Despite facing campaigns that repeated all the warnings of the “evils” of gaming, six states and one California city approved expansions of gaming, completing a unanimous win for gaming ballot measures in last week’s elections.
Sports betting was legalized in Louisiana, Maryland and South Dakota and expanded casino gaming in Colorado, Nebraska and Virginia. San Jose, California voter agreed to allow more tables at two local cardrooms.
“As a result of successful ballot measures in six gaming states, more Americans will have access to much needed job opportunities, dedicated tax revenue, and safe, regulated entertainment options closer to home,” said Bill Miller, president and CEO of the American Gaming Association.
“Some form of legal gaming is currently authorized in 44 states, and more than 45 percent of American adults—115 million—live in states with legal, regulated sports betting and the safeguards these markets provide.
“Our industry has a long history of working successfully with federal and state governments that span party lines, and we look forward to our continued collaboration with champions in Washington, DC to shape a favorable policy environment for gaming.
“The AGA will work with the bipartisan Congressional Gaming Caucus in the 117th Congress to ensure policymakers understand our industry’s commitment to responsibility and the positive economic impact we have in communities across the country.
“We also look forward to continuing to work with members on both sides of the aisle to address overly burdensome and unnecessary regulations and taxes, as well as reducing illegal gambling operations that continue to pose a risk to the American public and the economic success of our industry.”
VIRGINIA
By a ratio of nearly two to one, voters overwhelmingly supported referendums in Bristol, Danville, Norfolk and Portsmouth, Virginia, which will allow a commercial casino to be built in each of those cities.
In Danville, with all 17 precincts reporting, 68.7 percent of in-person voters approved the $400 million Caesars Entertainment Inc. casino resort. In Bristol, with all five precincts reporting, 71 percent of voters approved the $400 million Hard Rock casino to be built at the former Bristol Mall. In Norfolk, with 46 of 49 in-person precincts reporting, 65 percent of voters voted approved a $500 million casino. And in Portsmouth, with all 32 in-person precincts reporting, 66.7 percent of voters approved the $300 million casino referendum.
Analysts predict the Bristol casino will create 2,000 jobs and generate $130 million in revenue and $35 million in taxes annually, and attract more than 4 million people to the region. Investors Jim McGlothlin and Clyde Stacy, along with Jim Allen, chairman of Hard Rock International Inc., said in a statement: “We are incredibly grateful for the strong support we have received from the voters of Bristol, Virginia. Today’s referendum vote to bring a Hard Rock Hotel & Casino to Bristol is a vote in favor of more jobs and greater economic opportunity for local residents. This is a win for Bristol and a win for the entire region.”
McGlothlin added, “When Clyde and I launched this idea over two years ago, we called it a ‘moonshot.’ Well, thanks to the voters in Bristol, Virginia, for providing the fuel, with passage of the referendum, to launch us to that successful landing.” The project includes a 2-level casino floor, outdoor entertainment venue with 20,000 capacity, 3,200-seat indoor theater, seven restaurants, four bars, retail shopping, convention and meeting space and a 350-room hotel.
Officials said a temporary casino will open in the former Belk location in the mall in the third or fourth quarter of 2021 in the mall while the property is renovated. The permanent casino is expected to open in late 2022.
In Danville, Caesars Entertainment plans to build a casino resort in the Schoolfield neighborhood. The deal includes a one-time payment of $20 million to the city, including $5 million to purchase the property. An analysis indicated the project will generate at least $190 million in direct revenue and $51 million in tax revenue annually by 2025.
Caesars Chief Executive Officer Tom Reeg said, “Caesars Entertainment thanks the voters of Danville for their support of the referendum that will bring Caesars Virginia to Danville. We look forward to fulfilling the trust the voters have placed in us by bringing 1,300 good-paying jobs, tourism dollars and economic development to the city, and we are incredibly excited to begin construction. We would also like to express our deep gratitude to the many respected business owners and citizens who shared the positive impact this resort will bring to the community with their customers, friends and neighbors. We are pleased to be welcomed into the Danville community and look forward to a long, successful future.”
The Pamunkey Indian Tribe and its partner, Tennessee billionaire Jon Yarbrough, estimated the Norfolk casino will create 1,500 permanent jobs and generate $185 million in annual revenue including $50 million in annual taxes. , according to JLARC projections. The tribe has said it plans to use the casino income to invest in the Norfolk community and its tribal lands in King William County. Officials said 90 percent of the resort jobs will be filled with area residents, including 50 percent from minority groups. The tribe also committed $150,000 to help open a grocery store in the St. Paul’s neighborhood.
Pamunkey Chief Robert Gray said, “We are moved beyond words by the tremendous display of support we’ve received from the Norfolk community. To everyone who advocated on our behalf, shared our message with their friends and neighbors, put up a yard sign, wore a sticker or simply voted yes, we cannot thank you enough. We look forward to working with you to make Norfolk even stronger for decades to come.” The Pamunkey casino resort will feature 3,000 slots and 150 table games, plus a 300-room full-service hotel, steak and seafood restaurant, sports bar and grill, cafe, spa and 2,500-seat entertainment venue.
Chicago-based Rush Street Gaming LLC will operate the Portsmouth casino resort, which is expected to generate $167 million in annual revenue and $45 million in annual gaming taxes, and create 1,380 permanent jobs. Rush Street officials pledged to solicit 5 percent of the equity or $5 million, whichever is greater, from local minority owned businesses or private, accredited investors who are minorities.
Company officials issued a statement saying, “Rush Street Gaming is excited that Portsmouth residents have approved the casino gaming referendum. Rivers Casino Portsmouth will be a proud community partner, a great workplace and a strong economic engine for Portsmouth and Hampton Roads.”
The referendums represent the last step in a process approved by the General Assembly earlier this year to legalize casinos in five economically struggling cities. Richmond is the fifth but officials there chose to wait until 2021 to put a casino referendum on the ballot. The Pamunkey Tribe has expressed interest in building a casino resort there.
Now the casinos’ operators must submit gaming license applications to the Virginia Lottery Board, which will regulate the venues. By law, lottery officials have up to 12 months to review the application,
When the General Assembly legalized commercial casino gambling, it also created a treatment and support fund for problem gambling services. The first $200 million of adjusted gross receipts will be taxed at 6 percent; between $200 million and $400 million at 7 percent; and revenue exceeding $400 million at 8 percent; 0.8 percent of the tax revenue will be directed to the treatment fund according to state law.
MARYLAND
The voters of Maryland last week overwhelmingly approved amending the state constitution to allow sports betting. The vote, which was “yes” on sports betting by a 2-to-1 margin, caps two years of waiting for the state’s proponents of sports betting, after the state legislature failed to vote the measure onto the 2018 election ballot.
The constitutional amendment path was chosen because the state General Assembly was consistently unable to agree on legislation to legalize sports betting, and state officials decided not to add sports betting as a new game under the Maryland Lottery.
Regardless of those facts, the legislature will now be charged with agreeing on the terms of sports betting in Maryland, including how fans would place bets. Wagers could be limited to casino sportsbooks and/or lottery outlets, since the Maryland Lottery and Gaming Control Agency is the regulator of both the lottery and the casinos. The issue of online/mobile sports betting needs to be addressed as well.
Another issue to be resolved is the state’s cut of revenues. Maryland has one of the highest gaming tax rates in the nation, so there no doubt will be discussion of keeping the tax lower on sports betting to compete not only with neighboring jurisdictions like Pennsylvania, the District of Columbia and New Jersey, but also with illegal sportsbooks.
A nonpartisan analysis performed for the legislature assumed a 20 percent tax for sports betting, mirroring the revenue tax on table games at the state’ six casinos. D.C. taxes sports betting at 10 percent, Pennsylvania at 37 percent, New Jersey at 8.5 percent.
The analysis estimated Maryland could generate $18.2 million per year in revenue from retail and mobile sports betting, assuming the 20 percent tax.
The ballot measure linked sports betting proceeds to education funding, asking if sports betting should be authorized “for the primary purpose of raising revenue for education.”
Before the details are hammered out, lawmakers will examine the results of a “disparity study” to determine whether provisions in the enabling legislation should guarantee participation by women and minority groups.
The successful ballot drive was supported by sportsbook vendors, casinos, the horse racing industry and the Washington NFL football team, whose stadium is in Maryland—and whose owner threatened to move the team to D.C., where sports betting is legal and where other Washington teams like the NHL’s Capitals are considering creating stadium-based sportsbooks.
COLORADO
Colorado voters approved Amendment 77 to the state’s constitution in last week’s election, giving residents of Central City, Black Hawk and Cripple Creek the authority to approve or veto new casino games and to raise single-wager limits.
With 84 percent of precincts reporting, 60 percent of Colorado’s voters approved of the amendment. Voters in the three casino host municipalities are expected to vote to expand the available games beyond slots, blackjack, poker, craps and roulette, the only currently allowable games; and to increase the limit on a single wager, set at $100 in 2008. The gaming industry and local politicians had complained that the low limit was pushing gamblers to other jurisdictions where the limits were higher.
“We appreciate that Coloradans supported our town’s right to determine our future so we can improve economic opportunities for the people who live and work here,” said Bruce Brown, Cripple Creek’s former mayor and a proponent of Amendment 77, in an interview with Denver7 TV news. “Things won’t change overnight, but I believe this will help us get back on our feet.”
“Hopefully, a modest boost in revenue will help as these towns rebuild their economies, as well as help students stay in school and graduate,” added former state Senate President Bill Cadman, who also supported the measure.
NEBRASKA
Nebraska voters ended the state’s ban on the gaming industry, approving three measures on November 3 that will allow Ho-Chunk Inc. to $300 million to build casinos at existing racetracks in the state’s largest cities, Omaha and Lincoln that will open next year. They will be followed by a racino at Atokad.
The voters approved the three constitutional amendments—Initiatives 429, 430 and 431—needed to make this happen by about two-thirds. This, despite opposition from Governor Pete Ricketss, who donated $250,000 of his own money to fight the measure.
Ho-Chunk President and CEO Lance Morgan, was a main mover behind Keep Money in Nebraska, backers of the initiative. The other was the Nebraska Horsemen’s Benevolent and Protective Association.
The Winnebago tribe owns one of the racetracks and the WinnaVegas Casino Resort in Iowa, however, Ho Chunk Inc. has no connection with the latter—just the racetrack. Ho Chunk Inc.’s original purpose was to diversify from gaming. By backing the Keep the Money in Nebraska effort, however, it is returning to gaming.
Morgan told the Associated Press, “We want to come out swinging with a high-quality, competitive product. We’re not going to slow down. We’re going to press down on the gas a little bit.”
To accomplish that, Ho-Chunk this week formed WarHorse Gaming LLC to operate the casinos. The Horsemen’s Association will be partnering with Ho-Chunk in operating the racinos.
Morgan told the Sioux City Journal, “This represented a large investment for us. I think it’s going to be a huge deal for Nebraska.” He added, “You don’t get more of a mandate than 65 percent – 70 percent on something. For it to come through, with all the hurdles is a huge deal.”
The amendment allows any of the six racetracks to become racinos. Moreover, new racetracks could be built. Some of the money raised in taxes will provide property tax relief. However, each individual casino will require the nod from state regulators.
Locations for possible racinos include Lincoln, Horsemen’s Park in Omaha, Fonner Park in Grand Island, Ag Park in Columbus, Atokad in South Sioux City, and Hastings.
Many Nebraska residents who voted for the measure said they supported the referendum because of the casino in Council Bluffs, Iowa, which attracts most of its patrons from Nebraska, who cross the Missouri River to reach it. Some estimate that they spend $500 million annually there.
Riverboat casinos in Council Bluffs, proved too much for Omaha’s Ak-Sar-Ben Race Track, which closed in the 1990s.
Proponents have estimated that the state will collect $65 million in taxes from the new industry.
LOUISIANA
Voters in at least 52 of Louisiana’s 64 parishes agreed to legalize wagering in their parishes on sports events. Three parishes, however, voted not to allow gambling in their legal limits. Results in another nine parishes were still being tabulated.
The parishes that approved the sports betting measure cover most of the state’s population and major urban areas. Louisiana already allows casinos, a lottery and video poker and slot machines at racetracks.
While the sports betting measure did well, state lawmakers must still set regulations and tax rates. That process could take up to a year, according to an analysis by the Associated Press.
The fight for sports betting saw more than $2 million in advertising from the political action committee called Louisiana Wins, which was supported by gambling companies. The measure was opposed by many local pastors and the conservative Louisiana Family Forum.
“The people of Louisiana have spoken. Louisiana was missing out on tax revenue from not having legal sports wagering, and now we will be able to raise revenue to support our state’s many needs,” Ryan Berni with Louisiana Wins said in a press statement.
Parishes where voters refused to legalize sports betting include rural Franklin, LaSalle and West Carroll. In nine parishes, the decision remained unclear: Beauregard, Caldwell, Catahoula, Grant, Jackson, Richland, Sabine, Union and Winn, according to the AP.
The state legislature must now determine which sports can be bet on, where the wagers can happen and how the activity will be taxed. The legislature agreed in a two-thirds vote to let parishes decide whether to legalize sports betting.
SOUTH DAKOTA
Deadwood has a storied past, one partly revived with the introduction of casino games. Thanks to the support of voters in South Dakota for Amendment B, sports betting can join the list of approved games.
The South Dakota Attorney General said any approval would also be allowed at on-reservation tribal casinos, according to KELO. The tribal governments that could offer sports betting include the Sisseton-Wahpeton Sioux, Yankton Sioux, Flandreau Santee Sioux, Lower Brule Sioux, Crow Creek Sioux, Rosebud Sioux, Oglala Sioux, Cheyenne River Sioux and Standing Rock Sioux.
Supporters say the amendment would boost tourism and add new tax revenue to help local cities, schools and the state.
CALIFORNIA
Although not an important issue to gaming in general, voters in San Joes approved a measure that would increase taxes on two local cardrooms, but also increase the number of tables they can offer.
The city’s two cardrooms, Bay101 and CasinoMatrix, can now spread 64 games rather than the previous limit, 49 games. The extra 15 tables will cost the casinos an increase in taxes from 15 percent to 16.5 percent. Proponents said it would add another $15 million to city coffers. City council voted 10-1 to place the measure on the ballot and it was approved by more than 70 percent of the voters. It was quietly supported by the cardrooms.
NEW YORK
Although New York had no gaming measures on the ballot, the results could spur some action for online sports betting in the state legislature.
State Senator Joseph Addabbo is still the chief cheerleader for online sports betting. He hopes he can muster enough support from his colleagues to approve a law by the end of the year.
Addabbo, chairman of the Racing, Gaming, and Wagering Committee, said Senate Bill 17D can bring in revenue for worthy programs. The bill failed to receive the required support in the previous legislative session.
Right now, sports betting is only allowed at upstate commercial casinos and tribal gaming properties. New York Governor Andrew Cuomo opposed statewide mobile sports betting, calling it unconstitutional, according to Casino.org.
Addabbo has continued to hammer home the loss of $1 billion a year in revenue as bettors place with wagers online in New Jersey and Pennsylvania.
“We can’t decline opportunities for revenue,” Addabbo said. “We don’t have the luxury.”
The senator also wants the three unassigned New York downstate gaming licenses issued sooner than 2023, the current plan.
