CASINO WARS
Competition heats up to open first gambling den in state.
A casino war has begun. Portsmouth leaders came out swinging this week with their own plans to open a waterfront casino, rivaling plans by the Pamunkey Indians to build one in downtown Norfolk.
Such proximity wouldn’t be good for either casino’s success.
The battle lines have now been drawn in bills filed in the General Assembly. On one side, legislation to change state gambling laws to pave the way for a commercial casino in Portsmouth and other cities that meet certain poverty and unemployment criteria that Norfolk does not.
On the other side, the Pamunkey have fired back with a bill that aims to block Portsmouth by restricting all future casino business to tribes like themselves and to locations within cities that have at least 200,000 residents.
Portsmouth’s population: 95,000. Facing off: state Sen. Louise Lucas, D-Portsmouth, and Del. Barry Knight, R-Virginia Beach.
“What I’m saying is that Norfolk and Portsmouth can’t coexist, and the Pamunkey have a right to build their casino in Norfolk,” said Knight, who is sponsoring the Pamunkeys’ bill.
Until now, the Pamunkey Indians — armed with a special federal status — were the only people in Virginia with any shot at opening a casino. In December, Norfolk announced a partnership with the tribe and its plans to build a $700 million casino, resort and spa next to Harbor Park on the Elizabeth River.
On Tuesday, Portsmouth leaders held a press conference on their own waterfront parcel, outlining plans for their own $700 million casino, hotel and conference center — less than two miles across the river from the Norfolk site. Lucas has long tried to get commercial gambling approved for Portsmouth. This year, the city has aligned with Danville and Bristol to convince legislators to allow economically challenged cities like themselves to hold referendums, letting residents decide for themselves if they want casino gambling.
“Let this be our Amazon,” Lucas said during a Monday news conference in Richmond.
Of bringing commercial casinos to Virginia, Lucas said: “It is rare to see a cause that can unite people across party lines and reasonable boundaries, especially in such a politically divided environment.”
Knight wants Portsmouth removed from Lucas’ legislation so only Danville and Bristol remain. He said Portsmouth would wind up benefiting from his proposal because the whole region would share in the profits, though his bill doesn’t say specifically how.
One way or another, Knight said, casinos are coming to the commonwealth.
“We are going to have casino gambling in Virginia,” he said.
Q&A: Virginia’s casino wars
Q. What’s the likelihood of casinos coming to both Portsmouth and Norfolk?
A: At this point, that’s anyone’s guess. The general consensus is that two casinos that close together in Hampton Roads would cannibalize each other’s customers.
And each still has plenty of hoops to jump through. On the Pamunkey side, the tribe has to get the Norfolk land into a federal trust and approved for gaming, a typically laborious process. As for Portsmouth,
Lucas’ bill appears to have bipartisan support from across the state, which means it may have a shot at getting through the legislature. But it could also hit a snag when it reaches Gov. Ralph Northam’s desk.
Despite saying in March that Virginia should be “open-minded” to casino-style gambling, Northam recently proposed a gambling study which could put the brakes on the issue for this year. If funding for the study is approved, the results would be due in November.
Q. Which is more lucrative for a community — tribal or commercial casinos?
A: It depends on a few things. First: The type of tribal gambling allowed, class 2 or 3.
Class 2 — mostly a type of slot machine — typically has less draw and rarely requires revenue be shared with localities or the state. Class 3, like a full-fledged Vegasstyle casino, would require state approval and likely revenue sharing. At Connecticut’s class 3 casinos, for example, 25 percent of tribal gambling revenue goes back to the state, said David Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas. So far in Virginia, the bills proposed on both sides call for a 10-percent tax. Schwartz said that’s on the low-to-middle end of what other states have levied.
Q. How quickly could either be opened?
A: Neither effort will allow a casino to pop up overnight. If the Portsmouth-friendly bill passes the General Assembly and is signed by the governor, it wouldn’t take effect until July 1, with referendums likely held in November. Then Portsmouth could break ground, but it would still probably take a year or two for doors to open. The tribal route traditionally takes longer — as much as a decade through the Bureau of Indian Affairs. But Knight thinks it could happen in Norfolk in three years, which he called “warp speed.”
Q. Why is there so much gambling talk in Virginia right now?
A: It used to be that Las Vegas and Atlantic City were the only options for gamblers in the U.S. But since the 1980s — when a process for tribal gaming was approved, and more recently, in the last decade, as “gambling” has become “gaming” and the practice has become less taboo — both tribal and commercial casinos have spread across the country.
Virginia is one of only 10 states that still don’t have any type of casino. Even neighboring North Carolina and Maryland have some, including MGM National Harbor, a flashy resort built by a Vegas casino owner, that opened just across the state line in December 2016.
“I think (Virginia sees) what has happened in Maryland where you’ve had expansion in gaming there,” said Schwartz with the University of Nevada, Las Vegas. That same year, Virginia was one of the first states to craft a law regulating fantasy sports contests. More recently, the Supreme Court overturned a federal ban on sports betting, causing many state legislatures to begin drafting laws to regulate it in their own states, including Virginia.