Officials at Chicago-based Rush Street Gaming presented an update on the $300 million Rivers Casino planned for Portsmouth, Virginia at a recent city council meeting. With a projected opening date of fall 2022, the venue could be the first casino in the state, expected to open as soon as fall 2022. It will feature a gaming floor, sportsbook, event center, outdoor entertainment venue and several restaurants and bars and create 300 construction jobs and 1,400 permanent jobs. However, the officials said even though a hotel appears in all the marketing materials, they can’t commit to when it will be built.
Rush Street Senior Vice President Mike Tobin said, “Our goal is to be the first permanent casino open in the state of Virginia. So we are really focused on getting the casino as open as quickly as possible. Our goal is to get the hotel open at the time that it can be most effective for being a successful addition to the community of Portsmouth.”
Tobin noted Covid-19 has impacted hotels over the past year and new hotels especially need to consider guests’ concerns and expectations. Tobin said rushing into a hotel and ending up with empty rooms could hurt the overall project. “The last thing any of us want to do is have a hotel that opens to the wrong time relative to the hospitality market and is not successful. Because that will hurt the community and be detrimental to the revenues of the casino,” Tobin said.
Portsmouth Vice Mayor De’Andre Barnes said he had concerns about competing without a hotel. “I’d rather see it all happen at once. If the casinos in Norfolk and Richmond have hotels and more places to stay and things to do nearby, where would people choose to go? Too many people in the city operate as if Portsmouth is already a destination. We still have to make it a destination.”
Interim City Attorney Burle Stromberg explained Rush Street Gaming’s development agreement with the city allows the firm to begin construction on the hotel at any time, but requires work to start the when the Portsmouth venue when it reaches certain revenue benchmarks once Norfolk’s casino opens. As explained previously, if Portsmouth’s casino earns a profit of $175 million in one year or $250 million over two years while competing against Norfolk’s casino, then Rush Street must begin building the hotel within a year. However, if work on the hotel hasn’t started after four years of the Portsmouth casino’s opening, then the city’s economic development authority will take over the project and can seek a new builder.
Rush Street Gaming officials have not publicly explained why the approval of Norfolk’s resort casino would have impacted when or if it builds the hotel for the Portsmouth casino. However, Portsmouth’s economic development director said “market conditions” would play a role in what is ultimately built in Portsmouth.
The whole situation has frustrated Portsmouth Vice Mayor De’Andre Barnes, who said, “The citizens believe all of the amenities will be here at the same time. They have to meet those checkpoints, if they don’t in four years, then the city is the one who will have to basically build the hotel. If the casino is not performing, who will build the hotel?”
Tobin told council members “absolutely we are building a hotel,” but when pressed by Barnes for a timeline, he couldn’t give one, citing again the need to study the hotel market in Hampton Roads. “I’m sorry that I do not have a more definitive answer, because I don’t have a more definitive answer,” Tobin said.
Meanwhile in Richmond, city officials held the second of two virtual public meetings about a new casino there. The city received six proposals from casino operators. In May or June, an evaluation committee will select which proposal to recommend to the city council and a referendum will be held in November to determine if voters want a casino.
New Orleans-based consultants, Convergence Strategy Group, estimated new tax revenue from the casino could generate $270 million to $284 million in annual revenue, and produce $30 million annually for the city.
At the public meetings, most of the questions were about social costs and safety. Richmond Director of Economic Development Leonard Sledge stated, “We are mindful of issues and concerns that individuals have. As a part of the conversation and dialogue that we’re having broadly, it’s so we can hear the issues and concerns, but also discuss ways that we mitigate the impacts of those.”
Last year the legislature passed a bill allowing casino gambling in five cities: Norfolk, Portsmouth, Danville, Richmond and Bristol. All except Richmond have held referendums already and are partnering with casino operators to develop the venues. The Virginia Lottery will regulate the new casinos.
