The 41st-largest state in America — admitted to the United States in 1863 upon secession from Virginia at the beginning of the American Civil War in 1861 — encompasses the Appalachians and the Upper South of the Southeastern United States. It borders Pennsylvania to the north, Maryland to the east, Virginia to the east and south-east, Kentucky to the west, and Ohio to the north-west.
West Virginia is rich in natural resources thus the leading industries include energy, biotech, chemicals, automotive, and aerospace verticals while healthcare, education, steel production, telecommunication, manufacturing, and media contribute to a state gross product close to $310 billion, which equaled to 0.4% of the United States’ overall GDP in 2018.
The Mountain State and gambling regulations go way back.
Pari-mutuel wagering on horse races was legalized in 1933; the lottery was established in 1984 and VLTs (Video Lottery Terminals) in 1994 after the state referendum was conducted in both instances. In 2007, the state allowed table games on the racetracks.
Following the SCOTUS’ repeal of the PASPA in 2018, West Virginia was one of the first states to legalize land-based and interactive sports wagering.
In March 2019, state legislators passed the law which authorizes four states’ racinos to offer on-premises online gambling.
Legal Framework
Several laws regulate the gaming market; they range from the West Virginia State Code (Chapter 29) to legislations that cover each gaming vertical in detail.
Most interesting ones to the iGaming industry are:
- SB415, which authorized online sports betting
- HB2178, which allowed the single brick-and-mortar casino in the state to offer an interactive gambling
- HB2934, which legalized online gambling operations by four racinos.
The most significant peculiarity of HB2178 and HB2934 is that they do not legalize online gambling on offshore sites. Instead, online table games and slots are allowed to be played only at land-based premises.
The gambling age limits are 18 (for bingo, offline or online) and 21 years of age (for any type of lottery, sports betting, casino games or iGaming).
Gambling winnings are not taxed except for lottery (prizes over $5,000 are subject to 24% of federal tax and 6.5% of the state tax), sports betting (taxed at 10% of gross wins), and online gambling (15% of all winnings).
Operators are taxed at a progressive rate from 35% up to 49% gross gaming revenue.
Licensing
There are three key state regulators in charge of governing gambling ecosystem in the state: West Virginia Racing Commission, West Virginia Charitable Organizations Commission, and West Virginia Lottery Commission (WVLC). Online gambling licensing falls under the umbrella of the latter.
Considering that iGaming is completely related to land-based facilities, there are two types of permits:
- Table Games Supplier License, for vendors that provide gaming devices and paraphernalia
- Occupational License, for key-professionals employed by casinos and racinos.
To attain Table Games Supplier License, companies are obliged to provide myriad information about business nature of operations, list of investors and ownership interests (including articles of incorporation), gambling goods and services provided, detailed financial statements in the past five years (tax returns, debt, insolvency, and bankruptcy history), criminal record and civil litigation history, estimated annual volume of business, list of financial institutions that handle business accounts, key persons’ identities, history of former businesses conducted, copies of all existing gaming licenses and certificate of insurance.
If approved, a corporate supplier license is valid for one year. The application fee is $100.
Certain individuals employed by operators — officers, directors, managers, and persons that hold more than 1% of interest — must possess an Occupational License.
To attain it, employees go through a lengthy process which includes a detailed overview of personal information (ID, residence, citizenship, military service background, education), occupational and employment history, current professional licensing, criminal and civil suit history, and detailed financial statements.
In case the Occupational License application is denied, the applicant has to wait a year before it can resubmit.
Also, each game used at casinos and racinos has to be approved by the WVLC, although the regulatory body has a discretionary power to accept approvals from other jurisdictions.
However…
…to be eligible to offer online gambling and interactive sports wagering services, operators have to pay additional annual fees of $250,000 for licenses, $100,000 for renewals (every five years), $100,000 for management services provider option (this one is for existing racinos and one casino), and $10,000 for interactive supplier license.
Players’ Protection
Since West Virginia’s online gambling regulations are still young, the scope of patrons’ protection in the interactive arena is yet to be fully formed; it’s expected to be announced in 2020.
On the other hand, in the land-based segment, the Mountain State utilizes several initiatives such as the Problem Gamblers Help Network of West Virginia and a couple of free problem gambling helplines.
Also, all racinos governed by the West Virginia Racing Commission apply a set of policies and guidelines in line with the American Gaming Association’s Code of Conduct for Responsible Gaming.
Considering a limited volume of operators that can offer online gambling for now — five in all — it might be safe to assume that players’ protection will be on par with criteria that offer an efficient resolution of patrons’ grievances, transparent supervision of operators’ practices, and overall well-being and sustainable growth of the market.
Final Notes
West Virginia has a reputation of a healthy state and a good place for living in terms of opportunities, fiscal stability, and natural environment, thus the newest gambling legalization could provide for an additional resource of the state budget revenue and could impact the state’s tourism sector for better.
Of course, the effective launch of online gambling operations correlates to the process of finalizing the complete online gambling framework, set to be released in 2020.
Therefore, to make a final call, we will have to wait a little bit more.
Meanwhile, if you’re West Virginian, remember that offshore operators are off-limits. As always, responsibly approach your gambling proclivities and have good luck!
Further Reading
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