Bad Bet

It would be nice to believe, as state Lottery Commission Director John Musgrave hopes, that government revenue from legalized gambling in West Virginia will not continue to fall.

But state officials cannot afford to look at budget plans through rose-colored glasses.

Legalized gambling has expanded in Pennsylvania, Ohio and Maryland since West Virginia allowed casinos to open. And casinos around the state have been hit hard.

Loss of revenue to the state has not been as severe as some had predicted, however. The decrease has been slow but steady.

Halfway through the current budget year, Lottery Commission revenue stood at $664.5 million – down nearly $42 million from the previous year. With new casinos on line in Ohio and planned for Maryland, the slide will continue and perhaps accelerate.

Yet Musgrave told a reporter last week he expects gambling revenue for the fiscal year beginning July 1 to stay at about the same level as for the current 12-month period.

Even if it does, that will represent a dramatic downturn. Again, just halfway through the current year, government’s “take” from gambling is off by nearly $42 million in comparison to last year. At that rate, the full-year “pot” will be more than $80 million smaller.

State officials already view the coming fiscal year as a major trial, because of factors such as increased costs for the Medicaid program. As they draw up a budget for the year, they also should plan for a dramatic drop-off in gambling revenue – worse than Musgrave expects.

This is a situation in which optimism may well be a bad bet.