While Virginia’s been doing more in recent years to expand gambling, including passing a crucial 2020 referendum that’s led to three casinos opening in the commonwealth, Virginia online casinos remain illegal. And now that a corporation opposed to them has been tapped to spearhead a new casino project in Petersburg, what does that mean for Virginia’s online betting prospects?
It’s been an eventful 2024 so far for those who have championed a Petersburg casino. Thanks in large part to Sen. Lashrecse Aird’s efforts, the General Assembly passed legislation allowing Petersburg residents to vote this November on bringing a casino to the city—a move that also helped permanently close the door on Richmond’s twice-failed citywide vote to become a casino host.
However, Cordish Companies, the developer likely getting the casino nod in Petersburg, has opposed gaming in the past. This raises concerns that their presence in the state could stifle future igaming expansion.
Cordish’s selection raises ire of local stakeholders
After five different suitors presented plans to Petersburg residents at a town hall meeting Aird hosted, the Petersburg City Council voted for the Cordish Companies’ joint bid with Bruce Smith Enterprise in a closed-door meeting, a decision Aird immediately criticized for veering away from what she’d envisioned. She said of the surprising vote,
“Making Petersburg an eligible host city and allowing for a referendum was contingent upon the city’s willingness to have a process, increase public engagement, [and] prioritize workers and the development of a plan for how revenues would be used to uplift the people in our community.”
Aird doubled down on her criticism last week, telling the Progress-Index that the city is engaging in “political theater,” labeling it “a distraction from this council’s true intentions to move forward with no process, no public engagement, and proceed in the least transparent way imaginable.”
For those hopeful that Petersburg will get a casino, it’s still unclear how these moves will impact the upcoming election, especially now that a labor union affiliated with hospitality workers is threatening a lawsuit against the city, claiming the councilmembers violated state law with the closed-door session.
Cordish opposes online casinos amid concerns of retail cannibalization
Recent developments could threaten efforts to bring iGaming to the commonwealth. Cordish has emerged as an opponent of online casinos, citing what happened to its business in neighboring Maryland.
According to a recent PlayUSA article, Cordish Companies CEO David Cordish and Cordish Gaming Group President Rob Norton explained their opposition at last month’s East Coast Gaming Congress in Atlantic City, New Jersey.
Physical sportsbooks launched in Maryland about a year before online sports betting started, and Norton contends that once online wagering got underway, Cordish lost 65% of its Maryland sports betting revenue. Table game revenue at its Maryland Live! Casino also decreased for the first time in 10 years. Norton asserted,
“What we learned from that was sports betting is incredibly additive to casino if it’s in a retail form. We saw 7,000 additional customers a day. They played more table games or slots, and we had a fantastic growth cycle in that year, with sports betting doing quite well. When digital turned on, 65% of our revenue from sports betting vanished overnight, which affected our restaurants, our bars, but most importantly, our table games and slots.”
Norton also charged that in Pennsylvania, where online casinos are legal, having half of online gaming revenue come from physical casino customers reduces spending at the properties.
In that same article, Norton said he doesn’t want iGaming to be legalized in part because:
“We believe in an entertainment destination experience, and we believe in creating that environment where we are a community partner. We’re part of that entire community; we create a destination for people to go and have fun. That’s our DNA. That’s not what iGaming does. So our issue is not that we’re afraid of the money. We’re going to do fine. Our issue is that we just don’t believe that’s the best path forward in the gaming space.”
Cordish: Igaming compromises property tax revenue for brick-and-mortar casinos
Cordish added that while states with iGaming do get that revenue, they risk losing out on property tax revenue from Cordish and other casino companies, explaining,
“If we get iGaming tomorrow, we will adapt and do the best we can to compete on the internet. We’re not going to increase our bricks-and-mortar capital expenditures building new hotels and new performance halls, and the state is going to have a decrease in property taxes. These spinoff taxes lost more than equal what iGaming people would pay.”
Online casinos also typically face resistance from people who fear that they will create temptation for those susceptible to gambling addiction. A Fast Company article from last week covering the SBC Summit North America, where “industry executives acknowledged the difficulty they’ve had in expanding the legalization of online casino games” despite their belief that gambling’s future lies online, said,
“The industry cites several challenges to wider approval of internet casino gambling, including fears of increasing gambling addiction by ‘putting a slot machine in people’s pocket’ … adding casino companies need to do a better job of publicizing player protections the online companies offer.”
Cordish’s chief operating officer, Zed Smith, told the Baltimore Business Journal he believes that casinos can positively transform their host cities.
“The whole core of our business is to transform cities,” he said. “That’s one of the reasons I joined this company. I was a small developer, and I saw the impact that Cordish was having in large cities. And that’s something I really wanted to commit my career to.”
A special session of the General Assembly is possible. However, with the controversy around a vetoed skill games bill and a right-to-contraceptives bill still unresolved, online casinos remain on the shelf in Virginia.
