Casino supplements required
A steep decline in West Virginia’s greyhound racing handle over recent years has resulted in the need for casino supplements to cover purses.
Currently, a $15m greyhound racing subsidy is provided to fund the purses of events. Because of the continual decline of the industry, Senate President Mitch Carmichael plans to introduce a bill to eliminate the funds. The money will instead be brought back to the state coffers.
Senate President Mitch Carmichael plans to introduce a bill to eliminate the funds
Funding greyhound racing
By law, casinos in West Virginia must have live racing to provide table games or video lottery gaming. The purses for races are created from three areas; wagers placed, video lottery revenues and table game earnings. A percentage from each of these categories is used for funding.
Because the greyhound racing handle has dropped significantly over the years, the percentage of the casino supplements accounts for the majority of the purse awards.
A study into the greyhound racing industry by Spectrum Gaming Group in 2015 found that table games and video lottery revenues contributed to around 95% of the purse totals for that year.
The decline in greyhound handle is causing an operating deficit in West Virginia. The revenues earned from the industry are not enough to cover the cost of regulation.
table games and video lottery revenues contributed to around 95% of the purse totals
Wheeling Island and Mardi Gras casinos provide video lottery payments to the State Lottery Commission. The funds transfer to the purse accounts at the casinos and the racing commission. The amount being transferred in 2019 is $15m.
GREY2K is a group advocating for the end of greyhound racing in the state. Executive Carey Theil stated that the industry is not economically viable at this point.
Mr. Theil said: “Greyhound racing in West Virginia cannot exist without this $15 million subsidy. Those funds should be used for other important state programs, like education and repairing roads.”
Wagering Decline
The West Virginia Racing Commission released reports showing that that in-person wagers on greyhound races have dropped by 13% from 2014 to 2018 at the Mardi Gras Casino and the Wheeling Island Casino-Hotel-Racetrack.
Despite the decrease, money generated for greyhound racing has increased during the same period. From 2014 until 2018, the total handle of the two venues combined rose by 19%. The majority of the increase came from export handle. This refers to the number of wagers placed by out-of-state bettors.
At the same time, greyhound racing is no longer a large industry in the US. A total of 41 states in the nation have banned greyhound racing. There are only six tracks remaining in the country, with two located in West Virginia.
Even though the total handle has increased, the industry is not generating additional revenues for the state. The share of the greyhound handle for the state decreased by 10% from 2014 to 2018, dropping under the $1m mark.