NEW CUMBERLAND - Hancock County government and horse racing officials continued their attack Thursday on a bill pending in the West Virginia Legislature that would cut local appropriations of video lottery revenue by 15 percent.
House Bill 4333, introduced Jan. 24 at the behest of Gov. Earl Ray Tomblin as a way to address a state budget deficit, would reduce certain racetrack video lottery and limited video lottery net terminal income distributions by 15 percent - a change that could affect everything from the thoroughbred purse fund at Mountaineer Casino, Racetrack & Resort to the Hancock County commissioners' annual budget.
On Thursday, two local horse racing officials - Mountaineer Park Horsemen's Benevolent and Protective Association President John W. Baird and Executive Director Jana Tetrault - sounded the alarm before commissioners, who said they share their concerns.
Both the horse racing industry in Hancock County and city and county government funds stand to suffer, officials said, if they lose 15 percent of the statutorily-required subsidies that come from West Virginia Lottery revenue - whether from limited video lottery cafes or casino slot machines.
Commissioner Dan Greathouse said the percentages were built into the original video lottery legislation years ago, and "now they want to change the rules on us."
Two percent of the revenue from the video lottery machines at Mountaineer goes to Hancock County commissioners, who use the money for public safety expenditures and special projects. Commissioners also share a portion of those profits with the county's three cities - Chester, New Cumberland, Weirton - on a per capita basis. Since 2002, commissioners have distributed $7.6 million in video lottery revenue to the three cities, Greathouse said.
The Mountaineer Park Horsemen's Benevolent and Protective Association oppose House Bill 4333, citing the following statistics they say will hurt horse racing and the economy in Hancock County:
Thoroughbred racing contributes an estimated $93.3 million in total business volume (direct and indirect) to Hancock County's economy.
Racing employs (directly and indirectly) 1,899 people in Hancock County.
Racing generates $31.8 million in total employee compensation (direct and indirect) in Hancock County.
An estimated 15 percent of all the jobs in Hancock County are connected, directly or indirectly, to thoroughbred racing at Mountaineer Casino, Racetrack & Resort.
Source: "The Economic Impact of the Thoroughbred and Greyhound Racing Industries on West Virginia's Economy 2012," West Virginia University College of Business and Economics, Bureau of Business and Economic Research
Commissioner Mike Swartzmiller said the pending legislation could cost Hancock County an estimated $500,000 a year - roughly 5 percent of the county's annual budget. The three cities' annual allocations - $450,000 for Weirton, $140,000 for Chester, $110,000 for New Cumberland - would have to be cut if the county's portion dipped below $2.8 million, he said.
Annual video lottery revenues from Mountaineer to the county have dropped from $5.2 million in 2007 to $3 million in the current fiscal year - largely because of increasing competition from surrounding states that have legalized gambling, Swartzmiller said.
Cuts by the state Legislature would only increase the financial hardship, he said.
"We're the ones that are going to feel the pain. They're cutting our fingers off," Swartzmiller said.
The proposed cuts are especially "devastating" for Hancock County and the other West Virginia counties that have racetracks - Wheeling Island Hotel-Casino-Racetrack (greyhound), Hollywood Casino at Charles Town Races (thoroughbred) and Mardi Gras Casino and Resort (greyhound), Greathouse said.
Over the years, because of the falloff in pari-mutuel betting purses, Mountaineer and the state's other racetracks have become more dependent on revenue from video lottery terminals and table games, which were introduced in 2007.
However, those revenues have dropped by close to 30 percent since their peak in 2005, according to a new study by the West Virginia University College of Business and Economics. What's more, the WVU study found that, accounting for inflation, the total pari-mutuel betting handle fell by about a third from its peak in 2004 to 2012.
Baird and Tetrault said they also are concerned about the impact that a new racetrack casino in Austintown, Ohio, opening this fall, will have on Mountaineer. They predict a 20 to 30 percent decline in revenue as a result of competition that's "just an hour's drive on state Route 11," Tetrault said.
"The 15 percent of residents in Hancock County who work in the racing industry cannot survive this decline in revenue," she said.
The HBPA's Baird and Commissioner Jeff Davis were among those who testified on HB 4333 in a hearing Tuesday in the state House of Delegates chamber.
"I hope our message continues to be heard loud and clear in Charleston," Davis said.
Delegate Randy Swartzmiller, D-Hancock, said he's opposed to the legislation as it's currently written.
"It either takes from the track administration or the horsemen on the backside, or it takes from the county and the cities," he said. "I'm not going to support something that takes money from our folks up there. I understand what the governor's trying to do, which is trying to fill holes in our state budget, but you can't expect me to support something that's going to hurt my area."
Swartzmiller, who also is speaker pro tempore, said he will do all he can as part of the House leadership to make sure HB 4333 "just sits there."