West Virginia Governor Jim Justice Relents on Integrity Fee Amid Conflict of Interest

Posted on: May 23, 2018, 06:28h. 

Last updated on: May 23, 2018, 06:28h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

West Virginia is pressing ahead with sports betting, minus the sports leagues’ controversial “integrity fee.”

West Virginia Governor Jim Justice
West Virginia Governor “Big” Jim Justice threw his not inconsiderable weight behind the integrity fee after a direct appeal from MLB Commissioner Rob Manfred. Justice is owner of the Greenbrier Hotel, which operates casino gaming and does business with sports leagues. (Image: Jesse Wright/West Virginia Public Broadcasting)

State Governor Jim Justice had threatened to intercede on behalf of the leagues and use a special session this week to reexamine sports betting legislation passed in early March, with a view to tagging the fee on. But when the special session convened this week, sports betting was not on the agenda.

That’s bad news for the leagues because West Virginia’s sports betting bill may well come a blueprint for the flurry of states that are expected to legalize sports betting over the next few years.

The proposed integrity fee was initially a one percent cut for the leagues on all bets placed on their games, although latterly they have shown a willingness to compromise at .25 percent. Nevertheless, lawmakers and casinos believe the fee is little more than an onerous royalty charge which the leagues would receive essentially for doing nothing.

West Virginia’s lawmakers rejected the integrity fee, despite lobbying from the leagues, prompting MLB Commissioner Rob Manfred to intervene and appeal directly to Governor Justice.

In League with the Leagues

Justice, a 6’ 7’’ billionaire coal baron sometimes known as “Big” Jim, had previously stayed out of all matters sports betting due to a glaring conflict of interest. He is the owner of the Greenbrier luxury hotel resort in the Allegheny Mountains, which offers casino gambling and will therefore be eligible to apply for a sports betting license under the new system.

Justice has also done business with the NFL and the PGA. The New Orleans Saints and, later, the Houston Texans have used the Greenbrier as a training camp, while the Greenbrier Classic became a stop on the PGA Tour in 2012.

Justice neither signed nor vetoed West Virginia’s sports betting bill, meaning it became law on March 9. But following discussions with Manfred, he chose to get involved.

“I really believe that we need to bring [the leagues] under the umbrella for the amount of the fee that they wanted,” he said, claiming to have “negotiated” the .25 percent fee that was already being touted in other states.

Rough Justice

He also claimed to have reached a “tentative agreement” between the leagues and stakeholders, including the Lottery Commission and the state’s casinos, during a closed-door meeting, although this has been denied by the casinos.

Both Republicans and Democrats, pushed back against the governor, and, for now it seems to have worked. For lawmakers like Delegate Shawn Fluharty (D-3rd) the conflict of interest was just too much.

Essentially what we’re trying to do is extract money from West Virginia and send it to New York City and billionaire friends of the governor,” he told West Virginia Metro News radio network recently.

The state hopes its casinos will start taking the first bets in August or September and expects to enjoy a temporary regional monopoly, until Pennsylvania gets up and running next year.