Richmond casino fight all about South Side turf
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The legal fight over casino gaming is happening in a courtroom in downtown Richmond, but the real battlefront lies on the other side of the James River in South Richmond.
A charitable gaming operator based next to Midlothian Turnpike is challenging the legality of Richmond's decision to award a contract to a partnership to build a half-billion-dollar casino resort a few miles away on current tobacco company property next to Interstate 95 and Commerce Road. The charity, Richmond Lodge No. 1 of the Good Lions Inc., contends that the city failed to conduct a competitive bidding process after voters rejected the first casino proposal in 2021.
The casino partners include Urban One, a Black-owned communications company with radio stations in Richmond; and Churchill Downs, owner of the famed home of the Kentucky Derby in Louisville and one of the largest casino operators in the country. Churchill Downs also is the new owner of Rosie's Gaming Emporiums, which operates historic horse racing terminals that look like slot machines in a gaming parlor on Midlothian Turnpike.
"No one would be in this fight if it weren't for the revenue that is generated through casino gaming," said 5th District City Council member Stephanie Lynch, a South Side resident who considers local gaming revenues "a sin tax," just the same as public revenues from sales of alcoholic beverages, cigarettes and, eventually, cannabis.
The dispute is engulfed in state and city politics. The General Assembly last year used the state budget to block Richmond from holding a second vote until it could study the feasibility of a rival casino proposed in Petersburg by The Cordish Group, which the Petersburg City Council selected last fall as a casino operator after a private search and closed-door meeting.
The study by the Joint Legislative Audit and Review Commission concluded that both Petersburg and Richmond could support casinos, but Cordish says it will not move forward if Richmond is allowed to develop a rival gaming operation less than 25 miles away.
The assembly rejected legislation this year to let Petersburg host a casino and block Richmond from voting again. However, assembly leaders are divided over whether to prevent a Richmond referendum this year with similar language in a revised state budget that remains in limbo after a six-month political standoff.
Good Lions charity
The way the Good Lions charity sees it, South Richmond is its turf.
"Presently, the only casino gaming permitted in Richmond is charitable gaming and this sole right has helped Good Lions and similar nonprofit organizations use the proceeds from gaming to improve the community," said the organization, represented by Sen. Chap Petersen, D-Fairfax City, in a motion filed in Richmond Circuit Court to block a second public referendum on allowing the proposed ONE Casino + Resort to operate in South Richmond.
The organization is a non-stock corporation that is not affiliated with the Lions Club International or its local chapters. It operates at the same address as Pop's Bingo World and other charitable entities established by Chuck Lessin, a Richmond businessman and former chairman of the Virginia Charitable Gaming Board. Lessin resigned from the board earlier this year after a bitter fight over his role in drafting regulations for Texas Hold 'Em poker games.
Lessin is not listed as an officer of Good Lions in state corporate records, but he does represent Pop's Bingo World, also based at 210 Giant Drive in South Richmond, where the charity holds bingo games twice a week. He also founded Camp Binyan Torah, the previous name of Good Lions, according to State Corporation Commission records.
The organization, along with two other charities that Lessin founded, gave $500,000 last year to the Rudlin Torah Academy in Richmond from profits raised through charitable bingo and poker games.
Spokesman Liam Gray said Lessin is "very friendly with the Good Lions" and rents the organization space through his charity. Gray said Lessin also referred the organization to Petersen, who represented him in disputes with the state over his former role in charitable gaming regulation.
On Thursday afternoon, about 20 backers of the Richmond casino vote demonstrated outside Pop's Bingo World. Some of the demonstrators were members of Unite Here, which represents casino workers at MGM National Harbor. Demonstrators held signs reading "Good jobs for Richmond Workers" and "Let us Vote."
“This project is going to create and provide economic growth to the South Side of Richmond,” said Sam Epps, political director for Unite Here Local 25.
“Besides this project, what other project is on tap for the South Side of Richmond?”
Lessin criticized the protest and told the Richmond Times-Dispatch that "casinos crush charities."
In a statement, he said: "I am proud to host multiple organizations who are committed to raising money for their causes and communities. All we want is accountability, transparency, and comfort in knowing that the City of Richmond is acting in good faith for our residents and our community.”
Alexis Prutzman, lieutenant governor of Richmond's Lodge No. 1 of The Good Lions, said in the statement: “Our focus is on serving our stakeholders and communities. Through charitable gaming, the charities we work with have been able to donate millions of dollars to worthy causes and give back to the communities that we serve. We filed this lawsuit because Virginians deserve transparency from the government when decisions like this are being made, and from what we have learned, the City of Richmond has not been transparent about this process.”
The Good Lions won the initial legal skirmish with the city on Tuesday, when Richmond Circuit Court Chief Judge W. Reilly Marchant temporarily suspended his previous ruling on July 25 to place the casino referendum on the ballot in November. Marchant promised to rule on the organization's standing to intervene in the case by next Wednesday, after reading legal briefs that both sides must submit by Friday afternoon.
If the judge allows the Good Lions to intervene, the organization is asking him to reconsider his previous ruling. It contends Richmond Mayor Levar Stoney and the City Council violated the state constitution by not conducting a competitive bidding process before awarding the casino contract to RVA Entertainment Holdings, a limited liability company owned equally by Urban One and Churchill Downs.
Two years ago, Richmond received six proposals for developing a casino in response to a competitive bidding request. The city chose RVA Entertainment Holdings, then an alliance between Urban One, based in the Washington, D.C., area, and Peninsula Pacific Entertainment, a California company that then owned the Colonial Downs horse track in New Kent County and Rosie's Gaming Emporiums in South Richmond and four other Virginia localities.
Churchill Downs purchased Peninsula Pacific last year, giving the Kentucky-based company control of the Virginia historical horse racing parlors and the live track in New Kent, as well as a stake in the proposed casino in Richmond, one of five cities allowed by a 2020 state law to host casino gaming, subject to public approval.
Different ownership
Urban One President Alfred Liggins III acknowledges that the ownership of the casino company is different than it was in 2021. Then, Urban One held all of the common equity for what it pitched as the only Black-owned casino in the country, while Peninsula Pacific would operate the casino and provide a small amount of secondary financial backing.
Now, Liggins said, Urban One and Churchill Downs own equal shares of common equity, not including money from local investors.
"It's a different deal than I had with the former partner," he said in an interview on Wednesday.
Liggins said the arrangement changed because "I wanted the new owner, Churchill, to be as invested as we were."
With the combined financing provided by the two partners, he said, "We can guarantee that the project, should it be approved by the voters, will get built."
Opponents contend the new arrangement requires the city to go through a new competitive bidding process before awarding the contract and taking the project to referendum.
"They just made a unilateral decision to grant the contract without going through a public bidding process," said Chris Robertson, an associate in Petersen's law firm who argued the case in Richmond court on Tuesday.
Good Lions alleges that the city violated the state constitution by awarding a "no-bid contract" for a valuable public franchise, but Liggins said the constitutional requirement does not apply because the project does not involve any publicly owned land or financing. The company has an option to buy property on Walmsley Boulevard near Commerce Road now owned by Altria Corp., the Henrico County-based owner of Philip Morris USA.
"There are no city or state subsidies," he said.
Paul Goldman, a political operative with a long history in state and city politics, contends that the city casino deal is a "no-bid contract" that violates the constitution, which he said considers a publicly awarded franchise to be public property.
"We think it falls under the constitutional definition of public property," Goldman said Tuesday.
For Lynch, as a City Council member, the project represents jobs, development in an economically stressed part of South Side and money for essential public services.
"It does bring revenue," she said.
