Two gambling bills passed by the Virginia legislature are waiting the signature of Governor Ralph Northam. Senate Bill 36 and House Bill 896 would permit five land-based casinos, online sports betting and up to 2,000 additional historical horse racing machines. Northam can suggest changes to the legislation as a condition of signing, which must occur by April 7.
Senate Bill 36 permits the Virginia Lottery Board to issue one casino license in Norfolk, Bristol, Danville, Portsmouth and Richmond, following local voter approval in the November 2020 general election. Each applicant for a casino license must make a $300 million minimum capital investment and the operator must have a minimum 20 percent equity interest in the casino. The licensing fee is $15 million for 10 years.
The five approved casinos will be allowed to offer slot machines, table games and on-premises online casino gaming. A casino will be able to operate for up to two years in a temporary facility that must be built on the same site as the permanent facility.
The Senate bill also allows casino operators to operate on-site sportsbooks but does not authorize casino operators to conduct online and mobile sports betting. However, the House bill allows the Lottery Board to give casino operators preferential treatment in the process of awarding the 12 new online and mobile sport betting licenses.
The bill taxes the casino’s annual net win at 18 percent on the first $200 million of gross gaming revenue, 23 percent on gross gaming revenue between $200 million and $400 million and 30 percent on gross gaming revenue above $400 million.
In fairness to Colonial Downs Group, owners of Virginia’s only horseracing track plus off-track betting and historical horseracing machines, the bill allows the company to add 600 historical horseracing machines each time a local casino referendum passes, up to a maximum of 2,000 additional machines. Up to 1,650 of the additional machines may be located in Dumfries, Virginia, located 30 miles from Washington, D.C.
HB 896 permits 12 online-only operators to offer statewide mobile sports betting, giving casinos “substantial and preferred consideration.” If all five new casinos are granted sports betting licenses, only seven of the 12 authorized licenses would be available for mobile-only operators. The sports betting bill is not linked to the casino bill or casino openings, so the seven mobile-only sports betting operations could start sooner.
Operators would pay a $250,000 application fee and a $200,000 license renewal fee every three years. They also would pay a 15 percent tax on adjusted gross gaming revenue. Wagering is prohibited on Virginia collegiate sports and proposition bets on any individual collegiate athlete. Operators also must purchase official league data to settle in-play wagers but they can use any data source to settle end-of-game bets.
HB 896 also requires the Lottery Board to give “substantial and preferred consideration” only to a major league sports franchise headquartered in Virginia or one that plays five or more regular season games per year at a facility in Virginia. If the National Football League’s Washington Redskins builds its new football stadium in the state it could obtain a sports betting license. Any sports betting license issued to a major league sports franchise would not count toward the 12 authorized licenses.
The two bills are designed not only to increase tax revenue―by keeping gambling dollars in Virginia rather than neighboring states―but also to create jobs and revitalize struggling Virginia cities.
