O Ye, Of Little Faith: WV Lottery Doubts Sports Betting’s Potential

Posted on July 15, 2019 - Last Updated on January 20, 2020

West Virginia Lottery Director John Myers commented to WV News that sports betting in the state could be a “pain in the butt.”

According to Myers, his staff is dedicating much of their time toward creating a sustainable sports betting market in the Mountain State.

In the end, Myers comments seem to indicate he doesn’t believe sports betting in West Virginia will ever live up to the expectations or predictions.

WV Lottery fails to see the potential of online sports betting

It is almost certain that West Virginia sports betting handle and revenue could be significantly higher. Several factors have affected the bottom line.

Some are obvious, including:

  • Two closed sportsbooks
  • The lack of online betting
  • No online betting options during most of the NFL football season or March Madness

And some are not so obvious, including:

  • Lack of a full-featured sports betting app available in the market
  • Round-the-clock betting options
  • Lack of marketing and customer acquisition efforts

The bottom line is that WV’s first, and only, online betting app, BetLucky Sportsbook, did not have the reputation or the app features to inspires confidence in bettors.

One of the more attractive features of online betting is a player can bet anywhere and at anytime. BetLucky actually had operating hours. In other words, the app closed.

Even so, online wagering through the app was gaining momentum right up until it was forced to shut down.

It provided only a hint of what would be possible with the right app and the right focus on growing sports betting in the state.

Myers commented on the state of sports betting in West Virginia:

“We didn’t really know exactly what we would do our very first year. We’re ending the year close to $1.2 million. I think it’s lower than what we expected, but not as much as what others expected it to be not having two of the casinos operating for part of the fiscal year.

“We would have seen some additional revenue, I’m sure, although we did get the majority of the football season, which is typically the largest revenue generator.”

Lack of faith in the WV sports betting revenue estimates

As the 2019 fiscal year comes to an end, Myers talked about the sports betting market.

The WV Lottery received estimates that bettors in the state wagered approximately $250 million per year on the black market.

In the 10 months since its launch, bettors wagered about $130 million. On the surface, it may seem disappointing that West Virginia didn’t capture more of the black market.

Unfortunately, the state has faced several challenges implementing its legal sports betting market. The fact that it captured about half of the estimated black-market betting can be considered a win.

Additionally, estimates indicate a potential of $5 million in tax revenue for the state. Myers does not think the state will ever see that number.

It seems there is a lack of understanding of how impactful a fully operational retail and online betting market will be.

One only has to look at other markets like New Jersey and Pennsylvania to realize the impact of online betting. While PA is in the early days of online sports betting, 83% of New Jersey’s revenue in June came via online sports betting.

Of course, we can’t compare WV to NJ, but we can take away the significance of online betting to the bottom line.

In the first 10 months of operation in WV, the state collected $1.2 million in tax revenue.

It doesn’t seem too far out of the realm of possibility that with several online betting apps and all five WV casinos operating a sportsbook, the state could reach $5 million in tax revenue.

Myers prediction for this next fiscal year:

“To be honest, without having a full year of operations, I’d just be guessing. I’ll say we’ll see $2 million this year, but I can’t guarantee that.”

It seems as if he does not take into account the importance of relaunching online betting.

There are currently three online sports betting apps approved in West Virginia:

If at least one of those mobile gambling apps launch by college football season, the potential for state revenue to soar is high.

The Lottery’s role in online sports betting in WV

The WV Lottery is charged with interpreting and enforcing the rules and regulations for sports betting in West Virginia.

Myers commented on its role:

“The expectations are different from different people. Some folks have high expectations because they enjoy doing sports wagering and they’ve not been able to see that come to fruition.

“Although that’s not been something the Lottery can typically affect, because we’re not setting up the systems, placing wagers or making odds. We’re just making sure everything has been done within the law.”

Actually, the West Virginia Lottery does affect the process. Its interpretation of the Wire Act and what is necessary to comply appears to be one of the reasons for the most recent delay.

In May, Myers went on the record that DraftKings Sportsbook passed all of its tests and would likely launch one week later.

Then the next week Myers sings a different tune. He again went on record, only this time to predict a launch that’s closer to football season.

From his comments, the delay was a result of the need to build a wallet server in West Virginia. A wallet server is a second server that only contains customer account information.

The requirement that the wallet server location is in West Virginia seems to be an overly cautious stipulation.

The Wire Act was written to prevent the transmittal of sports betting data across state lines. And yet, there is no betting data housed, or passing through, a wallet server.

Mardi Gras and Wheeling Island update

Delaware North, the owner of Mardi Gras and Wheeling Island casinos, is in a legal battle with its sports betting provider, Miomni. Delaware North claims fraud and is seeking to dissolve its contractual agreement with the company.

That leaves the company trying to navigate a new path. Myers shared what he knows:

“I did ask the question (to) one of their general managers the other day and they did say that they’re working on it, but they did not provide any details at that time.”

The fact that there is an ongoing case in front of the Delaware Court of Chancery indicates it could be a while before the casinos are back in the sports betting game.

The state of West Virginia sports betting can be summed up with this statement by Myers:

“We thought we had it up, had it going, but it shut down; now, I can’t really give you a date.”

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Kim Yuhl

Kim Yuhl has over five years of experience writing about poker culture, the online gambling industry, and more recently, the legalization of sports betting.

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