The West Virginia Lottery did sports bettors across the state a favor yesterday by simultaneously approving permanent sports betting rules and rejecting provisions that the NBA, MLB and PGA insisted were necessary to protect the integrity of their games.
The leagues, supported by Governor Justice, sought a number of provisions such as one requiring sportsbooks to pay integrity fees to the sports leagues and another that mandated sportsbooks rely exclusively on data provided by the leagues for settling wagers. The state Lottery Commission shot down all seven demands in a vote yesterday to establish more permanent sports betting regulations for West Virginia.
Yesterday’s approval just about closes the book on what has been a long-running saga pitting the sports leagues and Governor Jim Justice against state regulators over how sports betting should be managed in West Virginia. The legislature is scheduled to give final approval to the permanent rules during the 2019 regular session.
WV MetroNews reported yesterday that the Lottery Commission did approve two changes to the rules. The most noteworthy of those allows customers to login and check their mobile betting accounts while out of state, but players will still be required to be within state lines when placing wagers.
The sports leagues have had their demands shot down in every state that has legalized sports betting to date. Delaware, Mississippi, Nevada, New Jersey, New York and Pennsylvania have all passed sports betting laws and none of them give integrity fees to the sports leagues or force operators to rely on official league data.
Adding West Virginia to that list only hurts the leagues’ chances of getting their way in other states. As lawmakers in other states move to legalize sports betting, the leagues will have a hard time convincing them to agree to integrity fees and other uncompetitive rules when those same proposals have been rejected in every other state so far.
What the Sports Leagues Wanted and Didn’t Get
The NBA, MLB and PGA wanted a total of seven changes to the current emergency regulations that took effect earlier this year to get sports betting up and running in West Virginia.
A full list of those demands is unavailable online, but local media outlets reported the most controversial of the leagues’ demands included rules related to integrity fees, data rights and control over which types of bets may be offered.
Regarding integrity fees, the sports leagues wanted WV sportsbooks to be required to pay a 1% fee on total betting handle to the leagues. The leagues argued the fee is necessary to compensate them for the increased costs of ensuring the integrity of their games. When that argument failed to gain traction, the leagues pivoted by sometimes justifying the fees as a sort of “royalty” payment.
The leagues also requested the Lottery Commission to include a mandate that would require sportsbooks to rely exclusively on data provided by the leagues. Again, the leagues argued this is necessary to protect the integrity of the games and to ensure sports wagers are settled correctly.
The Commission rejected this request as well and said, “The Lottery declines to intervene between negotiations between private business entities.” West Virginia Racing Association President John Cavacini echoed those sentiments.
“The state has no business negotiating a contract between two privately-held, for-profit companies,” he said. Cavacini also said this previously:
“The tracks on an individual, contractual basis are available and, quite frankly, want to negotiate from a private sector standpoint as opposed to the legislature saying ‘Hey, you either buy it from these guys are you’re not going to do business in West Virginia.’”
Additionally, the leagues wanted the Lottery Commission to give them the authority to prohibit West Virginia sportsbooks from accepting certain types of wagers. In particular, the leagues expressed concern that in-play wagers (such as who will score next or the outcome of the next play) depend too much on individual players or officials. This, the leagues argued, puts those types of wagers at greater risk of corruption.
The Lottery Commission denied that request along with all the others. With the sports leagues failing to convince legislators at the state level, they are now pitching these same ideas to Congress in a bid to get federal legislation that more closely aligns with their goals passed into law at the federal level. You can read more about the leagues’ demands and their justifications for those demands here.