Published: November 10, 2008 01:01 pm            

2000 WVU study estimated benefits from Greenbrier gambling

As resort officials scramble to hire experts to determine the financial impact of casino-style gambling at The Greenbrier, a 2000 study by West Virginia University said the hotel could reap more than $6 million in profits, $34 million could be pumped into the local economy and up to 76 jobs could be created by table games being offered as an amenity at the four-star resort.

The report was commissioned under contract between The Greenbrier Resort Management Co. and the WVU Research Corp., and compiled by the university’s College of Business and Economics.

On Wednesday, a day after Greenbrier County voters approved a referendum to allow the resort to offer table games, hotel president Andrew Fogarty issued a letter to employees stating the resort would once again study the fiscal impacts of table games, but also cautioned, “We do know that gaming would require significant investment in a challenging economy and therefore must be evaluated very carefully.”

Resort officials would not reveal Friday which casino consultant firm was hired to produce the study.

Under a state law passed in 1999 that put the table games issue in the hands of county voters, 52 percent of the net income generated by slot machines and 37 percent from table games at The Greenbrier would go directly to a special state gaming fund.

The WVU study estimated the state’s share at about $5 million per year and an “additional $700,000 in state fees and miscellaneous taxes.” State sales tax collections are estimated to increase by $831,000 and tips to Greenbrier employees are estimated to increase by $181,000.

The WVU study also indicated an additional 76 jobs would be created by the gaming facility with an annual payroll and fringe benefits package totaling more than $3.5 million.

If The Greenbrier chooses to provide gambling as an amenity for guests, the county would receive 4 percent ($170,000), White Sulphur Springs would receive 2 percent ($85,000) and the remaining municipalities of Alderson, Lewisburg, Quinwood, Rainelle, Renick, Ronceverte and Rupert would share 2 percent ($85,000) of its gross annual income.

“Total gaming facility revenue (for the resort) is estimated to be $6.05 million annually, after the gaming tax split with the state ... or approximately $40 per occupied room,” the study said.

------

West Virginia Lottery Commission lawyer John Melton said the 1999 law remains in effect. However, he believes the new race track legislation would significantly alter how The Greenbrier revenue could ultimately be divided up.

“The stand-alone gaming facility operation will be a break-even proposition at best from the viewpoint of The Greenbrier, given the high tax rates and their unusual application to total revenue rather than net income that is the norm for virtually every other business in the United States,” the 2000 WVU study said.

In 1999, the law was devised to provide the taxes be placed on gross revenue, but since then, the race track legislation has been changed to allow taxes be placed on net income, Melton said, and that would apply to The Greenbrier as well.

“The gross revenue for the state from all of the race tracks is between $500 to 600 million per year,” Melton said. “A large portion of that comes from the poker machines and not the poker table games.”

Melton said Greenbrier resort officials have not contacted his office and the state Lottery Commission is in a “wait and see” mode in regard to any future application for a gaming license.

------

Greenbrier union spokesperson Peter Bostic said resort officials have not contacted him about the table games issue.

“We have not had any contact from the company other than the letter that was sent out to employees,” Bostic said Friday. “The union still believes the prudent business decision will be to expand their available amenities to their guests through gaming which will attract additional business.”

Bostic also felt the tone of Fogarty’s letter was not appreciative for the union’s help in trying to resurrect the financial standing of the four-star resort.

“The passing of the referendum showed that the voters, employees and the residents of the county cared whether The Greenbrier stayed in business, and for the letter not to be the least bit gracious to the voters was, at least to me, disappointing. The unions are very thankful to the voters for giving the company an opportunity to survive.”

        

• Click to discuss this story with other readers on our forums.