Virginia: Legislative study shows both Petersburg and Richmond could host casinos

A long-awaited legislative study concluded Monday shows Petersburg could support the operation of a casino, regardless of whether the city of Richmond were to host one as well. The report comes as the Petersburg City Council moved to unanimously pick a developer for the city’s casino project — which has yet to be approved.

The Joint Legislative Audit and Review Commission found that, if both cities opened casinos in 2028, the amount of tax revenues and new jobs would be lower in Petersburg than if Richmond did not open a casino in close competition. It also found that a Richmond casino would generate more gaming revenue and jobs than one in Petersburg, reports Richmond Times-Dispatch.

However, two new casinos would boost state gaming revenues to $1.1 billion in 2028, including money from four other casino operations that voters in Bristol, Norfolk, Portsmouth and Danville already approved, the study further concluded. However, those casinos would generate less revenue if Petersburg opens a gaming resort, and even less if Richmond – where voters rejected a proposal last year – approves a casino through a second referendum.

JLARC staff deferred to lawmakers about the best course for the General Assembly to take when it convenes in January. Sen. Janet Howell, D-Fairfax, chair of both JLARC and the Senate Finance and Appropriation Committee, said that the casino issue is likely to be a major one in the upcoming session.

The study comes as both cities make efforts towards hosting a casino. Sen. Joe Morrissey, D-Richmond, has already filed legislation to make Petersburg the fifth casino location in Virginia and eliminate a potential rival site in Richmond. “We are not interested in two regional casinos,” Morrissey said in a phone interview, as reported by Times-Dispatch. “If there are two casinos 25 miles from each other, they would cannibalize each other.”

The study found that a Petersburg casino could generate $204 million in gaming revenues by 2028, more than the temporary casino that has already opened in Bristol, and slightly larger than the Portsmouth operation to launch next year. However, it would generate about $140 million should Richmond were to open a casino as well.

Other report findings show that the size of the Petersburg resort and casino operation would be smaller if Richmond were to open a rival resort, but that the amount of additional state tax revenue from both casinos would be almost double at nearly $49 million. However, a Richmond casino would also lower new local gaming tax revenues in Petersburg by almost $4 million and reduce the number of new jobs by about 300, the study estimates. 

Richmond's proposed Urban ONE casino

“They need the jobs in Petersburg,” Morrissey said in regard to this scenario. “It’s just another side dish for Richmond; for Petersburg, it’s the main entree.” However, Richmond has its reasons to push for a casino: the study found the gambling venue would generate about $300 million and 2,000 jobs for the city, almost $100 million more in revenue and 700 more jobs than one in Petersburg by itself.

Virginia’s General Assembly voted in 2020 to legalize casino gambling in five cities, including Richmond. Voters in Norfolk, Portsmouth, Danville and Bristol approved casino operations that year, while Richmond voters narrowly rejected a $650 million casino resort proposed by Urban One and Peninsula Pacific Entertainment. 

While Richmond petitioned the court to hold a second referendum on the project this year, it was withdrawn after Morrissey convinced General Assembly budget negotiators to block a second vote until JLARC studied the viability of a Petersburg casino. And while much remains to be seen, Petersburg is seemingly confident on its odds.

The Petersburg City Council has now unanimously chosen a developer for the city’s potential casino project, reports WRIC. The move follows the Petersburg mayor's remarks in June that he wanted to have a developer picked before a possible referendum in 2023. The decision took place Tuesday, one day after the JLARC report showed casinos in Richmond and Petersburg could coexist.

The city council has unanimously voted for The Cordish Companies as the city’s development partner. The firm’s chief operating officer said the casino would be “a world-class entertainment destination and mixed-use project” with gaming that would generate millions of dollars in tax revenues, as reported by the cited source.

In a separate study released Monday, JLARC also recommended that the state consolidate state regulation of all gaming activities at the Virginia Lottery, which already oversees casino and sportsbook gaming.