Virgin Islands greenlights reconstruction deal with two casino firms for St. Thomas racetrack

The U.S. Virgin Islands 34th Legislature narrowly voted in favor of legislation ratifying a settlement agreement between the government and two casino management companies —Southland Gaming of the Virgin Islands Inc., and VIGL Operations LLC—, which each have invested interest in the reconstruction of the Clinton E. Phipps Racetrack facility on St. Thomas. 

Back in 2016, former Gov. Kenneth Mapp allowed VIGL Operations to operate video lottery terminals within St. Croix’s Randall James racetrack, and install another 200 at the St. Thomas Clinton Phipps racetrack. This led to a six-year long dispute between the casino companies which, through this new legislation, would finally cease.

Mapp’s request to allow VIGL Operations the aforementioned abilities was in exchange of VIGL’s commitment to remodel both tracks and run the races within. But Southland Gaming objected to the arrangement as the entity was granted by the government exclusive rights to operate video lottery gaming in the U.S. Virgin Islands through a Video Lottery Agreement made in July 2003. 

The dispute between the companies grew into a litigation, which was recently settled out of court and spurred Governor Albert Bryan Jr. to craft the bill to ratify an agreement between the government and Southland Gaming, ultimately with the intention to bring horse racing back to the territory.

The Senate was divided, with detractors noting concerns involving ratification of which legal counsel confirmed, as written and without an amendment, the bill would subsequently uphold the 2003 Video Lottery Agreement granting exclusivity to Southland Gaming. 

As reported by Virgin Islands Daily News, Senator Kurt Vialet stated that the provisions of that exclusivity could “block casino gaming in this district until 2041. That is the reality, in this bill we are ratifying a contract from 2003”.

Senator Kurt Vialet.

His concern surrounding the 2003 agreement was so prominent it prompted Vialet to motion for a technical amendment to strike the date July 29, 2003 from the bill. 

Senator Janelle Sarauw supported Vialet and added: “We have used horse racing as a bargaining chip for more video lottery terminals, for another exclusive contract… We are ratifying, 19 years later, a practice that was not lawful. We are bringing an existing practice into conformity”. 

However, the amendment was objected by Senator Carla Joseph, who pointed out it changes the “major intent of this legislation”. Vialet retorted by saying the 2003 agreement expired in 2008, “so it is not relevant for ratification or for this agreement to move forward, but it protects the Legislature by allowing the Legislature not to come on the record and say that we are ratifying an agreement from 2003 that includes exclusivity”.

The amendment was passed though Joseph warned it would “hamper this whole entire process” as it is tied to the whole agreement. Senator Milton Potter also expressed concerns and questions, but ultimately he stated he feared that, should the measure not pass, it could be years before the residents of the Virgin Islands see another race. 

The 34th Legislature favorably acted on the bill in an 8-7 vote. 

 Senator Kenneth Gittens.

In an official press release issued directly after the hearing, detractor Senator Kenneth Gittens expressed that the bill was “being pushed as the only way to resume horse racing on St. Thomas - which was simply not true. Anything that will tie this government’s hands for two decades and involves tens of millions of dollars must be much more thoroughly vetted”.

“This is not an emergency situation — we can take a couple of weeks and make sure this is done properly. The government holds the cards. We can’t be so eager to give away our rights and our revenues for years to come”, he concluded. 

Gittens also expressed he had a “major concern” about the way video lottery terminals are regulated, and the agreement approved by the Legislature at Thursday’s session “will make it difficult for the Casino Control Commission to regulate”. 

“The Court has ruled officially that video lottery terminals and slot machines are exactly the same thing. Yet on St. Croix we have the Casino Control Commission overseeing these machines, an inspector regularly examining these machines and present every time money is removed,” Gittens said.

But on St. Thomas this is not the case. “It is a different story on St. Thomas and St. John where the video lottery terminals are much more loosely monitored under the jurisdiction of the V.I. Lottery Office. We must not have different rules for our districts when it comes to regulating gambling,” he explained.