A new study, Gaming in the Commonwealth 2019, created by the Joint Legislative Audit and Review Commission, citing The Innovation Group results, painted a split image of attitudes towards expanding gaming in Virginia.
The report focuses on proposals for the construction of five new terrestrial casinos and examines what they could contribute to the local economy through taxation, employment and charitable causes funding.
While the study predicted an annual total tax revenue of around $262 m, the potential for sports betting was downplayed to have a major impact. “Sports wagering and online casino gaming would be expected to generate additional state gaming tax revenue but would have little additional economic impact,” it said.
“Sports wagering is estimated to generate state gaming tax revenue ranging from $22m to $55m each year, and online casino gaming is estimated to generate state gaming tax revenue of $84 million each year.”
It continued, qualifying those estimates: “A fully developed sports wagering industry in Virginia could generate up to $55m in annual gaming tax revenue for the state, depending on how it is structured, and online casino gaming could generate about $84m each year. Unlike online casino gaming, which would most likely depend on the opening of casinos, sports wagering could be implemented without casinos and could be offered sooner.”
The study outlined that, according to projections from The Innovation Group, resort-style casinos could be built and maintained in Bristol, Danville, Norfolk, Portsmouth, and Richmond. It said: “These estimates assume an initial $200m to $300m capital investment and an annual gaming revenue state tax rate of 27% (the national median).
“Casinos in these five locations are projected to annually generate about $970m in net gaming revenue and approximately $260m in gaming tax revenue for the state. For comparison, the Virginia Lottery generates over $600m annually after prizes are paid out.”
The proposed casino developments also risk that existing gaming returns could be cannibalised, the report said. “Casino gaming is projected to negatively affect revenue generated by most forms of existing gaming in Virginia, which would in turn decrease the revenue available for the causes they support.
“The biggest impact would be to revenue generated by historical horse racing (HHR), a small portion of which supports Virginia’s revived live horse racing events. This revenue is projected to decline substantially (45%) from what it likely would have been without casino competition, and therefore tax revenue generated by HHR wagering would also decline.
“Lottery proceeds for Virginia’s K–12 public education are projected to decline slightly ($30m or 3.6%). Charitable gaming proceeds are projected to decline slightly at the statewide level ($3.1m, or 4%), with larger localised impacts to charitable gaming operations located near casinos and the organisations they support.”