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Numbers show declining interest in greyhound racing

CHARLESTON — The number of in-person wagers at West Virginia’s two greyhound racing casinos has steadily gone down over the last five years as well as tax revenue, causing the president of the West Virginia Senate to again look at eliminating what some call a $15 million subsidy to the industry.

According to the West Virginia Racing Commission, Wheeling Island Casino in Ohio County and Mardi Gras Casino in Kanawha County saw a 13-percent drop in live in-person wagers on races between 2014 and 2018.

Wheeling Island, which brings in more wagers than Mardi Gras, brought in $10.1 million in 2018 from in-person wagers for races at the track, a 9-percent drop from 2014, when the track brought in $11.2 million from live wagers. For Mardi Gras, live wagers dropped from $4.1 million in 2014 to $3.12 million in 2018, a 24-percent drop.

“This is a depression-era industry that happens to still exist today and is not economically viable,” said Carey Theil, executive of GREY2K, which recently unveiled greyhoundracingfacts.org to advocate for the ending of greyhound racing in West Virginia.

“It is dying all over the country,” Theil said. “Racetracks are losing money on dog racing all over the country.”

In contrast, the total handle – the money generated for greyhound racing – has increased over the same five-year time span.

Between 2014 and 2018, the total handle produced by the two greyhound casinos increased by 19 percent, from $105.8 million in 2014 to $126.3 million in 2018.

Most of the increase has come from the export handle – the number of wagers by out-of-state betters on greyhound races in West Virginia. The export handle made up 78 percent of the total handle for Wheeling Island and Mardi Gras in 2018.

The export handle increased by 43 percent between 2014 and 2018 at Wheeling Island, from $44.3 million in 2014 to $63.4 million in 2018. Mardi Gras saw its export handle increase by 15 percent during the same period, from $31 million in 2014 to $35.8 million in 2018.

During the same five-year time frame, three states have done away with greyhound racing, causing betters to find other tracks to place their bets. Colorado eliminated greyhound racing in 2010, followed by Arizona in 2016. The most recent state to eliminate greyhound racing was Florida by amendment vote in 2018, which goes into effect in 2020. So far, 41 states have banned greyhound racing, leaving six tracks left in the U.S. with two of those in West Virginia.

Despite the overall increase in total handle, it has not spelled additional revenue for the state. The state’s share of the greyhound handle dropped by 10 percent over five years, from $1 million in 2014 to $927,707 in 2018. That money goes to the West Virginia Racing Commission, which provides regulatory oversight of both horse and greyhound racing.

GREYHOUND RACING: A HISTORY

The modern West Virginia casino is the result of two bills: The Racetrack Video Lottery Act passed in 1994, and the Lottery Racetrack Table Games Act passed in 2007. The first act allowed the horse and greyhound tracks to offer video lottery terminals, while the second act allowed the tracks to offer table games, such as poker and blackjack. By law, casinos in West Virginia must offer live racing in order to have video lottery or table games.

The purses – the prize money – for winning races are generated from three sources: a percentage from the wagers placed, a percentage of Video Lottery revenue, and a percentage of table games revenue.

According to a 2015 study of the greyhound racing industry for the state Department of Revenue by Spectrum Gaming Group, the percentage of revenue collected from video lottery and table games – also called casino supplements – accounted for 95 percent of purse awards in 2015. Video Lottery makes up the vast majority supplements.

“Purses were originally funded exclusively through live handle, but casino supplements have become the dominant source of funding,” the report stated. “With the steep decline in greyhound handle, the State is getting close to operating at a deficit; i.e., greyhound racing is not generating enough revenue to cover the racing commission’s cost of regulating it.”

The Video Lottery payments – roughly 10 percent of gross gaming revenue – are made to the West Virginia Lottery Commission by Wheeling Island and Mardi Gras. The commission transfers that revenue to the purse accounts at both casinos and the Racing Commission. Today, the amount transferred is approximately $15 million.

“Greyhound racing in West Virginia cannot exist without this $15 million subsidy,” Theil said. “Those funds should be used for other important state programs, like education and repairing roads.”

The Legislature tried to eliminate the $15 million payments, which some have called subsidies, in 2017 with the passage of Senate Bill 437. The bill would transfer the $15 million to the Excess Lottery Revenue Fund for distribution by the Legislature and eliminated the requirement for Wheeling Island and Mardi Gras to offer greyhound racing, with some money going to greyhound adoption programs.

Gov. Jim Justice vetoed that bill, raising concerns about possible job losses at the greyhound tracks. The West Virginia Kennel Owners Association estimates that 1,700 direct and indirect jobs would be affected by taking away the $15 million, though the 2015 Spectrum report estimated that only 618 jobs would be affected if the greyhound tracks closed down.

“We question whether it is good public policy for one industry to subsidize another in the manner that the casino industry is subsidizing the greyhound industry,” stated the Spectrum report. “With increased casino competition from other states, (gross gaming revenue) in West Virginia has been meaningfully reduced. As such, it is proper to ask whether the casinos can afford to continue to do so.”

Senate President Mitch Carmichael, R-Jackson, said he plans to introduce a bill similar to the 2017 bill to eliminate the $15 million transfer from Video Lottery to greyhound racing purses and bring that money back to state coffers during the 2020 legislative session.

Delegate Erikka Storch, R-Ohio, president of the Wheeling Area Chamber of Commerce, said she wished Carmichael had approached Northern Panhandle lawmakers first, who could have explained the major economic impact removing that $15 million from the greyhound tracks would have on the area.

“I just don’t understand why we have to go back and try to cause damage to communities that are largely reliant on the jobs within those communities and why we keep wanting to create an environment of uncertainty for the industry participants,” Storch said. “I can’t even imagine owning a kennel or being a breeder and having the games that are played by the legislature every year trying to get monies that aren’t even theirs.”

Storch said with the recent job losses at the Ohio Valley Medical Center, the loss of as much as 1,100 jobs related to the greyhound industry in the Wheeling area would be devastating. The limiting of traffic as construction begins on Interstate 70 and the closing Friday of the Wheeling Suspension Bridge to vehicle traffic could also cause financial hardship for the casino. The bill last year that would have allowed Wheeling island to open a satellite facility at the Highlands failed.

Storch also pushed back on the idea that the $15 million is a subsidy, noting that the money generated is done inside the casino and ultimately helps the entire casino.”

“If you want to call it a subsidy, it’s a gambler subsidy,” Storch said. “Whether they’re putting the money in the machines or putting the money down on the table, they know that a portion of that is going to the fund that was created.”

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