Saying Virginia Should Be ‘Open Minded’ on Casinos, Virginia Governor Signals Support for Plan To Reopen Colonial Downs

The following appeared in the March 13th Richmond Times Dispatch and was written by Graham Moomaw.

As he reviews legislation aimed at reopening the Colonial Downs track with a new way to bet on horse racing, Gov. Ralph Northam says he has no major misgivings with the proposal and thinks Virginia should be “open-minded” to the possibility of casino-style gambling.

“If this is an opening to more casino gambling in Virginia, that’s something we’re going to have to discuss with legislators and communities, et cetera,” Northam told reporters earlier this month. “But the way I see this moving forward is to reopen that track. And I think that’s a good thing for Virginia.”

Legislation to allow historical horse race wagering — a system that uses slots-style machines to let players gamble faster by betting on races that have already happened — passed the usually gambling-averse General Assembly last month.

The new betting machines are a critical component of a potential sale of the shuttered Colonial Downs track in New Kent County. The prospective buyer, Chicago-based Revolutionary Racing, has said the machines would generate an estimated $161.9 million per year, revenue that would support the state’s horse racing industry and help fill government tax coffers.

Northam, who has until April 9 to act on the bill, said he’ll review the proposal and may suggest changes, but he sees nothing so far that would be a deal-breaker. Echoing a popular argument among casino proponents, Northam said Virginia’s aversion to casinos means the state is exporting its gambling dollars to its neighbors.

“There’s a tremendous amount of money in Virginia that’s going across state lines, whether it be in West Virginia or Maryland or Delaware. And I think we’ve got to be open-minded,” Northam said. “Certainly we don’t want to do something that’s regressive to people or is hurtful to people. But if there are individuals who want to do that and are going to other states, I think we should be open-minded in Virginia.”

Anti-gambling groups oppose the bill, arguing that windfall will come out of Virginians’ bank accounts, hurting families who could see a gambling addiction drain their savings.

“We’re incredibly disappointed that the General Assembly would pass a massive gambling expansion that is the equivalent of slots under the guise of saving the horse-racing industry,” said Victoria Cobb, president of the conservative Family Foundation of Virginia. “This definitely raises the concern that we have now opened the door to casinos.”

The bill passed the House of Delegates 79-21 and cleared the Senate 31-9.

If Northam signs the bill, the Virginia Racing Commission will have 180 days to adopt more detailed regulations for the new terminals.

Mark Hubbard, a McGuireWoods communications consultant representing Revolutionary Racing, said the company is “optimistic” the Northam administration will back the proposal.

“We look forward to working with the Virginia Racing Commission as guidelines are established in the coming months and sharing with the public our plans to re-open Colonial Downs hopefully before the end of the year,” Hubbard said.

The proposal calls for 1.25 percent of the revenue from the machines to be set aside for tax purposes, with 0.75 percent going to the state and 0.5 percent going to New Kent. For off-track facilities, the local percentage would be split between New Kent and the county or city where the satellite facility is located.

Colonial Downs, located off Interstate 64 about halfway between Richmond and Williamsburg, shut down indefinitely in 2014 after its current owner — Jeff Jacobs of Colorado-based Jacobs Entertainment — surrendered the track’s license to the racing commission over a dispute with the state’s traditional horsemen’s group.

Since the shutdown, various horse racing groups have joined forces to create the Virginia Equine Alliance, an umbrella organization that identified historical horse race wagering as “critical to securing the long-term success of the horse-racing industry” in a strategy report late last year.

Several other states have allowed historical racing terminals — powered by a video archive of past horse races that hides identifying details about the race and the horses running in it but lets users see the odds — to support their horse racing industries.

But some critics and courts have concluded the machines are little more than dressed-up slot machines with only a tenuous link to pari-mutuel horse race wagering.

The racing commission estimated that each machine could produce $150 per day.

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