Pro Leagues Fail to Get Traction As WV Lottery Approves Sports Betting Regulations

Posted on October 10, 2018 - Last Updated on January 20, 2020

West Virginia Lottery officials filed their final rules for sports betting on Oct. 3. Those rules did not include any of the proposed changes that came from representatives of various major sports leagues, like Major League Baseball, the NBA and the PGA Tour.

Chief among the omissions was integrity fees. The practice of making payments to sports leagues from sports betting revenues continues to be a nonstarter for most lawmakers and regulators in the Mountain State.

According to Jim Jenkins of WV MetroNews, lottery officials reviewed 18 comments submitted during the public comment period of adopting the rules. Seven of those comments came from the sports leagues.

“The Lottery declines to intervene between negotiations between private business entities,” a lottery spokesperson told Jenkins.

Striking out again on WV sports betting

The commission’s decision to ignore league requests for fees echoed a similar stance taken by state lawmakers earlier in the year. At the time, the legislature passed a sports betting bill without allowing the leagues to get what they want.

However, the man who is arguably the biggest name in West Virginia is on the other side of the issue. Gov. Jim Justice has deep ties to the leagues and has supported the notion of integrity fees in the past.

Justice’s only contention with the practice has been that he didn’t want the state to collect the fees. However, he apparently tried to muscle the state’s casino interests into an agreement with the leagues back in May 2018.

The casinos, for their part, walked away from the meeting without any sort of agreement. They thought that these kinds of deals needed to be done privately.

In fact, a private meeting between the two parties might even bear fruit. According to West Virginia Racing Association President John Cavacini, the real problem was the governmental pressure that Justice applied.

“The tracks on an individual, contractual basis are available,” Cavacini said. “(Q)uite frankly, (they) want to negotiate from a private sector standpoint as opposed to the legislature saying ‘Hey, you either buy it from these guys or you’re not going to do business in West Virginia.’”

Justice is constantly walking an ethical tightrope

Unfortunately, Justice is in a unique position where he can hardly take a step without a conflict of interest. In addition to holding the governor’s position, he is also the wealthiest individual in the state and owns one of the five casinos.

The resort has hosted numerous sports team training sessions, including the Houston Texans and the New Orleans Pelicans. The resort’s golf course has even hosted PGA Tour events over the years.

So, he made the right choice when he recused himself from signing the state’s sports betting bill. As a casino owner in the state, he would certainly have dealt with questions about whether his signature was self-serving.

However, he appears to have been unable to resist throwing his weight around when it came to helping his sports league buddies.

The lottery needs to proceed carefully going forward

So, even though it appears that Justice did not get his way this time, he is likely not going to take the issue lying down. For that reason, lottery officials need to take extra care with their stewardship of sports betting.

The suspicious combination of former director Alan Larrick‘s sudden departure and general counsel Danielle Boyd‘s mysterious suspension is evidence of increased scrutiny. The sports leagues and Justice are billion-dollar enterprises. They have the resources and determination to look for chinks in the armor constantly.

For now, the rules are set in stone. Presumably, they will receive their approval from the legislature in its next regular session.

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Bart Shirley

Bart Shirley is a writer who covers the NJ online gambling industry as well as a poker player from Houston, Texas. He has a master's degree in business administration from Texas Christian University and a degree in English from Texas A&M. In his spare time, Bart teaches math and business at Memorial High School in Houston.

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