottery Commission wasn’t having it and stuck to its guns to avoid it.

Other states would do well to emulate West Virginia with regard to that insistence, as it is hard enough to resist the combined lobbying powers of fully half of the major sports leagues in America. It is much harder still to actually successfully deny those same leagues their exorbitant, dare we say usurious rent on the “use” of their “products,” those being the sport events themselves. If West Virginia had acquiesced on that request from the NBA and MLB “blueprint” for an ideal sports betting legislation, the actual damage done by that aforementioned 1 percent skim off the top would have amounted to roughly 20 percent of the Mountain State’s casino sportsbook’s nascent revenues. Giving credit where credit is due, West Virginia’s lawmakers and the governor didn’t bend (though the latter took some convincing, apparently) and they helped save their own businesses – and by extension hundreds if not thousands of employees – from paying through the teeth to organizations with annual revenues in the billions.

Legislators from states all over the country are paying attention in light of West Virginia’s success, both in passing a law to regulate sports betting as quickly and efficiently as it did and in standing up to the professional sports leagues that were after too much of a cut for themselves. New York’s proposed regulatory legislation slashes the integrity fee payout by three quarters, while Kansas lawmakers have already listened to their hopeful gaming operators who said they would not support any bill that was not explicitly based on the West Virginia model. Here’s hoping that the federal government will follow suit with the states supporting West Virginia’s position if it comes down to a vote in the Congress.

The country has already seen what happens when government pays too much attention to interest groups – though that goes both ways, as the casino industry is certainly no assemblage of saints itself, and states should be wary of it as much as the leagues. With everyone wanting their slice of the pie, it’s important to consider what happens when any one party gets too much of a cut: we get laws like the largely ineffectual PASPA, and just look how long it has taken for the political will to be summoned up to challenge it, much less kill it. West Virginia, against the odds, showed what can be done when the people’s interests for sports betting in West Virginia are put closer to the top, and that is to be commended.

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