West Virginia OKs Online Gambling

West Virginia recently became the fifth state to legalize online casinos and poker, since Governor Jim Justice let the deadline pass for vetoing the West Virginia Lottery Interactive Wagering Act. Justice owns the Greenbrier Hotel & Casino (l.), and also allowed sports betting to be legalized without his signature. Meanwhile, a dispute between Miomni and Entergaming continues to block on-site and online sports betting at Wheeling Island and Mardi Gras casinos.

West Virginia Governor Jim Justice let the March 24 deadline pass for vetoing the West Virginia Lottery Interactive Wagering Act, thus making the state the fifth in the U.S. to legalize online casinos and/or poker, following New Jersey, Pennsylvania, Delaware and Nevada. The state House passed the measure, H 2934, in February and the state Senate amended and approved the bill. The House accepted the changes and sent it to Justice.

Customers age 21 or older can play online poker and casino games within state lines. The state’s five casinos may apply for one of the five available permits at $250,000 each, renewable for $100,000 every five years. Platform and service management licenses will cost $100,000 and supplier licenses will cost $10,000. Online gambling revenue will be taxed at 15 percent.

Eilers & Krejcik Gaming estimated first-year revenue from online gambling would be about $11.6 million. But generating revenue was not the only motivation, said state Del. Jason Barrett. “Right now, online poker is illegal and it’s being done overseas and there are certainly some concerns there with the integrity of the games as well as making sure players are paid because it’s currently completely unregulated being offshore,” he said.

Observers said the most aggressive timeline would place an online gambling launch at 2020. The state allows three skins for each of the five casinos that offer sports betting; these deals could expand to include online gambling, observers said. Currently sports betting partnerships are the Greenbrier with FanDuel Sportsbook; Hollywood and Mountaineer with William Hill US; Mardi Gras and Wheeling Island, both owned and operated by Delaware North Companies, with Miomni.

But a dispute between Miomni and Entergaming has led to the closing of the sports books at Mardi Gras and Wheeling Island since March 6. The companies disagree whether Miomni has the right to use certain intellectual property. Miomni terminated its agreement with Entergaming in February.

In a letter to West Virginia Lottery Director John Myers, Delaware North President E. Brian Hansberry wrote he “believes that Miomni has and continues to infringe upon Entergaming’s intellectual property rights in relation to the use of proportions of the platform.” Hansberry also wrote Delaware North was unaware of the agreement between the two companies when it contracted with Miomni. He added the situation also has affected Delaware North’s online app, BetLucky.

Miomni and Entergaming have since traded allegations back and forth. Unfortunately, Hansberry noted, Wheeling Island and Mardi Gras have been unable to take bets on NCAA Basketball Tournament games, resulting in the loss of revenue for the state and disruptions for employees. He added, “We are evaluating our options” and working with both sides to resolve the dispute.

State Del. Shawn Fluharty, who led efforts to legalize sports betting, said, “It’s certainly frustrating because I worked for years to get the ball moving on this and got out in front of it early, help promote it, built a coalition with individuals involved in the lottery and casinos and really help kind of be the front man on sports betting to work so hard to see West Virginia get out in front of something.”

He added, “When you start thinking of disputes with intellectual property issues, they can go on forever. This could get ugly and ugly for a long time, which could make it ugly for West Virginia if we can’t get it resolved. If you’re Delaware North, honestly, the process should have been vetted better. So you’re telling me you enter into an agreement with Miomni, and then you don’t know who Miomni is working with. You don’t know that Entergaming and Miomni have a dispute. Are you absolutely unaware of it or did you not vet the process good enough?”

And Fluharty added, “We put the responsibility on regulators to make sure things like this don’t happen. So if you’re the lottery, you need to know every single entity that’s involved before allowing things to go live.”

Meanwhile, the sportsbooks closings resulted in handle of $2.8 million for the week ending March 15, the lowest since November which was a full month before Wheeling Island and Mardi Gras opened their sports books.