RICHMOND, Va. (WRIC) — A new study found competing casino proposals in Petersburg and Richmond could coexist while remaining profitable but, so far, local leaders are rejecting that idea.
The audit also warned new projects could pull money away from casinos already being built in other parts of Virginia, as well as the historical horse racing industry.
The Joint Legislative Audit and Review Commission presented the analysis from “The Innovation Group” to a panel of state lawmakers on Monday to help guide their decision-making ahead of the 2023 session.
“It’s likely to be a brawl and it’s likely to have every lobbyist in Richmond involved as we can see from the audience,” Senate Finance and Appropriations Committee Chair Janet Howell (D-Fairfax) told the crowd after the presentation.
In 2020, the General Assembly passed legislation allowing five “economically distressed” host cities to build casinos with voter approval. Developments in Bristol, Portsmouth, Norfolk and Danville are already moving forward.
Richmond hit a snag when voters said “no” in a local referendum last fall, paving the way for neighboring Petersburg to try their hand with a little help from state lawmakers. Now, the two Central Virginia cities are competing for legislative support and their economic futures.
In a press conference on Monday alongside Petersburg city leaders, Senator Joe Morrissey (D-Petersburg) said moving forward with both casinos would result in a smaller project and fewer jobs for a city in desperate need of an economic boost.
“If we have two casinos in Petersburg and Richmond, they would cannibalize each other. You would not get destination casinos. You would get two regional casinos,” Morrissey said. “Petersburg might be smaller than Richmond, but I can assure you, we’re not going to be bullied by Richmond.”
Morrissey said Petersburg needs the project more and Richmond “already had their chance.”
Charles Willis, president of the Richmond Highway Neighborhood Civic Association, argued Richmond would be a better destination and a higher dollar deal for the state.
“South Richmond and Richmond alone are in need of the jobs, in need of the development, in need of the opportunities,” Willis said.
The JLARC study projects a Richmond casino would generate $249 million in net gaming revenue whereas a Peterburg casino would generate $140 million. Without the Richmond casino, the report says Petersburg would generate $204 million in net gaming revenue and $12.2 million in local taxes for the city. All of the study’s projections refer to 2028, which is expected to be the first full operating year for either casino, according to the analysis.
In a statement on Monday, Richmond Mayor Levar Stoney said, “We’re pleased that the facts presented in the JLARC study reaffirm Richmond as the best choice for a Central Virginia casino. We look forward to further discussion on this important economic development opportunity, which would provide well-paying jobs and much-needed revenue to address priorities.”
Competing interests outside of the region are likely to further complicate the legislative process. While having additional casinos would increase net gaming revenue statewide, certain developments and localities would take a hit, according to the report.
The study projected additional casinos would reduce net gaming revenue by $55 million for projects that are already authorized. By 2028, it said the Petersburg casino alone would reduce local tax revenue in Norfolk, Portsmouth and Danville by approximately $1 million each, though there would be “no material impact” on the Bristol development.
The report also projected the Petersburg casino would decrease historic horse racing revenue by $46 million. Adding Richmond would decrease revenue by $105 million.
“That is my major concern,” Senator Mamie Locke (D-Hampton) said in an interview on Monday. “These are localities that could ill afford to lose that kind of revenue.”
Senator Louise Lucas (D-Portsmouth) has been on record saying she doesn’t think any new casinos should be authorized in Virginia before lawmakers can evaluate the performance of existing projects.
“I’m not going to say ‘no, never,’” Locke said when asked about her colleague’s position. “Give them an opportunity to operate fully for at least a year.”
A temporary casino opened in Bristol earlier this year with a permanent casino expected to open in 2024. The Portsmouth casino is set to open in 2023. Norfolk and Danville casinos are set to launch in 2024.
Morrissey said he plans to introduce legislation in 2023 that would allow Petersburg to move forward with a local referendum while blocking Richmond’s progress for at least “a certain number of years.”
Meanwhile, Morrissey said Petersburg is planning to request proposals from at least six potential developers this week. He said they “would not entertain” any regional casino proposals.
Governor Glenn Youngkin has emphasized economic development in Petersburg but his office declined to comment on the report.