Virginia Casino study finds Petersburg suitable for game development
Posted: October 19, 2022, 10:02 a.m.
Last update: October 19, 2022, 10:31 a.m.
A study of Virginia casinos conducted by the Joint State Audit and Legislative Review Commission (JLARC) concluded that Petersburg is well suited to become a gambling host city.
In 2020, Virginia authorized the development of a single casino in the cities of Richmond, Norfolk, Portsmouth, Bristol and Danville. Every commercial game development required local voter support through a municipal referendum. Voters in every locality except Richmond approved of the casinos.
An effort has since been undertaken by Richmond City Council to re-survey residents about a casino. Local leaders, including Mayor Levar Stoney (D), hope a more coordinated message about the economic benefits of allowing a casino in the capital will lead to a different outcome. Richmond’s 2021 casino referendum was narrowly defeated by 51-49%.
As Richmond officials plan a second gambling referendum, State Sen. Joe Morrissey (D-Petersburg) is leading a legislative effort to reallocate the casino opportunity from Richmond to Petersburg, just south of the capital.
The JLARC study released this week found that Petersburg would attract enough gamblers if the city was allowed to open a casino. JLARC estimates that a Petersburg casino would generate $204 million in gross gaming revenue in its first full year of operation. This would result in nearly $25 million in tax revenue, about half of which would remain in Petersburg, as well as the creation of about 1,300 permanent jobs.
Morrissey represents Petersburg and parts of Richmond, but he is not in favor of asking the people of Richmond for a casino again.
Richmond had his chance,” Morrissey said this week. “They held a referendum and the people spoke.”
JLARC has taken no formal position on whether allowing Petersburg to consider a casino is in the best interests of the state and region. Instead, the review board investigated the financial performance of various theoretical casino scenarios.
If both Richmond and Petersburg open casinos, JLARC reports that the Richmond casino should generate approximately $250 million in annual gross gaming revenue (GGR). But the tight competition would drive the Petersburg casino’s annual GGR down to around $140 million a year. If Richmond opens a casino but not Petersburg, the capital’s casino is expected to earn gamblers over $300 million a year.
JLARC was assisted by the Innovation Group, a gaming research and advisory firm, to predict the GGR for prospective casinos.
Legislative confrontation 2023
Morrissey plans to reintroduce legislation to designate Petersburg as an eligible casino city when the state General Assembly meets in January 2023. Local leaders in Richmond are also expected to reinvigorate their quest for a second casino referendum.
It’s pretty obvious that this is going to be a major issue in the next session,” said Sen. Janet Howell (D-Fairfax), who chairs both the JLARC and the Senate Finance and Appropriations Committee. “It will probably be a fight.”
Morrissey says two casinos are not feasible, although JLARC said both would be profitable.
“We want a resort in St. Petersburg. If there are two casinos 25 miles apart, they would cannibalize each other,” Morrissey concluded.
The closest development casinos to the Richmond-Petersburg area are the Portsmouth-Norfolk properties being built about 60 miles to the southeast. Morrissey criticized the allocation of Portsmouth and Norfolk construction casinos, as the two towns are neighbors in Hampton Roads.
The Pamunkey Indian Tribe and gambling billionaire Jon Yarbrough are teaming up on a $500 million casino in Norfolk called HeadWaters Resort & Casino. Rivers Gaming has been approved to build a $300 million casino in Portsmouth called Rivers Casino Portsmouth.