On June 9th the citizens of Jefferson County will be asked to accept table games at Charles Town Races and Slots. Ostensibly the question each voter must decide is whether the addition of table games is, to steal a phrase, “a good thing”. The conscientious voter, however, after reading the 25-page document known as the West Virginia Lottery Race Track Table Games Act, may be hard pressed to understand key concepts much less weigh their pros and cons. Some passages are clear as day; others, clear as mud.

What’s clear is that the Race Track must procure a license, at the price of $1.5 million, from the West Virginia Racing Commission before employing table games at its facility. This license fee, along with an annual renewal fee of $2.5 million and another $2.5 million annual surcharge if the Race Track fails to build and operate a 150 room on-site hotel within three years, is to be deposited into a new fund to be expended by the West Virginia Bureau of Senior Services. Once licensed however, the bill allows the Race Track to have and operate an unlimited number of table games. Although it’s terrific that these funds are dedicated for home services for the seniors and disabled citizens of West Virginia, it’s alarming that the quid pro quo is an unlimited number of gaming tables at Charles Town Races and Slots.

It’s also clear that for the privilege of holding a table games license, the Race Track must pay an annual privilege tax of 35 percent of adjusted gross receipts (defined as gross receipts from table games minus the payout of winnings) to the West Virginia Racing Commission. Crystal clear is the provision that this 35 percent tax is in lieu of all other state and local taxes and fees, except property taxes. Accordingly, the Race Track will pay no state income tax or business franchise tax on receipts from wagers on table games. Nor will the Race Track pay sales, service, or use tax on the purchases of, or services for, table gaming equipment. And once built, the Race Track will pay no hotel/motel tax to Jefferson County on their new hotels. Curiously, in none of the public debates, newspaper articles, radio interviews, or electronic bulletin boards has an analysis as to whether this flax tax, in lieu of the taxes that every other company doing business in Jefferson County has to pay, is fair.

Clear as day, however, is the fact that of this 35 percent tax, the State takes the lion’s share, which is earmarked for state debt reduction. The second largest cut goes into a pension plan for racetrack employees, and the third largest cut goes to pay the administrative cost of the West Virginia Racing Commission for enforcing this new law. Thereafter, the percentages get smaller and smaller with allocations to horse and dog purses, Thoroughbred and Greyhound Breeding Development Fund, and county commissions and municipalities. Although it’s great that the employees of a private employer such as Charles Town Races and Slots, and the other racetracks in West Virginia have pension plans, it’s unclear why the citizens of West Virginia are paying for contributions to that pension plan.

Equally murky is Jefferson County’s share of this 35 percent flat tax. At first blush, and several conversations with our local delegates later, it seems as though the legislators intended to benefit the Jefferson Count Board of Education to the exclusion of the county. Why? Notwithstanding, the language of this new law is so winding that there are at least two other interpretations which could be advanced arguing that the statute does indeed provide funds for our county. The statute provides
“. . . one percent . . . to the county commission . . . provided that the county board of education . . . shall receive one percent . . . as provided in this subdivision . . . ” This language is popularly interpreted as directing Jefferson County’s entire share to the Jefferson County Board of Education. But on second look, an argument could fairly be made that the Board of Education is merely to take a 1 percent portion from the County’s 1 percent share. And if that wasn’t confusing enough, one page later, the statute provides a share
“ . . . to each county commission in the state that is not eligible to receive a distribution. . . ” Accordingly, if the popular notion withstands a challenge, and the Board of Education takes Jefferson County’s entire share, then this provision would seemingly kick in and allow Jefferson County to partake from this pool of funds.

In toto, perhaps the addition of table games with its resulting cash distributions is fair and equitable—perhaps not. What is clear, however, is that the citizens of Jefferson County have no easy task trying to read the balance sheet.