West Virginia Lawmakers Latest to Bet on Sports Gambling

Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...

By Andrew M. Ballard

West Virginia is the latest state moving to allow people to bet on collegiate and professional sporting events at its casinos.

Such sports wagering would be legalized and taxed under S.B. 415, a bill that passed the state Senate by a 25-9 vote Feb. 20. A fiscal note accompanying the legislation estimated that the state would gain about $5.5 million in revenue during the first year sports betting is allowed.

S.B. 415 would impose licensing fees on casinos and levy a 10 percent privilege tax on adjusted gross sports wagering receipts.

West Virginia’s bill—one of five proposals in the state—is the latest sports-betting bill to gain traction. According to the American Gaming Association, there are 40 pieces of active legislation in 16 states.

All states are awaiting the U.S. Supreme Court’s ruling in Murphy v. NCAA—New Jersey’s attempt to repeal part of its state ban on sports betting in an effort to revive the struggling Atlantic City region. The Supreme Court agreed to review the case after a lower court ruled that the partial repeal violated the federal Professional and Amateur Sports Protection Act of 1992 (PASPA), which prohibits states from “authorizing” gambling related to professional and amateur sports leagues.

S.B. 415, however, declares that West Virginia is exempt from the federal ban. Still, Jared Hunt, communications director for the West Virginia House of Delegates, told Bloomberg Tax that the aim of the West Virginia legislation is to allow sports betting if the U.S. Supreme Court strikes down the ban. “If the ban is upheld, sports betting would not go into effect,” he said Feb. 21.

NBA, MLB Response

The National Basketball Association and Major League Baseball are throwing their weight into the legalized sports betting conversation as well—and their reaction to the West Virginia measure has been negative, likely due to the exclusion of an integrity fee.

“Any sports betting legislation must include clear, robust and enforceable protections to mitigate any possible risk to our game,” the MLB said in a Feb. 12 press release responding to the West Virginia bill. “The law quickly advancing in West Virginia unfortunately falls short of meeting those critical standards.”

The groups are actively lobbying in eight of the 16 states pursuing sports betting legislation, according to a Bloomberg Tax analysis of state lobbying disclosures. Each is seeking a set of legislative criteria ranging from age restrictions to the regulation of internet gaming. Most notably, the leagues are pressing for an “integrity fee"—a 1 percent payout of the amount wagered on league sporting contests.

So far, only pending bills in Indiana and Kansas have proposed such fees, according to Bloomberg Tax data.

Approval Seen Likely

West Virginia sources are optimistic about the chances of S.B. 415 passing this legislative session.

The House version of the bill ( H.B. 4396) has passed that chamber’s Judiciary Committee and was pending before the Finance Committee, Hunt said Feb. 20.

The Finance Committee didn’t vote on H.B. 4396 “as it was known the Senate was about to move forward with passing its bill and leadership will likely just run the Senate version of the bill from here on out,” Hunt told Bloomberg Tax.

“Given that the proposal had already passed one major committee and was advancing in a second, it seems to have enough support in the House to pass this session,” he said.

With assistance from Victoria Graham and Ryan Prete in Washington

To contact the reporter on this story: Andrew M. Ballard in Raleigh, N.C. at aballard@bloomberglaw.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bloombergtax.com

For More Information

S.B. 415 is at http://src.bna.com/wv6

H.B. 4396 is at http://src.bna.com/www

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