In March 2019, West Virginia became the third state to legalize online sports betting, online casinos and online poker.
It was a bright spot for the WV online gambling market. It was especially considering the BetLucky fiasco, which forced the closure of sports betting at two WV casinos and the only two mobile sports betting apps available at the time.
Unfortunately, a series of missteps have turned the West Virginia online gambling market from a potential leading example into a lesson on what not to do.
The recent approval and immediate disapproval of election betting and the long lead time to launch online casinos showcase the lack of proper leadership at the WV Lottery, which is the agency that manages gambling in the state.
WV casinos are closed, and major sporting leagues are staying at home with the rest of us. That is a big blow when revenue is so badly needed. It is fair to say West Virginia could have benefited from online casino gambling. Instead, WV online casinos are still about 10 months away.
That is a very costly mistake.
Del. Shawn Fluharty, a co-sponsor of the legislation and a vocal proponent of online gambling, shared his frustrations with PlayWV.com.
“West Virginia seems to be a state where the legislature acts and then the legislation gets parked. It’s incredibly frustrating and holds us back in many areas, not just gaming legislation.”
Online casinos in WV just not a priority
Once the US Supreme Court overturned PASPA, it took the WV Lottery less than four months to launch retail sports betting. Sports betting in WV went live four months after that, and just a few months later, the first sports betting apps launched.
The two-year time frame to launch online casino gambling was a bit shocking to those of us on the sidelines, to say the least.
Fluharty, however, anticipated the delay.
“While the legislation was immensely popular and bipartisan, which is rare for a “gambling” bill, the support from WV Lottery was lacking. The same goes for the governor’s office.”
Fluharty says that the legislation needs to be a priority in order for the launch of online casinos in WV to happen.
“We were one of the first states to act on iGaming legislation. Imagine that; West Virginia on the forefront of something.
“In order to be successful, you need buy-in across the board. This means from the governor’s office to the legislature, to the regulators, to the operators working to get things done. That hasn’t happened.”
Unfortunately, even though the WV Lottery has the tools to add additional revenue to the state’s coffers, it chooses not to use them. And now, with casinos closed and barely any gambling revenue, the state lottery may be regretting that decision.
WV casinos could have helped with the budget deficit
According to Fluharty, West Virginia will face a $300 million budget deficit as it emerges from the coronavirus pandemic.
“If iGaming legislation was up and running, we could be seeing sustained revenues, which would help us tremendously.”
Fluharty said that Pennsylvania reported a 25% increase in online gaming. Likewise, New Jersey also saw a similar increase in March.
Keep in mind that casinos were operational for half of the month of March. April’s revenue figures, on the other hand, will reflect a full month of casino closures. That means online casino revenue undoubtedly will grow for both PA and NJ.
Fluharty notes that even though regulated online casinos are not live in West Virginia, players are still playing online poker and other casino games elsewhere. There are legal options for West Virginia players like Chumba Casino, but it is just not the same.
“There’s no doubt West Virginians are also playing things like online poker, however, they are doing it online in unregulated, overseas markets without the state seeing a penny.”
Does the WV Lottery have the right leadership?
When we asked Fluharty if the WV Lottery had the right leadership in managing online gambling, he said it did once. He believes it could again, but some things would have to change.
The quick sports betting launch happened because an invested lottery administration was working with the legislature to prioritize its implementation.
It wasn’t without its challenges, though, Fluharty explained.
“We were able to do that [launch legal sports betting] despite the attempted influence by Major League Baseball and others pushing for an integrity fee in our legislation. It was a proud moment for our state, in my opinion.”
However, no good deed goes unpunished.
It is no secret that Gov. Jim Justice was pushing for integrity fees in the state. The legislation passed without them. And soon after, the lottery administration responsible for the efficient launch of sports betting lost their jobs.
Fluharty specifically mentions Danielle Boyd as an example. Boyd could have led the lottery and positioned West Virginia to be a leader in the space.
Boyd, now the head of government relations for William Hill Sportsbook, held the position of managing general counsel at the WV Lottery during the time the sports betting legislation was working through the legislature.
“She probably should have been running the show,” said Fluharty. “Instead, she was forced out and ended up landing a job with William Hill, which shows you just how talented she is and how West Virginia dropped the ball.”
Even so, Fluharty believes the current lottery administration is capable of doing good things.
“[The] WV Lottery is in the unique position to be aggressive. They have the ultimate bargaining chip in government relations: revenue production. The legislature has given them the green light to be aggressive and keep our state at the forefront; we want to see it happen.”
Can the West Virginia Lottery salvage its reputation?
To be a leader in anything requires constant growth and innovation. That is even more true considering the competitive nature of online gambling.
Unfortunately, the new lottery administration has not shown a commitment to either. In fact, it sometimes appears as if the administration lacks the basic knowledge required to manage an online gambling portfolio.
That doesn’t mean it can’t change its approach from one that is ultra-conservative to one that is more aggressive and progressive.
“We have to be willing to disrupt the market on a regular basis. We need to be the first state to offer new gaming, to offer new sports betting channels, etc. If not, we are selling ourselves short.”
Keep in mind that West Virginia is a small, mostly rural state. The lottery must want to be a leader before it can get noticed on a national stage.
And in the end, Fluharty thinks West Virginia can still become a market leader.
“That’s why I forced the issue so hard when it came to sports betting and iGaming. That’s where the market was going and where it continues to grow. Our job is to position ourselves for “what’s next” instead of constantly doubling down on the past.”