New Colonial Downs' casinos in Virginia generate over USD 70 M last month

Virginia’s two recently opened casinos, operated by Colonial Downs, received USD 70.8 million in wagers last month. May was the New Kent location’s first full month in business. A second location opened in Vinton, a small town outside Roanoke, on May 9.

A third is scheduled to open in Richmond this month and a fourth later this year in Hampton. Plans to expand into Northern Virginia and Southside Virginia are also in the works, but will be subject to a local referendum, according to Virginia Mercury.

Branded as Rosie’s Gaming Emporium, the casinos are filled with hundreds of historical horse racing machines, which the General Assembly approved in 2018 to provide a revenue stream to revive the state’s horse racing industry, which all nearly collapsed when Colonial Downs, the state’s only live race track, closed in 2014. The games look and function like slot machines but rely on pari-mutuel wagering pools to set jackpots and draw on the results of randomly selected old horse races to pick winners.

Patrons bet $58.2 million at the track in New Kent, which features 600 video gambling terminals, and $12.6 million at the 150-terminal Vinton location, according to a revenue report submitted to the state’s racing commission.

Together, the spending generated $531,000 in state tax revenue, the majority of which will be directed to the state’s general fund, and $354,000 in local tax revenue, amounting to a total of $885,000. Colonial Downs’ cut came out to $3.9 million, according to the report.

“This tremendous response is helping us deliver on our promise to bring significant jobs and tax revenues to Virginia and its localities,” said Colonial Downs Group Chief Operating Officer Aaron Gomes in a statement. “And we are literally just out of the gate and getting started with great expectations to come.”

State lottery officials say the new casinos don’t appear to have had a negative impact on their sales last month, which totaled $103.2 million in scratch tickets and $87 million in sales of lottery tickets and other games. “Here’s the bottom line: Virginia Lottery sales increased in May, beating both the previous month and May of last year,” said lottery spokesman John Hagerty.

Like Colonial Downs, the lottery is also branching out into new gambling territory, launching a mobile app that allows people to buy instant scratch tickets on their phones at traditional retailers as well as at a growing number of bars and restaurants. The app launched statewide on May 6 and has so far seen $200,000 in sales.

Meanwhile, both Colonial Downs and the lottery face competition from gray-market games that have sprung up in convenience stores, bars and truck stops around the state over the past two years. Manufacturers of those terminals insist they’re not slot machines, despite their appearance, arguing they incorporate elements of skill that side-step the state’s gambling statutes.

So far, they have not faced a legal challenge in Virginia, but this month the commonwealth’s attorney in Charlottesville warned business owners to get rid of them within 30 days or face prosecution. The biggest operator, Queen of Virginia, maintains they’re legal, noting that they survived similar legal challenges in Pennsylvania. In other states, including Georgia, they’re regulated and taxed.

Amid the newly flourishing patchwork of gambling opportunities, state auditors have embarked on a study of what a fuller legalization of gambling might look like. The review was prompted by a Southwestern Virginia coal baron’s unsuccessful push to open up the state to full-scale casinos in Bristol, Danville, Portsmouth. The entities would not be tied to the race track and would feature table games like blackjack. Lawmakers promised to revisit the subject when they meet next year.