Casino analysts have described the industry in the region as a pie that is not increasing, but is being divided into more and more pieces. As a result, West Virginia’s lottery commission predicts that revenue for the four racetrack casinos will decrease by more than $200 million from 2012 to 2013. That would correspond to about an $80 million decrease in tax revenue.
The racetrack casino in Wheeling, located between newer casinos in Ohio and Pennsylvania, has said it expects to lose $1 million on table games this year. The casino indicated that if its $2.5 million table game fee was not lowered, it would be unlikely to renew it.
The bill advanced by the Senate would lower that fee for Wheeling and the three other racetrack casinos from $2.5 million to $1.5 million per year. The money from the fees currently goes to provide in-home health care services to seniors.
An amendment to the bill would recover that money by cutting the state subsidy that helps casinos buy new slot machines. The state currently pays for 50 percent of the costs of new Arcade parts. Under the amended bill, the state only would pay 25 percent of those costs.
State Sen. Herb Snyder proposed the amendment targeting the slot machine money. Snyder said because slot machines were the healthiest part of the casino business, it made sense to target them rather than table games or the struggling horse and dog tracks.
“You could not possibly fool with table game revenue,” said Snyder, D-Jefferson/Berkeley. “It’s not big enough. You go to the one that’s plump.”
John Cavacini, president of the West Virginia Racing Association, a group representing casinos, said the slot machine subsidies were important because they let the casinos update their facilities to stay competitive with other states.
Neighboring states do not offer similar subsidies to casinos. Tax rates on slot machine revenue are lower in Ohio than they are in West Virginia, but are much higher in Pennsylvania.
Supporters of the new proposed casino in Franklin told the committee that because of its location, it would not draw business away from existing West Virginia casinos.
The casino would hope to target Virginians, specifically from the Lynchburg and Richmond areas. Both Lynchburg and Richmond are nearly a three-hour drive from Franklin, and Richmond is closer to the casino in Charles Town, W.Va., than it is to Franklin.
The bill only would allow a casino to be built if the developers met certain stipulations intended to make it a destination resort. The developers must submit plans to build at least 1,000 home sites and a hotel with at least 150 rooms. And the total cost of the development must be at least $80 million. The development needs to be on at least 1,000 adjoining acres and it must include recreational activities.
Stephen Conrad, a resident of Pendleton County, where the casino would be located, said it would bring about 300 jobs to the area. A U.S. Naval facility in nearby Sugar Grove, W.Va., is scheduled to be repurposed in 2016 and take 330 jobs with it.
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