But record year could be jeopardized if Pa., Md. legalize slots
May was a record sales month in what will be a record year for the West Virginia Lottery, with profits to the state topping the half-billion-dollar mark.
However, Lottery Director John Musgrave warned Tuesday that the lotterys halcyon days could be over possibly as early as today with the imminent legalization of video slots in Pennsylvania.
That will certainly affect our net [income] and our play in West Virginia, Musgrave said of the agreement to legalize as many as 61,000 video slot machines at 14 locations in Pennsylvania.
Pennsylvanias action was not unexpected. West Virginias 2004-05 state budget accounts for a projected $38 million drop in state lottery profits, based on the assumption that one or more neighboring states would have video slots up and running by January 2005.
That estimate, made in January, appears to be on the mark. Musgrave said that if Pennsylvania legalizes video slots this week, as anticipated, it will take about six months to get the first sites operational.
Its not as simple as taking a building and putting machines in it, he said. We think that it will take six months and possibly longer.
Musgrave said Pennsylvania officials have already visited Lottery headquarters to see how West Virginias video lottery system works. All 17,423 video lottery terminals operating in West Virginia are controlled by a central computer at Lottery headquarters.
He said the Lottery has also had discussions with Maryland officials about video slots there.
We expect if Pennsylvania passes a video lottery bill, then Maryland wont be far behind, he said. That is looming.
Pennsylvanias legalization is expected to hurt revenue at the two Northern Panhandle racetracks, Mountaineer and Wheeling Downs, while Maryland slots would cost Charles Town Races business, he said.
For now, though, the lottery continues to set revenue records.
Overall sales in May topped $119 million, with a record $79.5 million in racetrack video lottery revenue, and $22.13 million from limited video in 1,490 bars and clubs around the state.
While racetracks reported a record month for profits in May, limited video was down slightly for the month, compared to April.
Lottery Deputy Director Virgil Helton said that reflects expected seasonal trends: Attendance at the racetracks increases in warm-weather months, while it decreases in bars and clubs.
For the 2003-04 budget year, which ends today, the lottery is on pace to top $1.3 billion in total revenue, with the states profit topping $500 million.
For the first 11 months of the budget year, racetrack and limited video slots players have played a total of $11.42 billion in credits, collected $10.41 billion in winnings, leaving $1.01 billion in revenue. The states share of those profits, year to date, is $407 million.
By comparison, traditional instant and online games have had year-to-date sales of $190 million, and have paid out $114 million in winnings.
Also during Tuesdays Lottery Commission meeting:
Lottery counsel John Melton said hes hopeful the state Supreme Court will hear the Lotterys appeal of a Kanawha Circuit Court decision barring the Lottery from moving its headquarters outside of Charleston early in September.
In April, Kanawha Circuit Judge Irene Berger ruled that a planned relocation of Lottery headquarters to Putnam County was unconstitutional, since the state constitution requires state agencies to maintain their principal offices in Charleston.
The Lottery completed the transfer of $1.5 million to the state Problem Gamblers Network for advertising and promotion of the networks toll-free hot line.
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