Update of the Legislators' Guide To Video Lottery Terminal Gambling

Chapter 5. Distribution of Video Lottery Terminal Proceeds 28
West Virginia
West Virginia’s racetrack video lottery legislation has been amended since its inception
to restate its revenue distributions through the use of three separate revenue benchmarks.
Individually, each of West Virginia’s racetracks utilizes the benchmarks. Before the benchmarks
are applied, 4 percent of the gross terminal revenue is allocated by each racetrack for lottery
administrative costs. Net terminal revenues are initially allocated in the following manner:
racetrack licensees (47 percent), state (34 percent), private entities associated with the racing
industry (17 percent), and the local counties in which the racetracks reside (2 percent).
Under current law, three specified benchmarks on administrative costs, the allocation of
revenues to local counties and municipalities, and net terminal income act as thresholds for
reapportioning racetrack revenues. With these benchmarks, a 10 percent surcharge is first
applied to annual net terminal income to provide for racetrack capital reinvestment funds
(42 percent) and to the state (58 percent) as specified by legislation or the state budget. After
deduction of the surcharge, net terminal revenues from racetracks are allocated in the following
manner:
• 45 percent – state;
• 42 percent – racetrack licensees;
• 11 percent – other racing industry private entities; and
• 2 percent – local county and municipal governments.