FISCAL NOTE

Date Requested: May 25, 2016
Time Requested: 10:31 AM
Agency: Lottery Commission
CBD Number: Version: Bill Number: Resolution Number:
4002 Introduced SB1007
CBD Subject:


FUND(S):

State Excess Lottery Fund

Sources of Revenue:

Special Fund

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


It is unclear what impact this measure will have on the costs and revenues of state government due to a number of ambiguities that would require clarification prior to providing projected revenues. First, allowing operators to also be retailers and vice-versa will not have an obvious fiscal impact, nor one that could be calculated without first knowing the number of locations that may be opened or remain open or number of parties who may apply for licensure as a retailer who are currently operators. Second, the fiscal impact of going from 5 to 7 machines may appear to be one that would enhance revenues, but the only way to estimate the increase would be an estimate from bidding remaining permits and the $1000 annual permit fee [assuming all remaining permits were bid]. Third, the major issue in this bill involves the provision that appears to fix the tax rate at 54% upon first glance. Unless the bill is revised to read in the following way, the Lottery cannot provide a positive estimate because without ensuring the state maintains the current 50% tax rate, possible changes in the percentage of the commission's share due to declines in the aggregate average daily gross terminal income could result in a loss of revenue: "Provided, That effective July 1, 2016, the commission’s share of gross profits shall be fixed at fifty percent regardless of the aggregate average daily gross terminal per terminal." This amount was reduced from 54% in the draft legislation to 50% which reflects the current tax rate [of 50%]. [Strike through the remaining provisions beginning with: Provided, however, That if the commission’s calculation of aggregate average daily gross income per video lottery terminal yields an amount that is not greater than $140 per day, one of the following schedules apply...]



Fiscal Note Detail


Effect of Proposal Fiscal Year
2016
Increase/Decrease
(use"-")
2017
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


Without clarification of the issues defined above, the Lottery is unable to provide estimated revenues or impact on costs to government.



Memorandum


Please see response above.



    Person submitting Fiscal Note: Danielle Boyd, General Counsel
    Email Address: dboyd@wvlottery.com