West Virginia Lottery Commission has revealed emergency sports betting rules to the public.
On June 21 the West Virginia Lottery Commission approved new rules for sports betting in the state. On July 9 the rules were released to the public via the rule filing system of the Secretary of State. The Commission was given the power to create emergency rules for sports betting by the West Virginia Lottery Sports Wagering Act. The emergency rules were to be created before December 1; after that date, the agency would need to submit the rules via the traditional rule-making process.
Emergency rules details
Within the new rules, state casinos can now submit a request to begin sports-pool or online sports-pool operations. The Lottery will consider the request and, if approved, will require the venues to pay a $100,000 (£76,091) licensing fee. The license will only be valid for one year, and if rules are not met within 270 days of gaining approval, the permit provided may be pulled.
Commenting on the licensing process, the president of the West Virginia Racing Association, John Cavacini, said: “This now puts the casinos and racetracks in a position to apply for a license and be licensed by the Lottery to be a sports betting venue. With that happening, the tracks now have the confidence of going out and picking their vendors and purchasing equipment and making capital expenditures that would have been hard to do without having to have a license in hand.”
The Commission also provided specific details on how sports betting lounges should be created at casinos. Third-party vendors can be used to develop sports betting applications, but the apps will have to accept wagers only from those who are physically located in the state, whether the wagers take place online via computer or with a mobile device.
Casinos will also have to create what is being called an integrity monitoring system. The Commission has defined this system as one where the operator of an online sports pool will receive and send reports from sports pool operators that will help to identify suspicious activity. Before operations can begin, a license holder will need to conduct an assessment of system integrity and security. The same assessment must be completed on an annual basis by an independent party.
Once up and running, the Lottery has estimated that as much as $5.5m (£4.2m) will be earned via sports betting in the first year. One issue that is still being considered is an integrity fee. Professional sports leagues across the US have asked individual states to pay such a fee to their organization to assist in paying for services used to uphold the integrity of games. West Virginia Governor Jim Justice has shown interest in implementing an integrity fee and a special session may be held to do so.
The neighboring state of Pennsylvania has also been working on entering the sports betting industry, with legislation already enacted. As of this week, the Pennsylvania Gaming Control Board is now accepting applications for licenses from sports betting operators and suppliers. The application process began on July 11 with an operator license providing the holder with the ability to offer sports betting on-site or online and via mobile channels. Licensing is restricted to the land-based casinos of the state.
A manufacturer license is required of any company that will be building, programming or maintaining devices or equipment that is used for sports betting. A supplier license will be required for companies that will be offering ancillary services like integrity or risk management options.
Pennsylvania will be a direct competitor of West Virginia as the two are neighboring states. Though, Pennsylvania has a much higher tax rate of 36% set for sports betting, which could be harmful as operators may not show any interest due to the amount they will have to pay in taxes. West Virginia has set a much lower tax rate of 10% on sports betting revenues.