Virginia Casinos

Virginia will soon be home to at least four casinos. After the residents of Bristol, Danville, Norfolk, and Portsmouth voted to allow casino locations to be built inside their city limits, preparations for construction began in earnest.

These referenda became possible after the Virginia Assembly and then-Gov. Ralph Northam came to an agreement in April 2020. The new law provided for the possibility of casinos in Virginia cities that met certain criteria.

Richmond also had an opportunity to join the mix. However, residents in the Virginia capital city narrowly voted against the project during its 2021 referendum.

Casino operators such as Caesars Entertaiment and Hard Rock have entered into agreements to build branded casino locations in some of these cities. The Pamunkey Indian Tribe will also work to build its own venue.

In essence, the only thing left to do is build the properties and turn on the slot machines. Virginia should see its first “temporary” casinos in the second half of 2022, with the rest opening in 2023 and 2024.

In the meantime, Virginians can avail themselves of the newly-launched sports betting. Virginia became an active sports betting state in January 2021.

VA casino host cities

Legislation allowed for casino gambling in five cities:

• Bristol
• Danville
• Norfolk
• Portsmouth
• Richmond

Those cities were chosen based on criteria set forth by the legislature, including:

• 40% of the city’s real estate is exempt from local property taxes
• 4% higher unemployment rate than that of the state
• 20% poverty rate
• 20% population decrease from the previous year

Voters in all of the cities except Richmond formally approved the projects during the 2020 election cycle. They simply needed half of the votes, but each casino referendum passed by a convincing 2-1 margin.

Richmond voters, though, opted against casino gambling and voted no to a casino referendum on 2021 Election Day.

Virginia casino launch timeline

Opening the first VA casino

Currently, the four host cities have received approval of their casino partners from the VA Lottery, the regulatory agency for gambling in the state.

In addition, the cities passed measures during the November 2020 election that allowed voters to decide if they would allow the construction inside their towns. Each referendum passed overwhelmingly, and site work and construction are moving forward.

At present, regulators continue to finalize the regulations to govern casino gambling in the commonwealth. As it stands, “Bristol Casino, future home of Hard Rock,” which will be a temporary version of Hard Rock Casino and Resort Bristol,” will likely open first. The scaled-down temporary resort should welcome guests by the end of June 2022.

VA casino tax revenue

Virginia, and the rest of the country, for that matter, is experiencing some financial challenges as its economy emerges from the pandemic-forced shutdowns.

Needless to say, revenue for the state is an important topic. That’s why casino gambling’s impending arrival in 2022 or 2023 cannot come too quickly.

When VA casino gambling finally does launch, however, it is estimated to provide $262 million in tax revenue.

Casino revenues will be taxed on adjusted gross revenue according to the following schedule:

• 18% on the first $200 million, 6% of which is designated to the host city
• 23% on the amount exceeding $200 million and not exceeding $400 million, 7% of which is designated to the host city
• 30% on the amount exceeding $400 million, 8% of which is designated to the host city

The big beneficiary of casino tax revenue outside of the host cities is the public fund supporting school infrastructure projects including school construction and upgrades. It receives the remaining funds after the cities are paid, minus:

• 1% by a VA Indian tribe operator to the Virginia Indigenous People’s Trust Fund
• 0.8% to the Problem Gambling Treatment and Support Fund
• 0.2% to the Family and Children’s Trust Fund

History of gambling in VA

Some form of gambling in Virginia has been legal since 1973 when charitable gambling became legal.

Today, charitable gaming includes several forms of bingo and poker. Its 1.125% tax generates more than $265 million per year for the state.

In 1988, the Virginia Lottery began operating in the state. Today, more than 100 games are offered by the VA Lottery, including the multi-state Powerball and Mega Millions draw games.

The state has more than 5,000 retail locations, and all profits (roughly 30% of ticket sales) are designated for education. In 2020, the Lottery generated $595 million for schools.

One year after the introduction of the Virginia Lottery, horse racing in Virginia became legal.

The market was averaging about $100 million per year in revenue from 2000 until 2014, when Colonial Downs was closed due to a conflict between the owners and breeders.

Colonial Downs reopened in 2019, but the live racing schedule was ultimately canceled because of the COVID-19 pandemic. However, officials from the Vinton racetrack are planning a full 2021 season with live spectators. Shenandoah Downs in Woodstock is also planning the same for its fall season of harness racing.

In 2016, several daily fantasy sports sites received licenses form the state. And in 2018, HB1609 approved historical horse racing machines (HHR) that allow bettors to wager on previously run races.

In May 2018, the federal ban on sports betting was lifted by the US Supreme Court. It started the more than two-year journey toward legalizing sports betting and casino gambling in Virginia.

So far, 2021 is already a banner year for gambling in Old Dominion. The launch of sports betting in January is nothing short of a boon for the state.

Casinos are expected to arrive sometime in 2022 or 2023. So, Virginia is well on its way to becoming a full-service gambling state.