Bill Text: WV SB788 | 2020 | Regular Session | Introduced


Bill Title: Permitting wagering on certain professional or collegiate sporting events

Spectrum: Bipartisan Bill

Status: (Introduced) 2020-02-14 - To Finance [SB788 Detail]

Download: West_Virginia-2020-SB788-Introduced.html

FISCAL NOTEWEST virginia legislature

2020 regular session

Introduced

Senate Bill 788

By Senators Tarr, Ihlenfeld, and Maroney

[Introduced February 14, 2020; referred
to the Committee on Finance]

A BILL to amend and reenact §29-22D-2, §29-22D-3, §29-22D-5, §29-22D-7, §29-22D-8, §29-22D-11, §29-22D-12, §29-22D-16, §29-22D-17, §29-22D-20, §29-22D-21, and §29-22D-22 of the Code of West Virginia, 1931, as amended; and to amend said code by adding thereto two new sections, designated §29-22D-6a and §29-22D-15a, all relating to permitting wagering on the results of certain professional or collegiate sports or athletic events and other events authorized as West Virginia Lottery sports wagering activities; providing legislative findings; defining terms; establishing license requirements and prohibitions; adopting house rules and the posting of the same; defining duties of a social sports wagering operator conducting social sports wagering; requiring the posting of betting limits; prohibiting unauthorized sports wagering in this state; creating the West Virginia Lottery Sports Wagering Fund; authorizing the collection of license fees; authorizing the West Virginia Lottery to collect an administrative allowance from gross sports wagering receipts; authorizing the West Virginia Lottery to levy and collect a tax in the amount of 10 percent of adjusted gross sports wagering receipts; defining how moneys deposited in the West Virginia Lottery Sports Wagering Fund shall be distributed; establishing the role of law enforcement; imposing civil and criminal penalties; establishing crimes; providing for the forfeiture of property for certain violations; and preempting this article from state and local law.

Be it enacted by the Legislature of West Virginia:


ARTICLE 22D. WEST VIRGINIA LOTTERY SPORTS WAGERING ACT.


§29-22D-2. State authorization of sports wagering at licensed racetrack facilities and historic resort hotel; legislative findings and declarations.


(a) Operation of West Virginia Lottery sports wagering. — Notwithstanding any provision of law to the contrary, the operation of sports wagering and ancillary activities are only lawful when conducted in accordance with the provisions of this article and rules of the commission.

(b) Legislative findings. —

(1) The Legislature finds that the operation of the four racetracks and the historic resort hotel in this state play hospitality industry plays a critical role in the economy of this state, and such constitutional lotteries are rightfully authorized as state enterprises consistent with the rights and powers granted to the states under the Tenth Amendment of the United States Constitution. The federal government is a government of limited and enumerated powers, and powers not delegated to the United States by the Constitution nor prohibited by it to the states are reserved for the states and its respective citizens.

(2) The Legislature finds that section 36, article VI of the Constitution of the State of West Virginia grants the state the exclusive right to lawfully own and operate a lottery in this state. Authorization of wagering on any constitutional lottery within West Virginia is within the state’s sovereign rights as a state to act in the best interest of its citizens.

(3) The Legislature finds that it is in the best interests of the State of West Virginia for the state to operate a lottery in the form of sports wagering and that it is the intent of the Legislature to authorize sports wagering when federal law is enacted or repealed, or a federal court decision is issued that permits a state to regulate sports wagering, as such power is reserved to the states.

(4) The Legislature finds that illegal sports wagering channels operating throughout the United States pose a critical threat to the safety and welfare of the citizens of West Virginia and that creating civil and criminal penalties to prosecute illegal operators, while transferring this black market demand into a secure and highly regulated environment, will protect the public and positively benefit state revenues and the state’s economy.

(5) The Legislature finds that in order to protect residents of this state who wager on sports or other events and to capture revenues and create jobs generated from sports wagering, it is in the best interests of this state and its citizens to regulate this activity by authorizing and establishing a secure, responsible, fair, and legal system of sports wagering immediately, when the federal ban on sports wagering is lifted.

(6) The Legislature finds that the most effective and efficient manner in which the state can operate and regulate the forms of lottery authorized by the provisions of this article is to limit the number of authorized operators to those who are licensed, pursuant to the provisions of §29-22A-1 et seq. of this code, and to facilities licensed to operate video lottery terminals, pursuant to the provisions of §29-25-1 et seq. of this code

(7) (6) The Legislature finds that the granting of licenses pursuant to the provisions of this article, while maintaining all ownership rights and exercising control through strict regulation of all West Virginia Lottery sports wagering authorized by the provisions of this article, constitutes an appropriate exercise by the Legislature of the power granted it by the provisions of section 36, article VI of the Constitution of the State of West Virginia.

(8) The Legislature finds that the operation of West Virginia Lottery sports wagering at racetracks, licensed pursuant to the provisions of §29-22A-1 et seq. of this code, and at a historic resort hotel, licensed pursuant the provisions of §29-25-1 et seq. of this code, serves to protect, preserve, promote, and enhance the tourism industry of the state as well as the general fiscal wellbeing of the state and its subdivisions

(7) The Legislature finds that individuals frequently place unlawful sports wagers against other individuals, and in sports wagering pools, at establishments that serve beverages and food, and that it is beneficial to the state to regulate that wagering activity and capture a portion of the revenue that it generates.

(8) The Legislature finds that the opportunity to participate in sports wagering should not be predominantly limited to out-of-state companies, and that locally owned businesses, especially small businesses, should also have the opportunity to participate in sports wagering.

§29-22D-3. Definitions.


For the purposes of this article, the following terms have the meanings ascribed to them in this section:

(1) “Adjusted gross sports wagering receipts” means an operator’s gross sports wagering receipts from West Virginia Lottery sports wagering, less winnings paid to wagerers in such games.

(2) “Collegiate sport or athletic event” means a sport or athletic event offered or sponsored by, or played in connection with, a public or private institution that offers educational services beyond the secondary level.

(3) “Commission” or “State Lottery Commission” means the West Virginia Lottery Commission, created by §29-22-1 et seq. of this code.

(4) “Director” means the Director of the West Virginia State Lottery Commission, appointed pursuant to §29-22-6 of this code.

(5) “Gaming equipment” or “sports wagering equipment” means any mechanical, electronic or other device, mechanism, or equipment, and related supplies used or consumed in the operation of West Virginia Lottery sports wagering at a licensed gaming facility including, but not limited to, a kiosk installed to accept sports wagers.

(6) “Gaming facility” means a designated area on the premises of an existing historic resort hotel, licensed under §29-25-1 et seq. of this code, to operate video lottery and table games or the facility of an entity authorized to operate racetrack video lottery machines, pursuant to §29-22A-1 et seq. of this code.

(7) “Government” means any governmental unit of a national, state, or local body exercising governmental functions, other than the United States Government.

(8) “Gross sports wagering receipts” means the total gross receipts received by a licensed gaming facility from sports wagering.

(9) “License” means any license, applied for or issued by the commission under this article, including, but not limited to:

(A) A license to act as agent of the commission in operating West Virginia Lottery sports wagering at a licensed gaming facility (operator license or West Virginia Lottery sports wagering license);

(B) A license to act as an agent of the commission in operating West Virginia Lottery social sports wagering (social operator license or West Virginia Lottery social sports wagering operator license);

(B) (C) A license to supply a gaming facility, licensed under this article, to operate sports wagering with sports wagering equipment or services necessary for the operation of sports wagering (supplier license);

(C) (D) A license to be employed at a racetrack or gaming facility, licensed under this article, to operate West Virginia Lottery sports wagering when the employee works in a designated gaming area that has sports wagering or performs duties in furtherance of or associated with the operation of sports wagering at the licensed gaming facility (occupational license); or

(D) (E) A license to provide management services under a contract to a gaming facility, licensed under this article, to operate sports wagering, or to a social operator, licensed under this article, to operate social sports wagering (management services provider license).

(10) “Licensed gaming facility” means a designated area on the premises of an existing historic resort hotel, pursuant to §29-25-1 et seq. of this code, or the facility of an entity authorized to operate racetrack video lottery machines, pursuant to §29-22A-1 et seq. of this code, licensed under this article, to conduct West Virginia Lottery sports wagering.

(11) “Lottery” means the public gaming systems or games regulated, controlled, owned, and operated by the State Lottery Commission in the manner provided by general law, as provided in this article, §29-22-1 et seq., §29-22A-1 et seq., §29-22B-1 et seq., §29-22C-1 et seq., and §29-25-1 et seq. of this code.

(12) “National criminal history background check system” means the criminal history record system maintained by the Federal Bureau of Investigation, based on fingerprint identification or any other method of positive identification.

(13) “Operator” means a licensed gaming facility which has elected to operate a sports pool and other authorized West Virginia Lottery sports wagering activities.

(14) “Professional sport or athletic event” means an event at which two or more persons participate in sports or athletic events and receive compensation, or are eligible for monetary prizes, in excess of actual expenses for their participation in such event.

“Social sports wagering operator” or “social operator” means any holder of a Class A license issued by the West Virginia Alcohol Beverage Control Administration that has also been licensed by the commission to operate a social sports wagering business.

“Social wagering receipts” means the total receipts received by a licensed social sports wagering operator from social sports wagering.

(15) “Sports event” or “sporting event” means any professional sport or athletic event, any collegiate sport or athletic event, motor race event, or any other special event authorized by the commission under this article.

(16) “Sports pool” means the business of accepting wagers on any sports event by any system or method of wagering.

(17) “Sports wagering account” means a financial record established by a licensed gaming facility for an individual patron in which the patron may deposit and withdraw funds for sports wagering and other authorized purchases, and to which the licensed gaming facility may credit winnings or other amounts due to that patron or authorized by that patron.

(18) “Sports wagering agreement” means a written agreement between the commission and one or more other governments whereby persons who are physically located in a signatory jurisdiction may participate in sports wagering conducted by one or more operators licensed by the signatory governments.

(19) “Sports wagering fund” means the special fund in the State Treasury, created in §29-22D-17 of this code.

(20) “Supplier” means a person that requires a supplier license to provide a sports wagering licensee with goods or services to be used in connection with operation of West Virginia Lottery sports wagering.

(21) “Wager” means a sum of money or thing of value risked on an uncertain occurrence.

“West Virginia Lottery social sports wagering” or “social sports wagering” means the business of operating mobile applications or other digital platforms by which individuals may place wagers against other individuals, or participate in wagering pools, on sporting, e-sports, political, entertainment-industry, or other events, or the individual performances of competitors or entrants in such events, or whether a given occurrence or series of occurrences will take place during the course of such an event, or a combination of any of the same by any system or method of wagering approved by the commission including, but not limited to, mobile applications and other digital platforms that utilize communications technology to accept wagers originating within this state: Provided, That no wager may be placed on any event sponsored or organized by any elementary or secondary school or by the West Virginia Secondary Schools Activities Commission. The term includes, but is not limited to, exchange wagering and pools. The term does not include any of the types of wagering expressly excluded from the definition of “West Virginia Lottery sports wagering” in this section. The term also does not include moneyline or odds-based wagering or parlays.

“West Virginia Lottery social sports wagering license” means authorization granted, under this article, by the commission to a holder of a limited video retailer license issued by the Commission which permits that license holder to operate West Virginia Lottery social sports wagering. This term is synonymous with “social operator’s license.”

(22) “West Virginia Lottery sports wagering” or “sports wagering” means the business of accepting wagers on sporting events and other events, the individual performance statistics of athletes in a sporting event or other events, West Virginia Lottery social sports wagering, or a combination of any of the same by any system or method of wagering approved by the commission including, but not limited to, mobile applications and other digital platforms that utilize communications technology to accept wagers originating within this state: Provided, That no wager may be placed on any event sponsored or organized by any elementary or secondary school or by the West Virginia Secondary Schools Activities Commission. The term includes, but is not limited to, exchange wagering, parlays, over-under, moneyline, pools, and straight bets. The term does not include:

(A) Pari-mutuel betting on the outcome of horse or dog races, authorized by §19-23-12a and §19-23-12d of this code;

(B) Lottery games of the West Virginia State Lottery, authorized by §29-22-1 et seq. of this code;

(C) Racetrack video lottery, authorized by §29-22A-1 et seq. of this code;

(D) Limited video lottery, authorized by §29-22B-1 et seq. of this code;

(E) Racetrack table games, authorized by §29-22C-1 et seq. of this code;

(F) Video lottery and table games, authorized by §29-25-1 et seq. of this code; and

(G) Daily Fantasy Sports (DFS).

(23) “West Virginia Lottery sports wagering license” means authorization granted under this article by the commission to a gaming facility that is already licensed under §29-22A-1 et seq. or §29-25-1 et seq. of this code, which permits the gaming facility as an agent of the commission to operate West Virginia Lottery sports wagering in one or more designated areas or in one or more buildings owned by the licensed gaming facility on the grounds where video lottery is conducted by the licensee or through any other authorized platform developed by the gaming facility. This term is synonymous with “operator’s license.” Every West Virginia Lottery sports wagering licensee is also, by virtue of its sports wagering license, licensed to conduct West Virginia social sports wagering.

§29-22D-5. Licenses required.


(a) The commission shall not grant a license required under this article to any applicant until the commission has published the notice in the State Register, as required by §29-22D-15(f) of this code.

(b) No person may engage in any activity in connection with West Virginia Lottery sports wagering in this state unless all necessary licenses have been obtained in accordance with this article and rules of the commission. Four Five types of licenses: (1) Operator; (2) social operator; (3) supplier; (3) (4) management services provider; and (4) (5) occupational—are issued pursuant to this article, and no person or entity may engage in any sports wagering operation or activity without first obtaining the appropriate license.

(c) The commission may not grant a license until it determines that each person who has control of the applicant meets all qualifications for licensure. The following persons are considered to have control of an applicant:

(1) Each person associated with a corporate applicant, including any corporate holding company, parent company, or subsidiary company of the applicant who has the ability to control the activities of the corporate applicant or elect a majority of the board of directors of that corporation. This does not include any bank or other licensed lending institution which holds a mortgage or other lien acquired in the ordinary course of business;

(2) Each person associated with a non-corporate applicant who directly or indirectly holds a beneficial or proprietary interest in the applicant’s business operation, or who the commission otherwise determines has the ability to control the applicant; and

(3) Key personnel of an applicant, including any executive, employee, or agent, having the power to exercise significant influence over decisions concerning any part of the applicant’s business operation.

(d) License application requirements. — All applicants for any license issued under this article shall submit an application to the commission in the form the commission requires and submit fingerprints for a national criminal records check by the Criminal Identification Bureau of the West Virginia State Police and the Federal Bureau of Investigation. The fingerprints shall be furnished by all persons required to be named in the application and shall be accompanied by a signed authorization for the release of information by the Criminal Investigation Bureau and the Federal Bureau of Investigation. The commission may require additional background checks on licensees when they apply for annual license renewal, and any applicant convicted of any disqualifying offense shall not be licensed.

(e) Each sports wagering licensee, social sports wagering licensee, licensed supplier, or a licensed management services provider shall display the license conspicuously in its place of business or have the license available for inspection by any agent of the commission or any law-enforcement agency.

(f) Each holder of an occupational license shall carry the license and have some indicia of licensure prominently displayed on his or her person when present in a licensed gaming facility at all times, in accordance with the rules of the commission.

(g) Each person licensed under this article shall give the commission written notice within 30 days of any change to any information provided in the licensee’s application for a license or renewal.

(h) No commission employee may be an applicant for any license issued under this article nor may any employee of any such licensee directly or indirectly hold an ownership or a financial interest in any West Virginia Lottery sports wagering or social sports wagering license.


§29-22D-6a. Social operator license; West Virginia social sports wagering operators.

(a) A holder of a limited video retailer license from the commission may operate West Virginia Lottery social sports wagering upon the approval of the commission, and the commission shall have the general responsibility for the implementation of this article and applicable rules.

(b) All social sports wagering authorized by this article shall be West Virginia Lottery games owned by the State of West Virginia. A social operator license granted by the commission, pursuant to this article, grants licensees lawful authority to conduct West Virginia Lottery social sports wagering within the terms and conditions of the license and any rules promulgated under this article.

(c) Grant of license. -- Upon application by a holder of a limited video retailer license from the commission and payment of an application fee of $1,000, the commission shall immediately grant a West Virginia Lottery social sports wagering license to an operator that provides for the right to conduct West Virginia Lottery social sports wagering: Provided, That the applicant must meet the requirements for licensure under the provisions of this article and the rules of the commission. This license shall be issued for a five-year period and may be renewed for five-year periods upon payment of a renewal fee of $1,000 as long as an operator continues to meet all qualification requirements.

(d) Platform. -- A West Virginia Lottery social sports wagering license authorizes the operation of West Virginia Lottery social sports wagering through any mobile application or other digital platform approved by the commission.

(e) Management service contracts. --

(1) Approval. -- A West Virginia Lottery social sports wagering licensee may not enter into any management services contract that would permit any person other than the licensee to act as the commission’s agent in operating West Virginia Lottery social sports wagering, unless the management services contract: (A) Is with a person licensed under this article to provide management services; (B) is in writing; and (C) has been approved by the commission.

(2) Single management services provider. -- A West Virginia Lottery social sports wagering licensee may not have more than one management services contract at any time.

(3) Material change. -- The West Virginia Lottery social sports wagering licensee shall submit any material change in a management services contract, previously approved by the commission, to the commission for its approval or rejection before the material change may take effect.

(4) Other commission approvals and licenses. -- The duties and responsibilities of a management services provider under a management services contract may not be assigned, delegated, subcontracted, or transferred to a third party without the prior approval of the commission. Third parties must be licensed as a management services provider, under this article, before providing services.

(f) Expiration date and renewal. -- A licensed social operator shall submit to the commission such documentation or information as the commission may require, to demonstrate to the satisfaction of the director that the licensee continues to meet the requirements of the law and rules. Required documentation or information shall be submitted no later than five years after issuance of a social operator license and every five years thereafter, or within lesser periods, based on circumstances specified by the commission.


§29-22D-7. Management services providers; license requirements.


(a) License. — The holder of a license to operate West Virginia Lottery sports wagering or West Virginia Lottery social sports wagering may contract with an entity to conduct that operation in accordance with the regulations rules of the commission. That entity shall obtain a license as a management services provider prior to the execution of any such contract, and such license shall be issued pursuant to the provisions of this article and any regulations rules promulgated by the commission. Entities that are not licensed to provide management services to holders of West Virginia sports wagering licenses may receive licenses to provide management services to holders of West Virginia social sports wagering licenses.

(b) License qualifications and fee. — Each applicant for a management services provider license shall meet all requirements for licensure and pay a nonrefundable license and application fee of $1,000. The commission may adopt rules establishing additional requirements for an authorized management services provider. The commission may accept licensing by another jurisdiction, that it specifically determines to have similar licensing requirements, as evidence the applicant meets authorized management services provider licensing requirements.

(c) Renewal. — Management services provider licenses shall be renewed annually to any licensee who continues to be in compliance with all requirements and who pays the annual renewal fee of $1,000.

(d) Any entity or individual who shares in revenue, including any affiliate operating under a revenue share agreement, shall be licensed under this section.

§29-22D-8. Suppliers; license requirements.


(a) Supplier license. —

(1) The commission may issue a supplier license to a person to sell or lease sports wagering or social sports wagering equipment, systems, or other gaming items necessary to conduct sports wagering or social sports wagering, and offer services related to such equipment or other gaming items to a West Virginia Lottery sports wagering or social sports wagering licensee while the license is active. The commission may establish the conditions under which the commission may issue provisional licenses, pending completion of final action on an application.

(2) The commission may adopt rules establishing additional requirements for a West Virginia Lottery sports wagering or social sports wagering supplier and any system or other equipment utilized for wagering. The commission may accept licensing by another jurisdiction, that it specifically determines to have similar licensing requirements, as evidence the applicant meets West Virginia Lottery sports wagering or social sports wagering supplier licensing requirements.

(b) Supplier specifications. — An applicant for a supplier license shall demonstrate that the equipment, system, or services that the applicant plans to offer to the sports wagering or social sports wagering licensee conform to standards established by the commission and applicable state law. The commission may accept approval by another jurisdiction, that it specifically determines have similar equipment standards, as evidence the applicant meets the standards established by the commission and applicable state law.

(c) License application and renewal fees. — Applicants shall pay to the commission a nonrefundable license and application fee in the amount of $1,000. After the initial one-year term, the commission shall renew supplier licenses annually thereafter. Renewal of a supplier license will be granted to any renewal applicant who has continued to comply with all applicable statutory and regulatory requirements, upon submission of the commission issued renewal form and payment of a $1,000 renewal fee.

(d) Inventory. — A licensed sports wagering or social sports wagering supplier shall submit to the commission a list of all sports wagering or social sports wagering equipment and services sold, delivered to, or offered to a West Virginia Lottery sports wagering or social sports wagering licensee in this state, as required by the commission, all of which must be tested and approved by an independent testing laboratory approved by the commission. A sports wagering or social sports wagering licensee may continue to use supplies acquired from a licensed sports wagering supplier, even if a supplier’s license expires or is otherwise cancelled, unless the commission finds a defect in the supplies.

§29-22D-11. Sports wagering house rules; posting of rules.


(a) Each operator and social operator shall adopt comprehensive house rules for game play governing sports wagering or social sports wagering transactions with its patrons. These comprehensive rules will be published as part of the minimum internal control standards. The rules shall specify the amounts to be paid on winning wagers and the effect of schedule changes. House rules shall be approved by the commission prior to implementation.

(b) The house rules, together with any other information the commission deems appropriate, shall be conspicuously displayed and included in the terms and conditions of the sports wagering system. Copies shall be made readily available to patrons.

(c) The commission shall license and require the display of West Virginia Lottery game logos on game surfaces, other gaming items, and any locations the commission considers appropriate.

§29-22D-12. Operator duties; sports wagering operations at a licensed gaming facility.


(a) General. — All operators and social operators licensed under this article to conduct West Virginia Lottery sports wagering or West Virginia Lottery social sports wagering shall:

(1) Employ a monitoring system utilizing software to identify non-normal irregularities in volume or odds swings which could signal suspicious activities that should require further investigation which shall be immediately reported and investigated by the commission. System requirements and specifications shall be developed according to industry standards and implemented by the commission as part of the minimum internal control standards;

(2) Promptly report to the commission any facts or circumstances related to the operation of a West Virginia Lottery sports wagering or social sports wagering licensee which constitute a violation of state or federal law and immediately report any suspicious betting over a threshold set by the operator that has been approved by the commission to the appropriate state or federal authorities;

(3) Conduct all sports wagering and social sports wagering activities and functions in a manner which does not pose a threat to the public health, safety, or welfare of the citizens of this state and does not adversely affect the security or integrity of the West Virginia Lottery;

(4) Hold the commission and this state harmless from and defend and pay for the defense of any and all claims which may be asserted against a licensee, the commission, the state, or employees thereof, arising from the licensee’s actions or omission while acting as an agent of the commission operating West Virginia Lottery sports wagering or social sports wagering pursuant to this article;

(5) Assist the commission in maximizing sports wagering or social sports wagering revenues; and

(6) Keep current in all payments and obligations to the commission.

(b) Duties. — All West Virginia Lottery sports wagering licensees shall:

(1) Acquire West Virginia Lottery sports wagering or social sports wagering gaming equipment by purchase, lease, or other assignment and provide a secure location for the placement, operation, and play of sports wagering or social sports wagering gaming equipment;

(2) Prevent any person from tampering with or interfering with the operation of any West Virginia Lottery sports wagering or social sports wagering;

(3) Ensure that West Virginia Lottery sports wagering conducted at a gaming facility is within the sight and control of designated employees of the licensee and such wagering at the facility or otherwise available by the licensee is conducted under continuous observation by security equipment in conformity with specifications and requirements of the commission;

(4) Ensure that West Virginia Lottery sports wagering occurs only in the specific locations within designated gaming areas approved by the commission or using a commission approved mobile application or other digital platform that utilizes communications technology to accept wagers originating within this state, or on a sports wagering device. West Virginia Lottery sports wagering shall only be relocated or offered in additional authorized manners in accordance with the rules of the commission;

(5) Maintain sufficient cash and other supplies to conduct sports wagering or social sports wagering at all times; and

(6) Maintain daily records showing the gross sports wagering receipts and adjusted gross sports wagering receipts, or social wagering receipts, of the licensee from West Virginia Lottery sports wagering and shall timely file with the commission any additional reports required by rule or by other provisions of this code.

§29-22D-15a. Authorization of social sports wagering in this state; requirements.


(a) A social operator may operate mobile or other digital platforms or sports wagering devices, approved by the commission, by which a patron located within this state may place wagers against other patrons also located in this state, or participate in wagering pools, through the patron’s social sports wagering account.

(b) A social operator may operate mobile or other digital platforms or sports wagering devices, approved by the commission, by which a patron located in a state or jurisdiction with which the commission has entered into a sports wagering agreement may place wagers against other patrons also located in states or jurisdictions with which the commission has entered into sports wagering agreements, or may participate in a wagering pool in a state or jurisdiction with which the commission has entered into a sports wagering agreement, through the patron’s social sports wagering account.

(c) The commission and social operator may ban any person from participating in the play or operation of any West Virginia Lottery social sports wagering. A log of all excluded players shall be kept by the West Virginia Lottery and each licensee, and no player on the commission’s exclusion list or the licensed social operator’s exclusion list, shall wager on any West Virginia Lottery social sports wagering under this article.

(d) The commission shall promulgate rules implementing the provisions of subsection (a) of this section by interpretive rule and minimum internal control standards.

(e) No licensed social operator employee may place a wager on any social sports wagering at the employer’s facility or through any other mobile application or digital platform of their employer.

(f) No commission employee may knowingly wager or be paid any prize from any wager placed in West Virginia Lottery social sports wagering within this state or at any facility outside this jurisdiction that is directly or indirectly owned or operated by a social sports wagering licensee.


§29-22D-16. Sports wagering revenues; accounting for the state’s share of revenue imposed for the privilege of offering West Virginia Lottery sports wagering; limitation of other taxes; recoupment for improvements.


(a) Imposition and rate of assessment. — For the privilege of holding a license to operate sports or social sports wagering under this article, the state shall impose and collect 10 percent of the licensee’s adjusted gross sports wagering or social sports wagering receipts from the operation of West Virginia Lottery sports wagering or West Virginia Lottery social sports wagering (hereinafter “privilege tax” or “tax”). The accrual method of accounting shall be used for purposes of calculating the amount of the tax owed by the licensee.

(b) Operator revenue reports and payment of privilege tax. —

(1) The tax levied and collected pursuant to subsection (a) of this section is due and payable to the commission in weekly installments on or before the Wednesday following the calendar week in which the adjusted gross sports wagering receipts or social sports wagering receipts were received and the tax obligation was accrued.

(2) The licensed operator or social operator shall complete and submit the return for the preceding week by electronic communication to the commission, on or before Wednesday of each week, in the form prescribed by the commission that provides:

(A) The total gross sports wagering receipts and adjusted gross sports wagering receipts or social sports wagering receipts from operation of West Virginia Lottery sports wagering or West Virginia Lottery social sports wagering during that week;

(B) The tax amount for which the sports wagering or social sports wagering licensee is liable; and

(C) Any additional information necessary in the computation and collection of the tax on adjusted gross sports wagering or social sports wagering receipts required by the commission.

(3) The tax amount shown to be due shall be remitted by electronic funds transfer simultaneously with the filing of the return. All moneys received by the commission pursuant to this section shall be deposited in the sports wagering fund in accordance with the provisions of this article.

(4) When adjusted gross receipts for a week is a negative number because the winnings paid to patrons wagering on the licensee’s West Virginia Lottery sports wagering exceeds the licensee’s total gross receipts from sports wagering by patrons, the commission shall allow the licensee to carry over the negative amount to returns filed for subsequent weeks. The negative amount of adjusted gross receipts may not be carried back to an earlier week and moneys previously received by the commission will not be refunded, except if the licensee surrenders its operator’s license and the licensee’s last return reported negative adjusted gross receipts. In that case, the commission shall multiply the amount of negative adjusted gross receipts by 10 percent and pay the amount to the licensee in the manner approved by the commission.

(c) Privilege tax obligation imposed by this section is in lieu of other taxes. — With the exception of the ad valorem property tax collected under chapter 11A of this code, the privilege tax on adjusted gross sports wagering receipts and social wagering receipts imposed by this section is in lieu of all other state and local taxes and fees imposed on the operation of, or the proceeds from operation of West Virginia Lottery sports wagering or West Virginia Lottery social sports wagering, except as otherwise provided in this section. The consumers sales and services tax imposed pursuant to §11-15-1 et seq. of this code, the use tax imposed by §11-15A-1 et seq. of this code and any similar local tax imposed at the municipal or county level, shall not apply to the licensee’s gross receipts from any West Virginia Lottery sports wagering or West Virginia Lottery social sports wagering, or to the licensee’s purchase of sports wagering or social sports wagering equipment, supplies, or services directly used in operation of the sports wagering, or social sports wagering authorized by this article.

(d) Acquisition of any system or wagering equipment and other items related to the operation of West Virginia sports wagering or West Virginia Lottery social sports wagering shall be considered “facility modernization improvements” eligible for recoupment as defined in §29-22A-10(b)(2) and §29-25-22(c) of this code.

(e) Prohibition on credits. — Notwithstanding any other provision of this code to the contrary, no credit may be allowed against the privilege tax obligation imposed by this section or against any other tax imposed by any other provision of this code for any investment in gaming equipment or for any investment in or improvement to real property that is used in the operation of West Virginia Lottery sports wagering or West Virginia Lottery social sports wagering.

§29-22D-17. West Virginia Lottery Sports Wagering Fund; distribution of funds.


(a) The special fund in the State Treasury known as the West Virginia Lottery Sports Wagering Fund is hereby created and all moneys collected under this article by the commission shall be deposited with the State Treasurer to the West Virginia Lottery Sports Wagering Fund. The fund shall be an interest-bearing account with all interest or other return earned on the money of the fund credited to and deposited in the fund. All expenses of the commission incurred in the administration and enforcement of this article shall be paid from the sports wagering fund pursuant to subsection (b) of this section.

(b) The commission shall deduct an amount sufficient to reimburse its actual costs and expenses incurred in administering sports wagering at licensed gaming facilities and in administering social sports wagering from the gross deposits into the sports wagering fund. The amount remaining after the deduction for administrative expenses is the net profit.

(1) Administrative allowance. — The commission shall retain up to 15 percent of gross deposits for the fund operation and its administrative expenses: Provided, That in the event that the percentage allotted for operations and administration generates a surplus, the surplus shall be allowed to accumulate but may not exceed $250,000. On a monthly basis, the director shall report any surplus in excess of $250,000 to the Joint Committee on Government and Finance and remit the entire amount of those surplus funds in excess of $250,000 to the State Treasurer which shall be allocated as net profit.

(2) Distribution of net profit. — In each fiscal year, net profit shall be deposited into the State Lottery Fund created by §29-22-18 of this code until a total of $15 million is deposited; thereafter, the remainder shall be deposited into the Public Employees Insurance Agency Financial Stability Fund to stabilize and preserve the future solvency of PEIA, and such amount may not be included in the calculation of any plan year aggregate premium cost-sharing percentages between employers and employees.

§29-22D-20. Crimes and penalties related to unauthorized sports wagering operations.


(a) Any person, other than a licensee under this article, who engages in accepting, facilitating, or operating a sports wagering or social sports wagering operation is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $10,000 or confined in jail for not more than 90 days, or both fined and confined.

(b) Notwithstanding the penalty provisions subsection (a) of this section, any person convicted of a second violation of subsection (a) of this section is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $50,000, or confined in jail for not more than six months, or both fined and confined.

(c) Notwithstanding the penalty provisions of subsections (a) and (b) of this section, any person convicted of a third or subsequent violation of said subsection (a) of this section is guilty of a felony, and upon conviction thereof, shall be fined not less than $25,000 nor more than $100,000 or imprisoned in a state correctional facility for not less than one year nor more than five years, or both fined and confined imprisoned.

§29-22D-21. Crimes and penalties related to authorized sports wagering operation.


(a) A sports wagering or social sports wagering licensee is guilty of unlawful operation and is guilty of a misdemeanor when:

(1) The licensee operates West Virginia Lottery sports wagering or social sports wagering without authority of the commission to do so;

(2) The licensee operates West Virginia Lottery sports wagering or social sports wagering in any location or by any manner that is not approved by the commission;

(3) The licensee knowingly conducts, carries on, operates, or allows any sports wagering or social sports wagering to occur on premises or through any other device if equipment or material has been tampered with, or exposed to conditions in which it will be operated in a manner designed to deceive the public;

(4) The licensee employs an individual who does not hold a valid occupational license in a position for which a license is required or otherwise allows an individual to perform duties for which such license is required or continues to employ an individual after the employee’s occupational license is no longer valid;

(5) The licensee acts or employs another person to act as if he or she is not an agent or employee of the licensee in order to encourage participation in West Virginia Lottery sports wagering at the licensed gaming facility;

(6) The licensee knowingly permits an individual under the age of 21 to enter or remain in a designated gaming area or to engage in sports wagering at a licensed gaming facility; or

(7) The licensee exchanges tokens, chips, electronic media, or other forms of credit used for wagering for anything of value except money or credits applied to a sports wagering account at a gaming facility authorized under this article.

(b) A person is guilty of a felony when:

(1) A person offers, promises, or gives anything of value to anyone for the purpose of influencing the outcome of a race, sporting event, contest, or game upon which a wager may be made, or a person places, increases, or decreases a wager after acquiring knowledge, not available to the general public, that anyone has been offered, promised, or given anything of value for the purpose of influencing the outcome of the race, sporting event, contest, or game upon which the wager is placed, increased or decreased, or attempts to do any of the same;

(2) A person changes or alters the normal outcome of any game played on a mobile or other digital platform, including any interactive gaming system used to monitor the same or the way in which the outcome is reported to any participant in the game;

(3) The person manufactures, sells, or distributes any device that is intended by that person to be used to violate any provision of this article or the sports wagering laws of any other state;

(4) The person places a bet or aids any other individual in placing a bet on a sporting event or other sports wagering game or offering authorized under this article after unlawfully acquiring knowledge of the outcome on which winnings from that bet are contingent;

(5) The person claims, collects, or takes anything of value from a gaming facility with West Virginia Lottery sports wagering with intent to defraud or attempts such action without having made a wager in which such amount or value is legitimately won or owed;

(6) The person knowingly places a wager using counterfeit currency or other counterfeit form of credit for wagering at a gaming facility with West Virginia Lottery sports wagering; or

(7) The person, not a licensed gaming facility under this article or an employee or agent of a gaming facility licensed under this article acting in furtherance of the licensee’s interest, has in his or her possession on grounds owned by the gaming facility licensed under this article or on grounds contiguous to the licensed gaming facility, any device intended to be used to violate a provision of this article or any rule of the commission.

(c) Any person who violates any provision of subsection (a) of this section is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $1,000 or confined in jail for not more than six months, or both fined and confined, except any violation that is not committed by a natural person may result in a fine of not more than $25,000.

(d) Any person who violates any provision of subsection (b) of this section is guilty of a felony and, upon conviction thereof, shall be fined not less than $5,000 nor more than $10,000, or confined imprisoned in a state correctional facility for not less than one year nor more than five years, or both fined and confined imprisoned.

(e) With regard to subsection (a) of this section, each West Virginia sports wagering, and social sports wagering licensee shall post notice of the prohibitions and penalties of this section in a manner determined by the rules of the commission.

§29-22D-22. Preemption.


No local law or rule providing any penalty, disability, restriction, regulation, or prohibition for operating a gaming facility with West Virginia Lottery sports wagering or supplying a licensed gaming facility or for operating West Virginia Lottery social sports wagering, may be enacted, and the provisions of this article preempt all regulations, rules, ordinances, and laws of any county or municipality in conflict with this article.

 

NOTE: The purpose of this bill is to allow social sports wagering. It allows the business of operating mobile applications or other digital platforms by which individuals may place wagers against other individuals, or participate in wagering pools, on sporting, e-sports, political, entertainment-industry, or other events, or the individual performances of competitors or entrants in such events, or whether a given occurrence or series of occurrences will take place during the course of such an event, or a combination of any of the these events by any system or method of wagering approved by the Lottery Commission including, but not limited to, mobile applications and other digital platforms that use communications technology to accept wagers originating within this state.

Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.

feedback