Lottery Revenues Down, But Commission Remains Optimistic - WBOY - Clarksburg, Morgantown: News, Sports, Weather

Lottery Revenues Down, But Commission Remains Optimistic

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CHARLESTON, WV -

At its July monthly commission meeting, West Virginia Lottery Director John C. Musgrave reported $1.21 billion in lottery revenues in the 2014 fiscal year, which ended June 30.

That’s down 9 percent from 2013 figures.

The decrease in revenues is caused by competition from surrounding states, the director said, also noting that a once all-time high of 13,900 machines has dwindled to a current total of about 7,300.

The good news, Musgrave shared July 21, is that the numbers actually exceed projections by about $37 million.

“We’re very conservative about our (revenue) projections that we give the (West Virginia) Legislature and governor,” Musgrave said. “We’ve stabilized a little bit. The economy has stabilized a bit too. The biggest portion is competition. We just did better that we anticipated, from our conservative estimates.”

The introduction of new games is one way the Lottery sees as opportunities to recoup players and revenue.

“The casinos are always looking at their game mix,” Musgrave said. “There are more things on the horizon that can have a further impact on the revenue too, such as the smoking bans they are talking about.”

Hancock County is currently reviewing its smoking laws, which affects Mountaineer Racetrack and Casino in Chester, according to the director.

“We know revenue decreases (when smoking is banned),” said Musgrave. “Those are local issues, but they affect state and county budgets as well.”

LVL Operators

The Lottery Commission's predicament of certain operators running an additional five Limited Video Lottery (also known as LVL) machines, while promoting themselves as fraternal organizations to gain the benefits of non-profit organizations, is ongoing.

“We’re working with the operators that we’ve had complaints on, to finalize assessment penalties,” said Musgrave. “We’ll start on the others soon.”

No action was taken in the July meeting, but a report showed that 23 of 28 operators have self-reported violations under their given deadline, while five did not report.

In previous monthly meetings, the commission offered significant reductions in potential fines for self-reporting operators.

An additional 26 retailers also filed reports, at the commission’s request for information.

“We’re looking at all of the submittals of the reports,” Musgrave told the commission. “We’ll set up a work station to assess (the reports) and go in with auditors and investigators when we deem necessary.”

Operators that do not self-report are subject to a maximum fine of $10,000 per offense.

Musgrave also noted that annual licensing for LVL operators is due Oct. 1.

“We’ll take a close look at the license requests for compliance,” he said. “

Fair Time

With the opening of The State Fair of West Virginia coming Aug. 8, the West Virginia Lottery is gearing up for a very busy time.

The fair runs through Aug. 16 at Fairlea in Greenbrier County.

With its presence at the fair, the Lottery itself always becomes the state’s biggest selling retail location for the month of August, doing an estimated $250,000 in sales.

Opening day 2014 will be proclaimed West Virginia Lottery Day, with special promotions and a Lottery-sponsored concert that evening, scheduled to be the country band Little Big Town.

“It’s an awesome opportunity for us,” said Nikki Orcutt, Lottery deputy director of marketing. “You ride the (carnival) rides, you eat, and play the lottery. And there will be Lottery swag that you can’t get anywhere else too.

“We do special second chance drawings (at the fair), so there is an additional added value in playing there.”

Instant scratch-off tickets make up about 85-90 percent of the sales at the fair, but online games such as Powerball and Mega Millions are also available onsite.

The State Fair of West Virginia itself is impacted significantly by the revenue generated by the Lottery.

Other actions:

* The commission re-elected its chairman and vice chairman, Kenneth L. Greear and Bill Clayton, respectively, for 2015.

* Approved the transfer of $10 million from the Racetrack Video Lottery administrative fees to the Racetrack Video Lottery Modernization Fund, per West Virginia Code 2922A-10B.

* Approved allocation of up to $7 million per year for the next three years to accumulate an estimated $21 million for expenses related to video lottery central system, Lottery parking building and parking garage.

* Approved a policy to cap jackpots permitted on certain Intrastate progressive games at $1 million, subject to further analysis in the future.

* Approved a request by Hollywood Casino in Charles Town to add a new table game, “Heads Up Hold ‘em” to its Minimum Internal Control Standards. The new game will be available to similar facilities in the state.

* Approved about two dozen items suggested by the games and rules committee, concerning hardware and software of licensed or permitted video lottery terminal manufacturers.

The next monthly full commission meeting will be Aug. 26.

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