FISCAL NOTE
Date Requested: February 23, 2026
Time Requested: 08:33 AM |
| Agency: |
Lottery Commission, WV |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1576 |
Revised |
HB5464 |
|
|---|
| CBD Subject: |
Legal Gaming |
|---|
|
FUND(S):
State Excess Lottery Fund, State Lottery Fund, Lottery Administration Fund
Sources of Revenue:
Special Fund
Legislation creates:
Decreases Existing Revenue
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
Methodology and Inflation Assumption:
The bill does not specify the methodology for calculating cumulative inflation applicable to Racetrack Video Lottery (RVL) Gross Terminal Revenue (GTR) Benchmarks 2 and 3 for the period June 30, 2001, through June 30, 2026. For purposes of this fiscal estimate, cumulative inflation was calculated using the Consumer Price Index (CPI) published by the U.S. Bureau of Labor Statistics.
Based on the most recent available data (through 2025), cumulative inflation from June 30, 2001, through June 30, 2025, is approximately 83 percent. This 83 percent factor was applied in estimating the bill’s fiscal impact.
Fiscal Impact Summary:
Application of the 83 percent cumulative inflation adjustment to all four racetracks is projected to result in a net loss of approximately $9.9 million to the State in FY27.
In subsequent fiscal years, the fiscal impact is expected to remain significant but will vary depending on:
• The applicable annual inflation rate, and
• Each racetrack’s actual Gross Terminal Revenue (GTR).
In addition to the direct revenue impact, the bill redistributes revenues between the Lottery Fund and the Excess Lottery Fund. This redistribution is projected to significantly affect the debt service coverage ratios for bonds backed by the Excess Lottery Fund. A measurable reduction in debt service coverage would negatively affect the credit rating of outstanding bonds and may increase interest costs on future bond issuances, resulting in additional long-term costs to the State.
Impact on Excess Lottery Fund:
The Excess Lottery Fund is projected to decrease by $46.7 million, allocated as follows:
• $32.3 million shifted to the Lottery Fund
• $4.4 million shifted to the Administrative Fund
Breakdown of the $9.9 Million Net State Revenue Loss:
The estimated $9.9 million net loss to the State in FY27 is attributable to the following changes:
• Racetrack Commissions — Increase of $9,300,000
• Capital Reinvestment Funds — Decrease of $4,000,000
• Payments to Purse Funds — Increase of $3,600,000
• Payments to Development Funds — Increase of $161,000
• Payments to Pension Funds — Increase of $592,000
• Payments to Municipalities — Increase of $215,000
Collectively, these changes reduce the revenue available to the State, resulting in an estimated $9.9 million net fiscal impact.
Reallocation Between Development Funds:
The bill also reallocates revenues from the Greyhound Development Fund to the Thoroughbred Development Fund. This change does not affect total State revenues and, therefore, is not reflected in the fiscal impact table. However, it results in a redistribution of funds between the two development funds.
Based on FY27 projections, approximately $1.5 million that would otherwise have been allocated to the Greyhound Development Fund is expected to be redirected to the Thoroughbred Development Fund.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2026
Increase/Decrease
(use"-") |
2027
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 |
-9,900,000 |
0 |
Explanation of above estimates (including long-range effect):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
See Summary/Memorandum
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
Methodology and Inflation Assumption:
The bill does not specify the methodology for calculating cumulative inflation applicable to Racetrack Video Lottery (RVL) Gross Terminal Revenue (GTR) Benchmarks 2 and 3 for the period June 30, 2001, through June 30, 2026. For purposes of this fiscal estimate, cumulative inflation was calculated using the Consumer Price Index (CPI) published by the U.S. Bureau of Labor Statistics.
Based on the most recent available data (through 2025), cumulative inflation from June 30, 2001, through June 30, 2025, is approximately 83 percent. This 83 percent factor was applied in estimating the bill’s fiscal impact.
Fiscal Impact Summary:
Application of the 83 percent cumulative inflation adjustment to all four racetracks is projected to result in a net loss of approximately $9.9 million to the State in FY27.
In subsequent fiscal years, the fiscal impact is expected to remain significant but will vary depending on:
• The applicable annual inflation rate, and
• Each racetrack’s actual Gross Terminal Revenue (GTR).
In addition to the direct revenue impact, the bill redistributes revenues between the Lottery Fund and the Excess Lottery Fund. This redistribution is projected to significantly affect the debt service coverage ratios for bonds backed by the Excess Lottery Fund. A measurable reduction in debt service coverage would negatively affect the credit rating of outstanding bonds and may increase interest costs on future bond issuances, resulting in additional long-term costs to the State.
Impact on Excess Lottery Fund:
The Excess Lottery Fund is projected to decrease by $46.7 million, allocated as follows:
• $32.3 million shifted to the Lottery Fund
• $4.4 million shifted to the Administrative Fund
Breakdown of the $9.9 Million Net State Revenue Loss:
The estimated $9.9 million net loss to the State in FY27 is attributable to the following changes:
• Racetrack Commissions — Increase of $9,300,000
• Capital Reinvestment Funds — Decrease of $4,000,000
• Payments to Purse Funds — Increase of $3,600,000
• Payments to Development Funds — Increase of $161,000
• Payments to Pension Funds — Increase of $592,000
• Payments to Municipalities — Increase of $215,000
Collectively, these changes reduce the revenue available to the State, resulting in an estimated $9.9 million net fiscal impact.
Reallocation Between Development Funds:
The bill also reallocates revenues from the Greyhound Development Fund to the Thoroughbred Development Fund. This change does not affect total State revenues and, therefore, is not reflected in the fiscal impact table. However, it results in a redistribution of funds between the two development funds.
Based on FY27 projections, approximately $1.5 million that would otherwise have been allocated to the Greyhound Development Fund is expected to be redirected to the Thoroughbred Development Fund.
Person submitting Fiscal Note: June Somerville
Email Address: jsomerville@wvlottery.com