Localities, state rake in casino revenues, but they can’t be sole economic strategy • Virginia Mercury
Joyce Jackson was eager to get inside the sprawling Rivers Casino Portsmouth on a recent weekday. Nor was she reticent to express her opinion about the full-scale gaming center that opened early last year. It’s one of five casinos that’s already operating or being planned across the commonwealth.
“I love it!” said Jackson, 76, who lives in nearby Norfolk and visits the casino in Portsmouth at least twice a month. A large digital billboard on the building promoted the upcoming appearance of comedian Tracy Morgan, an alumnus of “Saturday Night Live” and “30 Rock.”
“I just won a jackpot,” Jackson told me, explaining how she took home $2,600 during an earlier visit. “I like the one-armed bandit.”
Her son Brian Smith, 51, was her designated chauffeur, and he dutifully stood by as I interviewed them in the parking lot. (Smith told me a few days later he plunked down $140 and won $500 from slot machines during that trip.)
Listening to Jackson, you could almost see the flashing lights, hear the canned jingling of coins and smell the restaurant fare. I did just that when I entered the casino – and promptly lost $10 on various slot machines, including video blackjack.
Still, I enjoyed myself and will go back. It’s an entertaining diversion.
That’s what state legislators, casino advocates and many Virginians banked on when the commonwealth finally decided to take a chance on the industry. Well, that and a desire to tap a source of revenue that had bypassed the state for decades.
The move to casino gambling in Virginia was long overdue. Localities, though, shouldn’t depend on gaming as their sole or chief revenue-generating strategy. People who study casinos say there’s only so much cash to go around, and the “new shiny toy” eventually loses its luster – especially given the myriad ways people can gamble nowadays.
“The explosion of online sports books is competing with physical casinos,” Bob McNab, a professor and chair of the Department of Economics at Old Dominion University, told me. “Let’s not forget the state lottery or games of skill.”
He also said there’s a two-hour “catchment” driving area that most gambling halls draw from if they’re not considered a “destination casino,” like in Las Vegas or Monaco.
“Most of the traffic is local,” McNab added. The host locality will reap more tax dollars, “but at the state level, you’re really moving money from movies, restaurants and bars to casinos,” he said.
So there’s little net gain unless you can attract non-Virginians.
Back in 2015, when I wrote about the topic frequently for The Virginian-Pilot, 40 states had commercial or tribal casinos. Paternalistic attitudes among some legislators and congresspeople, plus concerns about protecting state lottery dollars, prevented passage of casino gaming. Virginians had to travel to Delaware, Maryland or elsewhere to get their fill – or fix, depending on your perspective.
Virginia, thus, was one of the last states to welcome casinos when the General Assembly approved them in 2020 for five cities: Bristol, Danville, Norfolk, Portsmouth and Richmond. Residents, though, first had to approve the casinos in a referendum. (Petersburg just joined the list after Richmond voters said no last year.)
Some 42 states now have “land-based” gaming, a spokesperson with the American Gaming Association, an industry trade group, told me. That’s a lot of competition, yet many states – much like Virginia – eagerly welcome them. Eligible localities, including Portsmouth, have embraced the opportunity:
- The permanent $500 million Hard Rock Hotel & Casino Bristol, at the former Bristol Mall, opened last week. A temporary casino had opened in July 2022, the first one to operate in the state. The staff will eventually total 1,400, according to news accounts.
- Caesars Virginia in Danville recently announced it will open doors to its permanent casino next month. Caesars and the Eastern Band of Cherokee Indians opened a temporary casino in May 2023. The site is just 60 miles from Durham, so its catchment area actually includes residents in North Carolina. The $750 million casino resort will host the first Virginia restaurant of noted chef-scold Gordon Ramsay.
- The oft-delayed casino in downtown Norfolk held a ceremonial groundbreaking on Oct. 30. The $750 million project includes a 200-room hotel, food and beverage outlets and a casino with 1,500 slots and 50 table games scheduled to open in 2027. A temporary facility should open in late 2025, a casino spokesman told me. The Virginian-Pilot reported the project has shrunk since it was first announced by the Pamunkey tribe, which is a partner with Boyd Gaming. Norfolk voters approved the project in 2020. The development partner has changed since plans were originally released in 2018.
- Petersburg voters this month overwhelmingly supported a proposed $1.4 billion casino project. More than 80% backed it. Petersburg weighed in after voters in nearby Richmond twice rejected casino proposals.
All this casino action comes with a huge caveat: It’s likely to cause more gambling addiction. Carolyn Hawley, an addiction expert and professor at Virginia Commonwealth University, told me states and localities should factor in the potential loss to individuals of productivity in their jobs, health problems, stress and family discord.
However, because there’s no federal funding for gambling studies, Hawley said, not much research is being done. “We just don’t know what the ramifications are going to be,” said Hawley, who’s also president of the Virginia Council on Problem Gambling.
What we do know is that even if Virginia didn’t host casinos, residents here would gamble in nearby states – think of the huge MGM National Harbor casino just across the Potomac River in Prince George’s County, Maryland. Or, Virginians would ante up while on their smartphones.
So the state should collect gaming dollars if it’s going to have to also fight gaming-related problems.
Meanwhile, a September 2023 Virginia Mercury story noted gaming was outperforming previous state projections, even though several casino sites were in temporary buildings.
The temporary Bristol casino gained $157 million in net gambling revenue in its first year of operation.
The temporary Caesars casino in Danville had $31 million in gambling revenue in May and June 2023.
A news article said the Portsmouth casino generated nearly $250 million in gaming revenue in its first full year. It provided the city of Portsmouth with more than $15 million in tax revenue.
These welcome statistics might not continue for individual cities and counties after all five casinos in Virginia are operating, attendance tapers off and if gambling-related addictions rise dramatically. Localities can’t afford to view gaming as a panacea for their budgets.
“A healthy dose of skepticism is warranted to rationally discuss how casinos can help (and hinder) economic development,” ODU’s 2021 State of the Commonwealth report noted about the then-fledgling industry.
“Experience in the gambling industry shows that, after the novelty has worn off, casino revenue tends to plateau, if not outright decline,” the report added.
Let’s enjoy ourselves at the roulette wheel, poker table and slot machines. Let’s gamble wisely, within budget.
And let’s tell our local officials and state legislators that gaming is just one of many tools to raise money – and to keep searching for others.
YOU MAKE OUR WORK POSSIBLE.
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