States' Short Sessions Leave Tight Timelines To Pass Gambling Bills

February 27, 2023
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Virginia has become the first state to wrap up its legislative session for 2023, with a bill on problem gambling scoring approval but other proposals related to casinos and sports-betting taxes are left for further discussion as part of the budget process.

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Virginia has become the first state to wrap up its legislative session for 2023, with a bill on problem gambling scoring approval but other proposals related to casinos and sports-betting taxes are left for further discussion as part of the budget process.

In Virginia, the General Assembly meets for just 45 legislative days in odd-numbered years, making passage of a number of gaming measures a challenge before the session came to an end on Saturday (February 25).

Lawmakers left the state capitol without reaching a deal on a new state budget, meaning the fate of an effort to restore promotional tax credits for sports-betting operators will be up to those House and Senate negotiators working to reach a compromise on a spending bill after the session closes.

A budget amendment passed last year prohibited mobile sports-betting operators from excluding bonuses or promotions from their adjusted gross revenue 12 months after they began offering bets in Virginia.

A pair of bills supported by leading sports-betting operators to restore the deductions were tabled in the House Appropriations Committee this month, after being approved by the Virginia Senate. Those proposals would have allowed operators to keep deducting promotional credits and bonuses from taxable revenue after 12 months, but only up to an equivalent of 1.75 percent of the total wagering handle.

That decision of the House committee left a budget amendment as the only possible way to reinstate promotional tax credits in Virginia.

Among the other gambling bills tabled or voted down in committee this year was House Bill 2295, authored by House Majority Leader Republican Terry Kilgore, which would have allowed the thousands of grey-market games to operate legally until July 1, 2024, which would have given the state time to draft new regulations.

The bill was left untouched in the General Laws Committee, while a state court judge in April or May holds a hearing to consider a legal challenge to the state’s ban on skill-game machines.

Meanwhile, House Bill 1373 and Senate Bill 780 to allow a casino referendum in Petersburg and allow the city to host a casino were also rejected in committee.

As of Sunday, it was unclear if Senator Joe Morrissey, a Democrat, would be successful in getting language in the budget preventing the nearby state capital of Richmond from holding a second referendum.

Morrissey has been the leading supporter of allowing Petersburg to hold a ballot referendum on a $1.4bn casino project before Richmond gets a second opportunity to consider its own casino project initially rejected by voters in a 2021 referendum.

Lawmakers in both chambers of the General Assembly did approve House Bill 1465, creating a new committee on problem gambling. The bill establishes the Problem Gambling Treatment and Support Advisory Committee within the state’s Department of Behavioral Health and Development Services (DBHDS), which oversees addiction and mental health issues in Virginia.

The committee’s mission would be to “enable collaboration” between prevention and treatment providers and the gaming industry “on efforts to reduce the negative effects of problem gambling.”

Another gaming bill approved by lawmakers before the session's end was House Bill 1617, establishing a Gaming Regulatory Fund where all license fees will be deposited and used to offset the Virginia Lottery's regulatory costs for sports betting and casinos.

But Senate Bill 1143, which would have transferred regulatory oversight of charitable gaming and historic horseracing from the Department of Agriculture and Consumer Services and the Virginia Racing Commission, respectively, to the Virginia Lottery, was pulled by its sponsor early in the 2023 session.

Instead, members of the House and Senate last week passed a resolution to create a legislative study commission to review whether Virginia should consolidate regulation of all forms of gambling under a newly-formed Virginia Gaming Commission. The study must be completed by November 30 and recommendations shared with lawmakers prior to the 2024 legislative session.

Filing Deadline Active In Kentucky

Virginia is far from the only state to struggle to deal with a number of pending gambling issues during an abbreviated legislative session in 2023.

Elsewhere, the clock is already ticking for various bills to authorize sports betting in Georgia, where lawmakers are scheduled to adjourn on March 29, as well as for several closely watched pieces of legislation in Kentucky.

Last Wednesday (February 22) saw several gaming bills filed in Kentucky on what is known as deadline day, which was the last day bills can be filed in the state's House of Representatives.

Republican Representatives Michael Meredith and Killian Timoney both met that deadline for filing bills to legalize sports betting and ban so-called skill-based games. The General Assembly will remain in session in Frankfort until March 30, giving both chambers about a month to pass both pieces of legislation.

House Bill 551, authored by Meredith and with bipartisan support from six Democrats and five Republicans signed on as co-sponsors, would give the Kentucky Horse Racing Commission regulatory oversight of sports betting.

It is the fifth straight year a bill to legalize sports betting has been introduced in the Kentucky General Assembly. Last year, a bill passed the House for the first time but did not receive a vote in the Senate.

That bill was defeated in the Senate in part due to lawmakers' concerns about the expansion of gambling because the measure also legalized online poker and fantasy sports. Meredith stripped online gaming and fantasy sports out of his bill to give it a better shot of becoming law in 2021.

HB 551 would allow retail wagering at Kentucky's nine racetracks and tax betting at 9.75 percent. Mobile wagering would be taxed at 14.25 percent, with each racetrack getting three mobile skins.

For the first year, the bill requires in-person registration to fund accounts but remote registration would be allowed after that.

The bill has been referred to the House Licensing, Occupations & Administrative Regulations Committee.

House Bill 106, which was filed in early January, does include language to legalize online poker and fantasy sports, as well as sports betting, but is sponsored exclusively by Democrats.

Timoney also introduced House Bill 594 to ban so-called skill-based games, also known as grey-market machines, that have proliferated throughout the states. That bill remains in the House Committee on Committees awaiting referral.

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