On Tuesday night, Danville City Council approved changes to the contract between Caesars Virginia, which is being readied for opening later this year, and its host city. The council voted 8-1 in favor of the approved changes.
According to the Danville Register & Bee, those changes include “an increase in the casino project’s cost to $750 million and language allowing the company to hire fewer workers than initially promised,” as well as “elimination of a promised separate entertainment venue,” which instead would “occupy a 40,000-square-foot conference center included in the project.”
Caesars Virginia is the third Virginia casino of five approved in 2020.
Contractual Changes Have Been In The Works “For Some Time”
City Manager Ken Larking said that the proposed changes to the contract, first signed between the city and Caesars in September 2020, have been brewing for some time, noting, “We’ve been working on this for months. Since construction began, we started talking about this.”
Caesars Virginia General Manager Chris Albrecht said, according to the Register & Bee,
“Every project evolves over time, and more than three years have passed since the development agreement was signed. We needed to update the agreement to ensure it reflects how the project has changed based on market forces and before the permanent resort opens later this year.”
Though a Caesars representative, he told PlayVirginia,
“We appreciate the continued partnership with the city of Danville to update our development agreement. The majority of our original agreement remains in place, and the update has components that benefit both sides that account for changes to the landscape over the past three years.”
Caesars confirmed that the project, which it’s aiming to finish by the end of the year, is “progressing extremely well, with substantial completion of the exterior of the facility and framing out of the interior spaces,” with more than 800 workers a day currently on-site.
Caesars Virginia Cost Continues To Rise
The Caesars Virginia website notes that the permanent Danville complex, set to open later this year, will feature “a 320-room hotel and world-class casino gaming floor with over 1,300 of the most exciting slots, 85 table games, 24 electronic table games, WSOP room, and Caesars Sportsbook. The resort will also feature a full-service spa, pool, upscale bars and lounges, and a variety of dining options.”
The site also promises a “2,500-seat live entertainment theater, and over 50,000 square feet of meeting and convention space,” which could be amended slightly pending Tuesday night’s vote.
The vote raises the original amount of the capital investment, set in 2020 at $400 million, to $750 million. This total has been adjusted twice before and was last amended to $650 million in August 2022, which Larking attributed in the Register & Bee story to increased construction costs, including a parking garage that was not part of the original plans.
The plan, which initially promised 1,300 jobs, was amended after Tuesday night’s vote to offer between 900 and 1,300 positions, reflecting what Larking referred to as post-pandemic realities.
Albrecht told the Register & Bee,
“Since we began working on this project, the hospitality landscape has changed significantly. As our industry evolves, the employment range in the development agreement allows us the flexibility to operate a world-class resort in a way that leaves room for innovation, efficiency, and the exceptional experience we’ve promised to deliver in Danville.”
Record Month For Danville Casino Despite Down Quarter For Caesars
The temporary Caesars casino operating in Danville is one of three active casinos in Virginia. Together, they had a record month in March, bringing in a combined $65 million in gambling revenue.
The state’s only current permanent casino, Rivers Casino in Portsmouth, led the way with $27.7 million in adjusted gross revenue. Caesars contributed a little more than $21 million, with its 804 slot machines generating more than $16.4 million AGR and the rest coming from its 33 table games. That resulted in $1.26 million in revenue for Danville in the record-setting month.
Despite the strong showing in Virginia for Caesars, the first quarter of 2024 hit the company hard. Bad weather in the eastern US and low table hold at major casinos represented the main causes for revenue shortfalls.
While Caesars noted that the contract renegotiations with Danville had been in the works and represented “routine” changes, the trajectory of Caesars’ revenue in the first quarter doesn’t help matters. It also serves as a reminder that plans change, and when casino developers, as they are currently doing in Petersburg, put forth a plan, one shouldn’t get their heart set on the numbers.
