FISCAL NOTE
Date Requested: February 23, 2016
Time Requested: 02:44 PM |
| Agency: |
Racing Commission |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2754 |
Introduced |
HB4702 |
|
|---|
| CBD Subject: |
Legal Gaming |
|---|
|
FUND(S):
State Excess Lottery Revenue Fund, Seniors Home and Community Based Services Fund
Sources of Revenue:
Special Fund,Other Fund
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
This bill will create an additional $24.6 Million in deposits to the State Excess Lottery Revenue Fund, but will reduce deposits to the Seniors Home and Community Based Service Fund by $10 Million.
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 |
14,600,000 |
14,600,000 |
Explanation of above estimates (including long-range effect):
This bill creates an additional $24.6 Million to SELRF deposits, but reduces deposits to the Seniors Home and Community based service fund by $10 Million. Therefore, the net impact is $14.6 Million to the State.
Memorandum
House Bill 4702 decouples thoroughbred and greyhound racing in the State of West Virginia by allowing thoroughbred and greyhound tracks to maintain a video lottery license without the necessity of a current racing license. Furthermore, HB4702 abolishes both the West Virginia Thoroughbred Development Fund and the West Virginia Greyhound Breeding Development Fund thus eliminating any incentive for future investments and growth in the breeding industries in West Virginia. The loss of breeding industries in West Virginia could have a substantial negative impact on the economic outlook in the counties which currently host and benefit from live thoroughbred and greyhound racing.
Additionally, the bill eliminates the statutory flow of monies into the purse funds that are utilized by the tracks from which prizes or purses are paid to successful racing participants. The uncertainty created in a business model which would predicate the availability of purse fund monies on an annual appropriation by the Legislature -- which could vary widely from year to year -- could negatively impact investments in the industry and the breeding of West Virginia-bred greyhounds and thoroughbreds that are necessary to sustain live racing.
Although, HB4702 does not preclude the racetracks from conducting thoroughbred or greyhound racing, the bill’s elimination of monies going into the purse and the development funds, will likely result in a severe curtailment in the amount of racing, if any, that occurs. As a result of the elimination of the statutory flow of monies into the purse funds, it is anticipated that West Virginia will experience a steep decline in the number of live race days requested by the racetracks. A decline in live race days is not only likely to have a negative impact on the economic outlook of the affected counties through a loss of employment for racing participants and a resulting loss of sales and income tax revenue to the State, it will also result in a direct decline in the administrative funds that the Racing Commission receives to regulate racing. Within the time frame provided to submit this fiscal note, the Racing Commission lacks the capacity to provide lost revenue estimates due to the negative economics associated with the severe curtailment of live racing.
Requiring the WV Racing Commission to continue to regulate thoroughbred and greyhound racing without the necessary administrative funding from the development funds and pari-mutuel wagering activity would place a severe burden on the State to fulfill its regulatory function. The Commission currently expends approximately $3,500,000 annually to regulate thoroughbred and greyhound racing and there would likely be very little revenue associated with the activity to cover this cost, if this bill passes. As such, the Racing Commission would likely be out of funds within one fiscal year and would require an annual appropriation by the Legislature to continue its regulatory duties over any pari-mutuel wagering activity resulting from live and/or simulcast racing activity in West Virginia. Therefore, the current model associated with this bill does not adequately provide for the necessary funds that the State requires to regulate this gambling activity.
Person submitting Fiscal Note: Joe Moore, Executive Director
Email Address: Joe.K.Moore@wv.gov