A new study undertaken by the Joint Legislative Audit and Review Commission has examined the potential impacts of casinos and gambling in Virginia, with the general assembly of the state expected to be discussed each year.
The legislature, introduced last year by Governor Ralph Northam, will have to vote to re-enact the bill to proceed with the issue, with SB 1126 giving the Virginia Lottery Board regulatory rights.
Developed in conjunction with the Innovation Group’s national gaming consultant, the study identifies Bristol, Danville, Norfolk, Portsmouth and Richmond as the prime locations for building and sustaining resort-style casinos.
Assuming an initial $200 million to $300 million in capital investment and an annual gaming income state tax rate in line with the national median at 27%, the five casinos are expected to generate around $970 million in net gaming revenue annually and about $260 million in gaming tax revenue for the state.
Approximately one-third of total revenue is expected to be generated by out – of-state visitors, with Danville and Bristol being large beneficiaries due to small local markets. And, if developments were to take place in North Carolina and Tennessee, both would be vulnerable.
Each of the proposed entities would employ at least 1,000 people with a $33,000 median wage, with nearly half being described as “low-skill and low-wage.”
A Northern Virginia casino, which was not approved in SB 1126 but studied as part of the study, would raise statewide gaming tax revenue by an estimated additional 59 percent or $155 million and hire an additional 3,200 employees.
Approximately four years after approving legislation passes, the opening of land-based casinos will take place, with casino gaming adversely impacting revenue generated by most types of current gaming.
Historical horse racing is primarily among these, a small portion of which funds the resurrected live horse racing activities in Virginia, with revenue expected to fall by 45%.
A fully developed Virginia sports wagering industry could produce up to $55 million in annual state gaming tax revenue, depending on how it is organised, with online casinos estimated at about $84 million each year.
Among the JLARC report’s recommendations is:
- Establish a dedicated, stable funding source for problem gambling prevention and treatment, even if additional forms of gaming are not authorised.
- Include a requirement in any casino authorising gaming legislation that:
- Applicants for a casino license submit a responsible gaming plan as part of their application, and casino operators obtain accreditation for responsible gaming practices.
- Casino licenses will be awarded through a competitive selection process, overseen by a designated committee whose members have experience in business finances and operations and represent state and local interests.
- An independent consultant, hired by the state, assess the accuracy and feasibility of casino development proposals.
- Owners and officers of any company vying for a casino operators’ license submit to and pass in-depth background and financial investigations.