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Lottery revenues have plunged since peak year of 2007

CHARLESTON, W.Va. -- State Lottery revenues have plunged $233 million from the peak year of 2007, and are expected to continue to decline in the face of growing competition from Ohio, Maryland and Pennsylvania, Lottery Director John Musgrave said Monday.

"We're conservative in our estimates, but you can see we expect another impact from Ohio when they get all their casinos operating," he told the Senate Finance Committee.

In 2007, the two Northern Panhandle racetrack-casinos, Mountaineer and Wheeling Island, began losing customers to two new casinos located in and near Pittsburgh.

The hit got worse last fall, when newly legalized casinos began opening in Ohio, including two facilities in Columbus.

"Columbus has got a casino right in downtown, and you've got a racetrack outside of Columbus," he said.

In addition to the fourth major casino that opened last week in Cincinnati, six additional racetrack-casinos are slated to open in Ohio, he said.

"The competition is still building over there," Musgrave said.

Senate Majority Leader John Unger, D-Berkeley, said it is clear the panhandle casinos are hemmed in geographically, with competitors on both sides.

"They're in a pinch. The only option is to try to increase in West Virginia," he said.

However, Musgrave noted that only about 13 percent of patrons at Wheeling Island and 3 percent at Mountaineer are from West Virginia.

"If we relied on West Virginia players, we wouldn't have many people coming," he said.

Senate Finance Chairman Roman Prezioso, D-Marion, asked if Wheeling Island -- the hardest hit of the state's four casinos -- can survive.

"We feel there are things that might be done," Musgrave responded, saying that both Wheeling Island and Mountaineer will have to scale back operations.

"We're hoping people will try out the new locations, the new facilities, with all the glitz and glitter, and maybe they'll try them out, and eventually come back," he said.

Also Monday, Musgrave told the Finance Committee:

• The Lottery Commission has no plans to seek legislation to legalize online Lottery gaming.

"We don't have any plans right now to move in that direction," Musgrave said, commenting on legislation passed in New Jersey to allow casinos in that state to operate websites offering video poker and blackjack.

Musgrave said the Lottery is tracking industry trends, but said the commission would probably be more interested in online versions of scratch off games, and to allow purchases of Powerball, MegaMillions and daily lottery drawings via computer or cellphone apps.

• Mardi Gras casino in Nitro has been able to buffer the impact from Ohio competition somewhat better than the Northern Panhandle casinos, thanks to its location off of Interstate 64.

Noting that about 27 percent of the casino's players are from North Carolina, Virginia, and Kentucky, Musgrave said many players from those states stop off at Mardi Gras for lunch or dinner and gaming while traveling.

Reach Phil Kabler at philk@wvgazette.com or 304-348-1220.


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