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Jonathan ZaunApril 03, 2019
April 03, 2019

Online Gaming: West Virginia Legalization Arrives

Governor Jim Justice declined to wield his veto power last week, allowing West Virginia’s recently passed online gaming bill to officially become law of the land in the Mountain State.

Just as he did with West Virginia’s sports betting bill last year, Justice declined to sign House Bill 2934 – better known as the West Virginia Lottery Interactive Wagering Act – into law.

But following the bill’s overwhelming passage by both the House of Delegates and the Senate in March, the Republican billionaire allowed a 15-day veto window to lapse last Wednesday. As a result, West Virginia became just the fifth state – along with Nevada, New Jersey, Delaware, and Pennsylvania – to legalize and regulate the iGaming industry.

West Virginia Enters Rarified Air as Online Gaming Triple Threat

State delegate Jason Barrett (D-61) – the lawmaker responsible for introducing and sponsoring HB-2934 – sent out a celebratory tweet when the legislative clock wound down without a veto:

“#iGaming has now officially completed the legislative process in West Virginia, ensuring we will become just the 4th state in the nation to legalize online gambling.”

Barrett’s positioning of West Virginia as the fourth iGaming state is likely based on the combination of online casino games and poker, which are both legal in New Jersey, Delaware, and Pennsylvania. The iGaming law in Nevada only covers online poker, with casino games like blackjack, roulette, and slots still prohibited.

West Virginia’s peers among the iGaming ranks are even fewer when sports betting is added to the equation. New Jersey is the only state where bettors can currently enjoy online sports betting, casino games, and poker, while Pennsylvania is preparing to launch its own three-pronged iGaming industry later this year.

Nuts and Bolts of Online Gaming in West Virginia

Following the successful model established by the state’s nascent sports betting industry – which went live in August of last year – the West Virginia Lottery Commission (WVLC) will be tasked with regulating online gaming.

As is the case with brick and mortar and online / mobile sports betting, the WVLC can award iGaming licenses to any of the five land-based gambling establishments currently operating in the state:

Hollywood Casino at Charles Town Races

Mountaineer Casino, Racetrack & Resort

The Casino Club at The Greenbrier

Mardi Gras Casino & Resort

Wheeling Island Hotel-Casino-Racetrack

In a potential conflict of interest which might explain his unwillingness to sign either the sports betting or iGaming bills, Justice owns the The Casino Club at The Greenbrier – which bills itself as “America’s only private casino.”

The Greenbrier selected FanDuel as its retail and online / mobile sportsbook operator in June of last year.

In order to offer iGaming, these five operators must pay a licensing fee of $250,000, followed by a renewal fee of $100,000 every five years. iGaming platform providers partnering with land-based casinos would also pay a service provider fee of $100,000.

Operators will pay taxes at a rate of 15 percent on gross gaming revenue, and according to revenue projections provided to the state Legislature by industry analysts Eilers & Krejcik Gaming, the state stands to reap approximately $11.6 million in first-year revenue.

HB-2934 officially becomes effective after 90 days, or on June 7 of this year, but the WVLC has a deadline of June 2020 to finalize iGaming regulations.

Following the lead of Pennsylvania gaming regulators, the WVLC will likely take its time to thoroughly prepare its iGaming launch in light of the U.S. Department of Justice (DOJ) recently revising its stance on the federal Wire Act. That decision has come under siege via a spate of lawsuits filed by states with a vested interest in iGaming, leaving newly legal states like Pennsylvania and West Virginia hesitant to run afoul of a potential federal iGaming prohibition.

As WVLC director John Meyers told the WV Metro News in March, his agency remains cautious until the DOJ’s ongoing litigation is resolved:

“It’s kind of given everybody caution on how to move forward until we can get that resolved.

We are doing everything we can to try and work through that.

We’ve been working through our national organization to try and get some idea on how the DOJ decision is going to come down.”

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