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W.Va. Senate panel modifies casino fee bill

CHARLESTON, W.Va. -- Legislation to give state casinos hard-hit by out-of-state competition a break on a $2.5 million annual licensing fee (SB615) advanced from Senate Judiciary Committee Thursday -- but with a major twist.

In an amendment that pits thoroughbred owners and breeders against casino operators, Sen. Herb Snyder, D-Jefferson, changed the bill to make up the lost revenue from a state Lottery matching fund for casino upgrades, and not from racing purses as the original bill envisioned.

As originally drafted, the bill would take $3 million a year from Lottery-funded purse funds to make up for revenue lost by reducing the $2.5 million annual table games licenses to as little as $1.5 million for each of the four racetrack-casinos in the state.

Snyder called that an "insult" to thoroughbred owners and breeders, and noted that the Manchin administration raided $11 million a year from the purse fund in 2005 to pay down unfunded liabilities in the state Workers' Compensation Fund.

"The introduced bill singles out one entity," Snyder said. "There are thousands and thousands and thousands of people -- at least 3,000 in Jefferson County alone -- who make their meager living from live racing."

According to Lottery Commission financial reports, the Lottery provided $56.9 million for thoroughbred purses, and $20.1 million for greyhound purses in the 2011-12 budget year. The purse funds are funded from 7 percent of racetrack video slots profits.

Snyder's amendment instead takes $5 million a year from a $10 million Lottery matching fund set up in 2011 to allow the four casinos to replace or upgrade slot machines.

Currently, the casinos can get 50 cents of matching funds for each $1 they invest in new slot machines. Under Snyder's amendment, that match would be cut to 25 cents on the dollar.

John Cavacini, president of the West Virginia Racing Association, said that would sabotage a fund that allows state casinos to compete with larger, newer casinos in Pennsylvania and Ohio -- which helps assure state video Lottery profits.

"The modernization fund has been extremely successful," he told the committee. "You have made it possible for us to go out and purchase machines that let us compete with Pennsylvania and Ohio."

He said that in some cases, state casinos have been able to win back players by offering the newer, flashier slots machines that had attracted them to facilities in the neighboring states.

Revenue losses to competing casinos in metro Pittsburgh, and now in Columbus, Cleveland and Cincinnati, are the impetus for the legislation to lower the table games licensing fee.

Earlier this year, management of the hardest-hit casino, Wheeling Island, indicated the casino is losing money on labor-intensive table games, and does not intend to renew its state table games license on July 1 at the current rate of $2.5 million.

Under the state law legalizing table games at the four casinos, the license fees totaling $10 million a year go to the Bureau of Senior Services to fund in-home care services.

Under Snyder's amendment, the table games license fee would drop to $1.5 million at all four casinos, but the $5 million from the modernization fund would provide a total of $11 million each year for in-home care programs.

The original bill would set a sliding fee of between $1.5 million and $2.5 million, using a formula based on table games revenues for each casino for the previous year.

That would generate $7 million a year, supplemented with $3 million from the purse fund, to keep the in-home services account at $10 million a year.

The bill goes to Senate Finance.

Also Thursday, the Judiciary Committee advanced a bill to license a sixth casino in the state, at a "rural resort community" in a county with less than 10,000 population (SB492).

Modeled after the legislation authorizing a casino at The Greenbrier resort, the license would be intended for the planned Fisher Mountain Resort development on the site of the Highlands Golf Course near Franklin in Pendleton County.

Project backer Steve Conrad told the committee the casino resort would revitalize the economically hard-hit county.

"Economically, we need some relief, and we see this as the best opportunity we've had in a long time," he said.

The bill also goes to the Finance Committee for further consideration.

Reach Phil Kabler at philk@wvgazette.com or 304-348-1220.


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