With neighboring West Virginia recently going all-in on its gambling industry, Virginia is looking to remove itself from the short list of states with no casinos. So what’s the update on the status of Virginia gaming?
Virginia is currently one of only nine states where casino gambling remains illegal, but that could change within two years’ time.
On March 22, Governor Ralph Northam signed Senate Bill 1126 into law, paving the way not only for the Commonwealth’s first brick and mortar casinos, but sports betting and online gambling as well.
SB-1126 was introduced by state senator L. Louise Lucas (D-18) in December, and by February 23, the state Senate and House of Delegates voted overwhelmingly to pass the measure on the same day. Northam put pen to paper nearly one month later, but unlike other gubernatorial signatures, this one won’t lead directly to any casino groundbreaking ceremonies or iGaming regulations.
Virginia Gaming Bill
Calls for Joint Study, Second Passage, Local Referendums
Rather than set out the terms of the Virginia gaming expansion in explicit terms, SB-1126 establishes a framework for legislators and regulators to move forward.
The first step of the process tasks the Joint Legislative Audit and Review Commission (JLARC) with studying successful gambling industry models established in other states. Nevada and New Jersey are obvious candidates in that regard, but neighboring states like West Virginia, Maryland, North Carolina, and Pennsylvania all operate several commercial and/or tribal casinos.
The JLARC findings must be submitted to the Virginia Lottery Board by December 1 of this year.
From there, the Board will spend the first six months of 2020 drafting a regulatory framework for implementing gambling expansion.
The General Assembly will then examine the Board’s regulatory recommendations, before voting once more to reenact SB-1126.
If the bill secures passage and a Governor’s signature for a second time, the Board can begin issuing licenses to prospective casino operators on July 1 of 2020.
Nonetheless, that licensing window will likely be extended into 2021, as SB-1126 also calls for local referendum to be held, with voters weighing in on whether or not their city should become the site of a brick and mortar casino. Those referendum must be held by January 1 of 2021.
Virginia Gaming: Five Cities Targeted for Land-Based Casinos
Rather than open the entire state up for potential casino development, SB-1126 seeks to “assist economic development” and “promote tourism” in certain cities.
The bill’s language requires casinos to be built in cities where at least 40 percent of the land is exempt from local real property taxation (24 percent if a federally recognized Indian tribe operates gaming). The cities must also have an unemployment rate of at least 5 percent, a poverty rate of at least 20 percent, and population decreases of at least 4 percent from 1990 through 2016.
Finally, the cities must have a population of more than 200,000 residents.
Using those strict limitations, only five cities stand a chance of hosting a casino – Bristol, Danville, and Portsmouth for commercial casinos, along with Richmond and Norfolk for tribally-run venues.
Two businessmen based in Bristol – Jim McGlothlin and Clyde Stacy – have already pledged to invest $150 million of their own money to construct a $250 million casino project to replace the city’s vacant mall. A spokesperson for the planned Bristol Resort and Casino issued a statement praising Northam for pushing the project closer to becoming a reality:
“We are looking to stay engaged and working to see this through the process and we are still committed to doing the project in Bristol.
We’ve got a ways to go but there is a commitment by lots of parties to go through this process that will hopefully allow us to move forward.”