Yes, Santa Claus, there is a Virginia.
No, not a little girl whose query about St. Nick prompted the most-read editorial in history.
But a state in the South Atlantic region of the United States that’s given us a gift—a prospective expansion of gaming big enough that we can break from our obsession with the coronavirus to consider its implications.
As of this writing, Virginia is only a signature away from the authorization of five casinos, sports betting and up to 5,000 historical horse racing machines. Even after Governor Ralph Northam signs off on the plan, the full expansion won’t be a done deal. Local communities will still have to pass casino referendums in November. But the assumption seems to be that it will happen.
Casino developers would have to invest at least $300 million in each project, which might seem a bit steep in small and remote towns like Bristol, way out west on the Tennessee line. But casinos in Norfolk and Richmond certainly can support that level of investment. And given so little competition to the south and west, they should be decent revenue-generators.
At this point, it seems a safe bet that Virginia would be a more than 10,000-gaming machine market, counting instant racing machines among that number. Add table games and other equipment, and that’s a material chunk of change for gaming suppliers.
As of now, no public companies are prominently mentioned as casino operators. Hard Rock International, the Pamunkey Indians and the Cordish Cos. are among prospective operators in the news, though other companies will arise.
As for sports betting, Chris Grove of Eilers & Krejcik Gaming estimates a mature market at $447 million in revenue.
Of course, no market is a pure gift. There is a Grinch, too, Virginia: oversaturation.
A casino in Richmond, and a 1,650-gaming machine facility in Dumfries, 32 miles south of Washington, D.C., would strike the southern territories of MGM Resorts’ National Harbor in the Maryland suburbs, and to a lesser extent, the other casinos in Washington-Baltimore and southern Delaware.
Saturation has increasingly become an issue, as new casinos in the northeastern U.S. continue to underperform projections, including such vaunted multibillion-dollar projects as Resorts World Catskills and Wynn’s Encore Boston Harbor.
With no new projects in the Middle Atlantic or New England, casinos are getting some time to breathe, and are even enjoying a boost in business as sports betting and, in cases such as Pennsylvania, online gaming take hold.
But more projects are on the horizon, in places like Massachusetts, Connecticut and the New York City area, though they may be some years off. In other words, from a competitive casino perspective, northeastern casino operators only have a reprieve from increasing competition.
It’s An Ill Wind…
…that doesn’t blow somebody some good, the old saying goes.
So, in that spirit, we’ll end with a note on the Covid-19 coronavirus, after all.
Nearly every phenomenon presents an opportunity to someone. In this case, locking down cities and entire regions of countries to contain a virus might be driving people to ecommerce, including gambling.
As such, it was of interest to note that GAN has seen its online sports bets jump 13.9 percent in Italy, since much of northern Italy has been locked down. That compares to an 8.4 percent rise year-to-date.
Of course, the retail markets will reopen at some point. But in the meantime, online operators have an opportunity to win customers and change habits.
