By Don Rippert
It’s not called the OLD Dominion for nothing. Virginia has lagged the nation in allowing legalized casino gambling. This is especially noteworthy since the United States doesn’t have a very tolerant attitude toward legalized gambling compared to other countries. In other words, Virginia has been a laggard within a lagging nation. That is changing. As of 1997 only two US states allowed legal casino gambling. Today 43 US states have operating casinos. Virginia is not among those 43 states. Is anybody surprised? However, legislation passed in 2019 will change that. It seems very likely that Virginia will be joining the modern world of legalized gambling in 2020 (and beyond). The biggest barrier to Virginia casinos opening in 2020 is the bureaucracy of our state government. More on that in a moment. First, let’s review a brief history of legalized gambling in the Old Dominion.
Once upon a time. Legalized gambling has gone through ups and downs throughout Virginia history. In colonial days horse racing was a staple of Virginia society. In 1752 William Byrd III, member of the Virginia House of Burgesses, claimed that he had the fastest horse in the colonies. The legality of horse race betting was established through General Assembly legislation in 1727, 1740 and 1851. The 1851 legislation bypassed conflicting anti-gambling legislation by declaring horse racing to be a sport rather than a game. Bets were capped at $20 (which is about $650 in today’s terms). By the late 1800s Virginia’s legislature began to question the wisdom of legal horse betting. The General Assembly banned gambling at horse tracks in 1894. Of course the ban was not absolute. Betting was allowed at “sites owned by agricultural associations or fairs, and driving clubs or parks”. The presumption was that this exemption would allow the upper crust to continue gambling while shielding the lower classes from the consequences of their innate moral decrepitude.
The biggest issue with old time race betting was the fact that the tracks were not just facilitators of betting but bettors. Much of their profits came from making winning bets on horse races. In order to maximize profits tracks fixed races. Governments interceded to prohibit betting on what was considered rigged races. In 1871 in New York the concept of pari-mutual betting on horse races began. Under this approach patrons bet other patrons with the track taking a specified percentage of all bets to fund its operations and profits. Many states that had outlawed horse race betting changed course with the advent of pari-mutual betting. Virginia was not one of those states until 1988. The impetus for this change came less from the horses’ derrières in Richmond and more from an actual horse – Virginia-bred Secretariat. The greatest race horse that ever lived won the Triple Crown in 1973 setting time records for all three races. Stunningly, all three of those records still stand to this day. In many ways Virginia rode a very fast horse into the modern world of legalized gambling. It would extend beyond horse betting. The first Virginia lottery ticket was sold on Sept 20, 1988.
Back to the future. Legalized gambling in Virginia entered a 30-year period of stability from the sale of the first lottery ticket in 1988 through 2019. New legal gambling possibilities were discussed but little was done. Chap Petersen, D-Fairfax, proposed legislation to declare poker a game of skill which would have allowed legal betting. The bill failed. A brand spanking new horse racing track at Colonial Downs was opened with live racing (and betting) in 1997. Live racing ended in 2014 but restarted this year. Pretty much business as usual until 2019. That will be remembered as the year the dam broke. In 2019 the General Assembly legalized casino gambling in Virginia subject to regulation by the Lottery Board (SB 1126).
Strings attached. It would be great if a private casino operator could just apply to the Lottery Board for a license to open a casino in Virginia. But that’s not the case. Much has still to be decided and there is a lot of red tape. This is where things get hazy. Even the executives of casino companies hoping to establish operations in Virginia call the situation “confused.” For one thing the 2019 legislation requires re-enactment in 2020. That re-enactment will be at least partially based on a study of other states that was completed last week. The Lottery Board regulations will not be published until early next year. Finally, any locality that wants to open a casino must first obtain the consent of its citizens through a referendum. Ready, fire, aim.
Martin Kent, CEO of The United Company, is trying to bring a casino to Bristol, Va. He said, “Even in Virginia, there’s a lot of confusion about what happened last year. I think it’s best probably summed up this way: Any major issue that Virginia, its legislature, is looking to pass will oftentimes go through a re-enactment provision.”
In other words – we won’t know what’s in the bill until after we pass it. Where have I heard that before?
Rip Wrap. This is a classic case of the incompetence of our state government.
First, delaying the inevitable. This weekend, hundreds (or perhaps thousands) of Virginians will stream into the MGM Grand Casino in Oxen Hill, MD. Northern Virginians will drive, Richmonders will arrive by regularly scheduled charter bus service, other Virginians will come in other ways. The casino opened in December, 2016. That’s three years of lost tax revenue (and counting). Now Virginia has passed casino gambling legislation. Who knows how long it will take to open a casino in Northern Virginia to compete with MGM National Harbor. Five more years? Maybe more? Why the delay? Why must our state legislature always be a day late and a dollar short when reacting to inevitable change? I can only guess it’s because our legislature, as an organization, is inept.
Second, after much delay … a convoluted process. The casino legislation of 2019 allows casinos in Bristol, Danville, Portsmouth, Richmond and Norfolk. Why pick the cities until the study results are available? It turns out that the study concluded that five possible casinos – including one in Bristol and one in Northern Virginia could all be financially viable. What? Wait. Northern Virginia? Who could have guessed that the most populous and prosperous area of the state with residents already casino gambling in Maryland might be a good place to consider building a casino? Apparently not our General Assembly.
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