W.Va. gaming revenues falling

WHEELING – As the midway point of the municipal fiscal year approaches, gambling revenue in Wheeling is down about $90,000 from the same period last year, signaling a continued toll taken by competition from neighboring states.

According to Wheeling’s monthly financial report, the city had received $372,436 from gambling-related sources – table gambling, racetrack video lottery and limited video lottery – as of the end of November. At the same point in 2012, the city had received $462,758.

The problem of what to do about sinking gambling revenue isn’t unique to Wheeling. Statewide, proceeds from table gambling are behind last year’s pace by 36 percent, with racetrack video lottery down 9 percent and LVL by 5.5 percent. Overall lottery revenue of $514.17 million – which includes sales of scratch-off tickets and drawings such as Powerball and Mega Millions – is down 8 percent from this time last year.

State Lottery Commission officials have blamed new options closer to home for out-of-state gamblers who once were faithful patrons of Mountain State casinos. In 2012, casinos opened in both Cleveland and Columbus, leading fewer gamblers to make the drive to Wheeling and Chester to patronize Wheeling Island Hotel-Casino-Racetrack and Mountaineer Casino, Racetrack and Resort.

This year brought more of the same, but from a different direction – Maryland. May saw the opening of a casino about 20 miles away from the Hollywood Casino in Charles Town, W.Va. Table gambling also debuted at an existing casino southwest of Washington, D.C., in April, and another full-scale casino with table games is expected to open in Baltimore sometime next year.

Although this has more of a direct impact on the Eastern Panhandle casino, the trickle-down effect is apparent in local government budgets around the state, as illustrated by Wheeling’s situation. Wheeling’s table gambling proceeds are derived from activity at all West Virginia casinos where such games are offered, including Wheeling Island, Mountaineer, Hollywood and the Mardi Gras Casino and Resort near Charleston.

All told, the Friendly City expects to receive about $1.59 million from gambling activity by the end of the fiscal year. That accounts for about 5.1 percent of overall anticipated revenue. Three years ago, during the 2010-11 fiscal year, gambling proceeds of $1.89 million made up 6.5 percent of Wheeling’s total budget.

Though all three categories of gambling revenue are coming in below expectations, the biggest impact has been seen in table gambling revenue, which is lagging almost $69,000 – or about 23 percent – behind this year’s pace.

Total revenue in Wheeling has been strong, as the $15.03 million collected through the end of November represents 48 percent of the city’s projection for the full fiscal year, about 42 percent of the way through the 2013-14 budget year.

But running a city typically doesn’t get less expensive over time – particularly when it comes to employee pensions. During 2014-15, the city will have to come up with $280,000 more for its police and fire retirement plans than it did this year, just to comply with state law.

Overall, “revenues have been strong and expenses have been kept down … ,” Mayor Andy McKenzie said. “I plan on having a more in-depth discussion with the city manager (Robert Herron) and finance director (Michael Klug) in the coming days.”

City Manager Robert Herron could not be reached for comment.