Study shows Richmond and Petersburg can each support a casino

Jeremy M. Lazarus | 10/20/2022, 6 p.m.
Richmond and Petersburg could both support casinos.

Richmond and Petersburg could both support casinos.

That’s the surprising finding of a new study released Monday.

That finding potentially gives the General Assembly a way to avoid taking sides in the upcoming session between the two cities that are now openly competing for the right to have a gambling mecca both see as creating a gusher of jobs and tax revenue.

The Innovation Group, a casino consultant, prepared the study and projected the state would maximize its revenue from gaming taxes by giving both cities the opportunity to develop.

If new casinos opened in both places by 2027, the study prepared for a legislative commission estimated the state should see total revenue from gaming taxes exceed $190 million by 2028, or $5 million to $20 million more than if just Petersburg or just Richmond opened a casino.

The projection the Innovation Group developed is based on estimates of the total gaming tax revenue to be derived in 2028 from already approved casinos in Bristol, Danville, Portsmouth and Norfolk, plus the two new ones, as well as from Rosie’s operation of slot machines based on historic horse racing.

Both Richmond and Petersburg also would gain significant new tax revenue from their share of state gaming taxes if both had casinos, the study indicated.

The Innovation Group estimated that in the first year of operation, Petersburg would gain around $8 million in new revenue and Richmond would gain nearly $14 million in new gaming tax revenue.

That does not include the take each community could gain from local taxes on real estate, personal property, admissions, lodging, business licensing and other taxes and fees, nor any tax revenue a locality might receive directly from a casino’s profit from gambling.

That new revenue, though, is projected to be less than if just Richmond or just Petersburg had a casino, according to the study — a key reason that advocates in both cities are still hoping to eliminate the competition.

“We’re pleased that the facts presented in the study reaffirm Richmond as the best choice for a Central Virginia casino,” Mayor Levar M. Stoney stated after the study was released by the General Assembly’s Joint Legislative Audit and Review Commission.

According to the study, a Richmond casino would be a bigger draw than one in Petersburg or in the four other cities.

State Sen. Joseph D. “Joe Morrissey, who currently represents Richmond and Petersburg and is now advocating for Petersburg to replace Richmond, opposes the two casino-scenario.

He said acceptance would reduce the size and scope of the casino-resorts that could be developed in either city. “They would cannibalize each other,” he said.

Richmond is still listed as one of the five cities that the legislature approved for casinos. But its grip on that spot weakened dramatically after city voters in 2021 narrowly rejected the $560 million casino development the city’s proposed operator, Black media owner Urban One, had planned.

After the election results came in, Petersburg immediately jumped in to start a campaign to win legislative support to take Richmond’s spot.

The Cockade City did so, as the Free Press has reported based on source information, after a representative from the Cockade City consulted Mayor Stoney a day after the casino’s defeat and found he was uninterested in a second referendum and had no objections and was even encouraging about Petersburg seeking to become the Central Virginia location.

Petersburg has been rushing to get ready. Tuesday the Petersburg City Council voted to name the real estate developer and casino owner Cordish Companies of Maryland as its preferred choice to develop and operate a casino. Cordish had competed for the Richmond site, but lost out to Urban One.

Based on the study, the legislature could punt a decision and allow each city to hold a referendum in November 2023 when all state Senate and House of Delegate seats will be on the ballots, as well.

If Richmond voters turn around and approve the casino on a second vote and if Petersburg voters also endorse their city’s casino plan, then the legislature could make its final decision on whether one or both cities could move forward.