WHEELING - Local racetrack officials convinced voters last year that table gambling was needed to counter competition from Pennsylvania's new slots casinos, most notably that from the nearby Meadows Racetrack and Casino complex.
Now those same officials have approached the West Virginia Lottery Commission about offering "free play" credits in an effort to retain their "preferred players."
It seems many slot machine players are being enticed to Pennsylvania casinos with the promise of $20 to $50 in credits applied to their player's cards. West Virginia's racetracks want the same advantage to bring the players back to the Mountain State.
The state's racetracks said they will lose many of their best players if they are not allowed to offer the free play credits option. James Simms, Wheeling Island Hotel-Casino-Racetrack general manager and chief executive officer, said this could cause his track to scale back its plans to build a new hotel.
Simms said if the tracks are not successful in convincing the commission to allow them to try offering free play credits for a three-month trial period, the track officials will make a similar pitch when the West Virginia Legislature convenes next February for its regular session.
"We're not talking about offering coupons, but about downloadable promotional credits," Simms said.
He said Wheeling Island currently offers redeemable coupons, and a $50 coupon comes with a subsequent $50 cost to the track.
In Pennsylvania, however, casinos offer "free play" credits that have no cash value, and this essentially gives these casinos an unlimited marketing budget, Simms contends.
The idea is after customers spend their $50 credit, they then will reach into their pockets for their own money to gamble.
He estimates The Meadows is offering about $750,000 to $850,000 in credits each week to draw customers from West Virginia and the Wheeling Island Hotel-Racetrack-Casino. In comparison, Simms said the Wheeling Island track's annual marketing budget is about $6 million.
"It costs them nothing," Simms said of free play at The Meadows. "They have the ability to send free plays to everyone in their database. It's the most powerful marketing tool out there. We have a limited budget, and they have an unlimited arsenal."
He termed the move toward free play a "reactionary measure" by West Virginia's track officials.
"I don't think any of us really anticipated how they have been spending money on free play," Simms said. "I have a hard time understanding what they're trying to do. At some point you reach a saturation point, and people won't want to take out their own dollar."
He noted West Virginia tracks are "very appreciative" that they now have table gambling products in their casinos, but that slot machines continue to represent 65 percent of the income at Wheeling Island's track. The same money also is taxed by the state, and means a great deal in revenue to West Virginia's general fund.
Simms said $50 in free play credits at West Virginia casinos would mean a loss in state tax money of about $5.70. However, West Virginia could eventually lose out on a lot more tax money if the tracks continue to lose their slot machine customers, he said.
At present, 26 of the 38 states that offer gambling products are permitted to offer free play credits, Simms said.
"We are confident that through interpretive rule, we would be able to put free play in under promotions," Simms said. "Typically, free play is a marketing promotion. If we find we are unable to do that, we will want to revisit the issue during the next legislative session."
John Melton, West Virginia Lottery Commission general counsel, said there are some technical issues being worked out with the free play matter concerning the commission's central information system before the track's request can be dealt with. He and John Cavacini, West Virginia Racing Commission president, both spoke of West Virginia potentially offering "coupons" to entice frequent players to the tracks' casinos. Cavacini said Simms was spearheading the effort, and he referred all comment to him.