The Virginia House and Senate has approved legislation that would allow casinos in five cities: Bristol, Danville, Norfolk, Portsmouth and Richmond.
Each casino would require a local referendum for approval. The measures also would expand the Virginia Lottery Board to provide oversight and fund problem gambling services. The main differences in the two bills are proposed rates of taxation. Other legislation would legalize sports betting.
The House passed House Bill 4 in a 61-33 vote, followed by the Senate vote of 29-11 on Senate Bill 36, sponsored by state Senator Louise Lucas, who has pushed casino legislation for two decades. Prior to the vote she said passing the bills would be “our Amazon. I don’t have words to describe to you now, because after waiting so long to get to this point, I feel like I’m levitating.”
Each chamber now will review the other’s legislation, and a conference committee may be required to reach a compromise on tax rates. The session will end March 7.
‘A Significant Development’
Following the House vote, Delegate Terry Kilgore said, “Today, in passing HB 4, the House of Delegates embraced our goal to bring a significant economic development project to Bristol. I look forward to working with my colleagues in the House and Senate to pass this bill. Southwest Virginia needs the new jobs and additional tax revenue that will be generated by the Bristol Resort and Casino as Bristol Hard Rock.”
Delegate Barry Knight, the House bill’s sponsor, noted, “It’s got five locations that are economically depressed areas that could use the jobs in the state of Virginia.”
The United Company Chairman and Chief Executive Officer Jim McGlothlin, one of the developers of the proposed Hard Rock Bristol Resort and Casino, said, “I appreciate the strong support that HB 4 and SB 36 have received as they have advanced through each chamber. Legislators clearly recognize that Bristol needs a long-term, sustainable solution for our local economy. We still have a long way to go in this legislative session before the bills are reconciled and approved by the General Assembly and signed into law by the governor, but I am very encouraged by the progress we are making.”
Pamunkey Tribe Is First In Line
The legislation allows each of the five communities to choose its local development partner following criteria outlined in the bill; the state must approve the choice before a referendum is held. However, an amendment gives the Pamunkey Indian Tribe preferred status in developing its proposed casinos in Richmond and Norfolk. The tribe has agreements to acquire land and build casinos in those two cities.
The bill also includes provisions for a problem-gambling prevention and treatment fund and a voluntary exclusion program.
The House bill includes a two-tier system for taxing gaming revenue, based on the documented financial investment in a casino. Specifically, a casino built for the minimum requirement of $250 million up to $350 million would pay 15 percent on its first $150 million in annual gaming revenue; 20 percent on the next $150 million; and 28 percent on revenue of $300 million and higher.
A casino investment of $350 million or more would pay 15 percent on the first $200 million in annual gaming revenues; 20 percent on the next $200 million; and 28 percent on revenue of $400 million and above.
The proposed Bristol Hard Rock Resort and Casino and the Pamunkey Norfolk casino are projected to cost $400 million each, and the Pamunkey’s proposed Richmond casino is projected to cost $350 million. Costs for Rush Street Gaming’s proposed Portsmouth casino have not been estimated yet, and Danville officials haven’t chosen a casino project or operator. The House bill states a locality would receive between 5 percent and 7 percent of gaming taxes.
The Senate bill does not base tax rates on a casino’s value. It would tax the first $150 million of annual revenue at 27 percent, the next $150 million at 31 percent, and all annual revenue above $300 million at 40 percent.
The Senate version states that a locality would receive between 9 percent and 11 percent of gaming taxes. Another difference is that the House bill would charge a one-time fee of $5 million for an operator’s license, compared to the Senate’s proposed $15 million license fee.
The casino bill strictly limits venues to the five named cities; however, the Eastern Band of Cherokee Indians have proposed a casino project at the Pinnacle development, just outside the Bristol city limits in Washington County. Just before the vote, Principal Chief Richard Sneed said he wishes lawmakers would slow down and delay voting.
“I’m always nervous in anything that governments are doing when it’s, ‘We have to do it right now.’ Usually, the results are not optimum,” Sneed said. “I was kind of taken aback by some of the comments that, you know, ‘Well the Cherokee are just looking to get in this market.’ Yeah. So is everybody else.”
Besides gambling, the Eastern Band’s proposal would include a water park, golf course, amphitheater and more.
Lottery Bill Passes
A separate bill to allow online lottery ticket sales passed the House in a 77-21 vote and the Senate in a 33-6 vote. If Governor Ralph Northam signs the measure, it will take effect July 1. Virginia Lottery Executive Director Kevin Hall said online buyers must create a username and password and verify their age, phone number and address. The app also lets buyers limit the amount of time and money spent.
Like the House, the Senate also voted to ban “skill” or “gray” machines. The House voted 80-15 to approve HB 881, proposed by General Laws Committee Chairman David Bulova. The Senate Finance and Appropriations Committee voted 14-2 to pass SB 881, sponsored by Finance Chairwoman Janet Howell, and Senate Minority Leader Tommy Norment. Hall claimed the lottery could lose $140 million in sales and $40 million in profits in the current fiscal year due to direct competition from more than 9,000 skill games in 2,000 lottery outlets.
The industry contends the machines are legal under current state law because they offer games of skill, not chance. Experts said the games could produce $83 million to $468 million in revenue for the state if they were regulated, depending on the tax rate.
Video machine distributor Queen of Virginia Skill & Entertainment said in a release, “Make no mistake about it, a ban on skill games will result in significant job loss in the restaurant, bar and convenience store industry and puts countless small businesses in jeopardy of closing.”
Legislators also approve sports betting, to be regulated by the Virginia Lottery, as a way to remove it from the black market. Both bills would tax sports betting revenue at 20 percent. Earlier, the state’s audit commission estimated at a 12 percent tax rate, sports betting could generate $22 million to $55 million annually for the state.
The two bills have some differences. For example, the House version doesn’t allow wagers on public Virginia university teams or in-play bets on all college sports; the Senate version allows both. Also, the Senate bill would tax sports betting revenue at 15 percent and the House bill at 20 percent. Limits on mobile licensing also are different in each bill. Both bills, however, would allow a physical sports betting facility if it’s owned by a major league sports franchise.
Lawmakers last year approved legislation allowing online and retail casino gambling, sports betting and poker. However, the measures required a study of gaming in Virginia and reauthorization in the current session.
