State racetrack casinos head to battle
Lottery officials say the battle is on to preserve the money flowing from out of state to West Virginia's racetrack casinos.
The state's four casinos have been bracing for competition from fledgling operations in Ohio, Pennsylvania and Maryland.
The West Virginia gambling complexes had been fortunate so far this year because some casino openings in Ohio were delayed.
The delays caused state government revenue from racetrack video lottery and table games to come in above expectations early in the fiscal year that started July 1.
"We have been blessed over the last few months to have been operating in a positive light in comparison to our forecasts," said Jim Toney, finance director of the West Virginia Lottery, on Tuesday.
But in recent weeks, the Lottery has been hit with a double-whammy.
Competition is now taking its toll.
"We're already seeing the impact of Ohio and Maryland on our revenue stream," Lottery Director John Musgrave said.
"We have noticed in recent days a narrowing of the competitive environment, so we're getting in the battle now," Toney said.
The other hit came on Nov. 6, when Maryland voters approved a ballot initiative legalizing table games and new casino construction in that state.
Maryland casinos already had video lottery machines, but without table games those casinos found it hard to compete with Charles Town's Hollywood Casino.
Legalizing table games now levels the playing field.
Since the Charles Town casino pulls in more revenue than all other state casinos combined, and one-third of its customers come from Maryland, lottery officials worry about the impact of Maryland table games.
Musgrave said the state should start seeing the effect in about six months.
"It usually takes about five to six months to implement something like that and get dealers trained and get tables set up," he said.
Lottery officials have said they will do everything they can to preserve the state's casino industry and the revenue it generates for state government. But they say it is still too early to gauge what impact the new competition will have.
While they are concerned, Lottery officials did report positive revenue results for October on Tuesday.
The Lottery brought in more than $105 million in revenue last month, about $3 million more than forecast.
Racetrack video lottery came in more than $5 million ahead of expectations, while table game revenue of $5.6 million was about $300,000 less than forecast.
Since the Lottery's fiscal year began on July 1, casinos and retailers have brought in nearly $449 million in state revenue, nearly $55 million more than the $394 million officials had expected by this point.
Contact writer Jared Hunt at firstname.lastname@example.org or 304-348-5148.