West Virginia Postcard

Online Poker Legalized in West Virginia

On Wednesday, West Virginia became the fifth state in the U.S. to legalize online gambling, following a process in which House Bill 2934 flew through the state legislature. The bill was not signed by Governor Jim Justice, but that did not matter, as his inaction made the bill law by default. The law legalizes both online casinos and online poker; sports betting was legalized last year.

Poker Bill, EZ Game

West Virginia SealHB 2934 was introduced by sponsor Delegate Jason Barrett (D-Berkeley, 61) on February 8th, to give you an idea of how fast it moved. Two weeks later, it passed the state House of Delegates by a vote of 72-22 and then the Senate by a 26-7 vote on March 8th. The next day, the House reaffirmed the bill, approving the Senate’s amendments, 78-18.

“I’m not surprised that we got it passed. I’m surprised that it sailed through as easily as it did,” Delegate Barrett told West Virginia’s MetroNews.

From there, Governor Justice had 15 days – not counting Sundays – to either sign or veto the bill. He did neither by the deadline, which means that the bill automatically became law. Hooray for inertia!

The West Virginia Lottery is in charge of setting up online gambling regulations, but the deadline for it to do so, as well as establish the procedures for licensing operators, is not until June of next year. After that, licensing applications will still need to be submitted, reviewed, and approved, and operators would still need to actually setup their sites, hopefully with rigorous and time-consuming testing. Thus, it would be more than optimistic to think that any online poker sites would be up and running before the end of 2020. I would look to 2021 as a more realistic target.

June 2020 for the regulations deadline may seem way too long, considering we are still in March 2019, but Barrett said that the Lottery asked for a longer deadline and he was happy to grant wishes in order to improve his bill’s chances.

“I wanted to make sure that it was something they were agreeable to and comfortable with so, for that reason, I don’t anticipate a veto (from Governor Justice),” Barrett told MetroNews earlier this month. “We kind of brought everybody to the table to make sure operators were on board, to make sure the Lottery was on board and that we could get the votes in the Legislature as well.”

Law Looks Solid, Unremarkable

If you are familiar with online gambling legislation in other states, nothing should surprise you in that of West Virginia. The five existing land-based casinos are the operators who will be permitted to apply for online gaming licenses:

Hollywood Casino at Charles Town Races
Mardi Gras Casino & Resort
Mountaineer Casino, Racetrack & Resort
The Casino Club at The Greenbrier
Wheeling Island Hotel

Five-year licenses will cost $250,000 each at the outset, with five-year renewals carrying a price tag of $100,000. The tax on internet gaming revenue will be 15 percent, a fairly reasonable figure compared to other states.

Barrett thinks online poker and online blackjack will be the top draws, though as we have seen elsewhere, online casino games in general severely outpace poker in terms of revenue generation. I, personally, would expect online slots and video poker to do well, these require much less skill than standard poker and are therefore attractive to casual internet gamblers who just want a little wagering entertainment at home without having to think too hard. They are also games that are a lot easier to jump in and out off than poker.

Barrett’s goal, in addition to bringing in revenue to the state, is to protect players.

“Right now, online poker is illegal and it’s being done overseas and there are certainly some concerns there with the integrity of the games as well as making sure players are paid because it’s (currently) completely unregulated being offshore,” he said.

One aspect of the new law that people in the online poker community will probably like is that there is no “bad actor” clause, a clause that some lawmakers have put into/tried to put into other bills to keep out operators who offered games to people in the U.S. after the UIGEA passed in 2006. One can argue about the validity of punishing such operators by not allowing them into a regulated market more than a decade later, but bad actor clauses tend to exist to keep PokerStars out in order to protect local operators from strong competition. Thus, bad actor clauses are typically bullshit.

Now, international gaming operators like PokerStars and others will not be able to obtain an online gaming license in West Virginia as the primary operator because those will go to the brick-and-mortar casinos, but look for them to partner with the casinos to provide their software, as has happened in other states.

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