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 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.

Along with the four cities, Richmond may also have a casino in its future. The capital city chose to delay its referendum until 2021, so it will be a year behind the others. However, if the results of the first four votes are any indication, Richmond will soon be a casino gambling city.

Casino operators like 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 casinos toward the end of 2022 or sometime in 2023.

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

The newly-passed legislation allows 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

All five cities have selected their preferred casino partner, but some cities are further along in the planning stage than others.

Regardless of where they are in the planning process, however, the real race to open the first casino in VA begins after the regulations are filed in April 2021.

Virginia casino launch timeline

Opening the first VA casino

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

In addition, four of the cities passed measures on the November 2020 that allowed voters to decide if they would allow the construction inside their towns. Each referendum passed overwhelmingly, and plans are moving forward.

Richmond residents will have to one more year to voice their opinion on the matter. The state capital elected to delay its referendum until 2021, so developments there will be delayed for a year.

At present, regulators are deeply engaged in writing the regulations to govern casino gambling in the state . Those regulations are due in April 2021, after which applications for licenses will be made available. The Lottery has up to one year after receiving an application to issue its decision.

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 Lottery, including the multi-state Powerball and Mega Millions games.

The state has more than 5,000 retail locations and all profits, roughly 30% of ticket sales, are designated for education. In 2019, the Lottery generated $595 million for schools.

One year after the introduction of 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 this year, but the live racing schedule was ultimately canceled because of the COVID-19 pandemic. However, Shenandoah Downs is holding its fifth season of harness racing, but the facility is closed to in-person spectators due to the coronavirus.

In 2016, several daily fantasy sports sites received licenses form the state. And in 2018, HB1609 approves historical horse racing machines 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.

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.