FISCAL NOTE

Date Requested: January 15, 2018
Time Requested: 02:16 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
1358 Introduced SB106
CBD Subject: Legal Gaming


FUND(S):

General Revenue Fund, Special Fund

Sources of Revenue:

General Fund Sports Betting Special Revneue Fund

Legislation creates:

Creates New Revenue, Increases Revenue From Existing Sources, Creates New Fund: Sports Betting Special Revenue Fund



Fiscal Note Summary


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


    The stated purpose of this bill is to allow sports betting at West Virginia casinos; the state Lottery Commission is authorized to promulgate legislatives rule establishing sports betting and provides a legislative finding that federal government has no authority to prohibit sports betting in West Virginia; providing for a tax on bets and a special revenue account; and allowing incorporation of current laws and the promulgation of further requirements and fees for sports betting by legislative rule.
    
    According to our interpretation, the proposed bill would legalize pooled sports betting in casinos in West Virginia and would impose a 2 percent tax on wagers placed on such activities for the benefit of the Sports Betting Special Revenue Fund created in the bill. It is estimated that legalization of such activities could generate up to $16.0 million for the Fund per year. Timing of when these revenues could begin to be realized, however, depends on federal legalization of this activity. In addition, it is plausible that the proposed bill would have some positive impact on other General Revenue Fund sources – such as Consumer Sales Tax and Personal Income Tax – assuming that legalizing such activities would create jobs and draw out-of-state patrons into the State to engage in pooled sports betting activities. The magnitude of this impact cannot be determined without additional information as to how consumer behavior may be affected by the proposed legislation.
    
    Sports betting is generally illegal after passage of the federal Professional and Amateur Sports Protection Act of 1992 (PASPA). Only a few states, such as Nevada, Montana, Oregon, and Delaware, have legalized sports betting per an exemption provided in the PASPA. In the last year, Maryland introduced a bill to legalize sports betting and Pennsylvania passed legislation to legalize with the provision that such law would only go into effect if in accordance with federal Law. We note that Christie v. National Collegiate Athletic Association (NCAA) is currently pending in the U.S. Supreme Court.
    
    As it appears the proposed tax on wagers would be administered by the West Virginia Lottery, there would be no additional administrative costs incurred by the State Tax Department.
    
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2018
Increase/Decrease
(use"-")
2019
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 16,000,000


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


    According to our interpretation, the proposed bill would legalize pooled sports betting in casinos in West Virginia and would impose a 2 percent tax on wagers placed on such activities for the benefit of the Sports Betting Special Revenue Fund created in the bill. It is estimated that legalization of such activities could generate up to $16.0 million for the Fund per year. Timing of when these revenues could begin to be realized, however, depends on federal legalization of this activity. In addition, it is plausible that the proposed bill would have some positive impact on other General Revenue Fund sources – such as Consumer Sales Tax and Personal Income Tax – assuming that legalizing such activities would create jobs and draw out-of-state patrons into the State to engage in pooled sports betting activities. The magnitude of this impact cannot be determined without additional information as to how consumer behavior may be affected by the proposed legislation.
    
    Sports betting is generally illegal after passage of the federal Professional and Amateur Sports Protection Act of 1992 (PASPA). Only a few states, such as Nevada, have legalized sports betting. In the last year, Maryland introduced a bill to legalize sports betting and Pennsylvania passed legislation to legalize with the provision that such law would only go into effect if in accordance with federal Law. We note that Christie v. National Collegiate Athletic Association (NCAA) is currently pending in the U.S. Supreme Court.
    
     
    As it appears the proposed tax on wagers would be administered by the West Virginia Lottery, there would be no additional administrative costs incurred by the State Tax Department.
    



Memorandum


    



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov