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Slots to offset casino fee drop

March 29, 2013
By CASEY JUNKINS - Special to the Herald-Star , The Herald-Star

WHEELING - Jim Simms was glad the West Virginia Senate Judiciary Committee advanced a bill to lower the annual fee for table gambling Thursday, but he was disappointed the same bill would now make it more expensive to purchase new slot machines.

The measure - introduced by Senate President Jeff Kessler, D-Glen Dale - would reduce the annual fee West Virginia casinos pay to offer table gambling from $2.5 million to $1.5 million. The Judiciary Committee made some amendments to the bill before advancing it Thursday, and it must be passed out of the finance committee for the full Senate to consider the legislation by Monday.

"We are hoping the finance committee can repair this bill," Simms, president and general manager of Wheeling Island Hotel-Casino-Racetrack, said late Thursday. "We are committed to keeping the best and most recent slot machines on the property, so we don't want to lose our ability to reinvest in those."

According to Sen. Rocky Fitzsimmons, D-Wheeling, who sits on the Judiciary Committee, Kessler's original bill was amended in two major ways Thursday. First, the discounted annual fee would now apply to all four of the state's racetracks, rather than only three of them. Kessler's original bill would only have reduced the fee for the Wheeling track, Mountaineer Casino Racetrack & Resort and the Mardi Gras West Virginia Casino & Hotel (formerly Tri-State Racetrack) near Charleston.

As amended, the bill now would lower the fee for the Hollywood Casino at Charles Town Races in the Eastern Panhandle as well.

According to the West Virginia Lottery Commission, the Wheeling Island track generated about $5.3 million worth of revenue from table gambling from July 1 through the end of February. During the same time period, the Eastern Panhandle track saw about $104.7 million from table gambling - nearly 20 times as much as the Wheeling facility.

More significant, according to Fitzsimmons and Simms, is the amendment made by Sen. Herb Snyder, D-Shenandoah Junction. Currently, tracks can receive reimbursements from the state for the purchase of new slot machines in the amount of $1 for every $2 worth of machines.

This amended bill would reduce this reimbursement to 50 cents for every $2 worth of slot machines, making new machines more expensive for the Wheeling Island facility and other tracks.

"It is my understanding there will be an amendment in the finance committee to restore the full reimbursement amount," Fitzsimmons said. "It would really be nice if we could keep this in place."

The $2.5 million annual fee that each of the four tracks currently pays provides $10 million for senior citizen services throughout West Virginia. Kessler's original bill - which would have reduced the amount collected from the fees to $7 million - would have covered the gap by diverting $3 million from the purse funds that go to thoroughbred and greyhound breeders.

Snyder's amendment would replace the lost senior citizen funding by taking it from the new slot machine subsidies instead of the breeders' funds.

"Maybe it is time to take a hard look at the tens of millions of dollars that are flowing to out-of-state breeders and instead, focus on keeping jobs in West Virginia," Simms said.

The legislative session ends April 13, but Fitzsimmons said the bill must reach the Senate floor for debate by Monday. A version of the bill must pass in both the Senate and the House by the end of the session to reach Gov. Earl Ray Tomblin's desk for his signature.

"We don't know what this thing is going to look like in the end," Fitzsimmons said. "Even if we pass it out of the Senate, who knows what may happen over in the House."

Simms insists his company may not renew its table gambling license in July if the fee is not adjusted in some way, because the Wheeling facility is on pace to run its tables at a $1 million operating loss in 2013. He said the track has 105 employees whose jobs are directly tied to table gambling.

Prior to Kessler introducing his bill, Fitzsimmons and Sen. Jack Yost, D-Wellsburg, joined others to sponsor legislation that would reduce the annual fee from $2.5 million to $1 million for all four casinos - a $500,000 annual difference from the Kessler legislation. This bill also would reduce the tax rate on table games from 35 percent to 25 percent. There has not been any movement on this bill.

 
 

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