Study shows Petersburg and Richmond could sustain casino’s together
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RICHMOND, Va. (WWBT) - Petersburg is primed for gaming, according to a study by the Joint Audit Review and Commission, which studied what could happen if the city decides to build a casino.
JLARC staff presented the results of the study to State Lawmakers Monday.
According to the JALRC study, if Petersburg opens a casino by 2027 within its first year of operation, it would generate $204 million in gaming revenue, over $12.2 million in taxes for the city and about $12.3 million in state taxes.
“Petersburg has always been determined to have a destination-type casino,” said Senator Joe Morrisey.
For more than a year now, Morrisey has been advocating for a destination Casino to come to Petersburg ever since Richmonders voted against a referendum allowing the river city to become the fifth casino host city in the state.
Norfolk, Portsmouth, Danville and Bristol are each poised to open their own gaming houses within the next two years.
If Petersburg’s casino were made possible, it’s projected to be the third-highest-performing casino in the state behind Danville and Norfolk, respectively.
The Petersburg Casino amenities would include:
Business services company Innovation Group found that the return on investment analysis shows Petersburg casino would remain profitable five years after opening and have positive cash flow after 10 years, in addition to increasing total net gaming revenue from casinos statewide by 18%.
“We would have over 1293 permanent jobs,” Morrisey said.
But the increased gaming revenue and combined competition of an additional Petersburg facility would come at a cost. The study will decrease revenue from other host cities’ respective casinos by as much as $1 million in local tax revenue if Petersburg gets the go-ahead for a gaming house.
Gaming revenue in Danville and Portsmouth would decrease by as much as $18 million. Norfolk would see a similar drop of about $17 million. Bristol would be the least affected by a Petersburg Casino, with a projected impact of only $2 million.
Ultimately while the findings indicate that a Petersburg Casino would be a positive for state tax revenue, the study also shows that if Richmond also brought in a casino, the combined effort from the two cities would generate over $130 million in state tax revenue.
The results show that Richmond would outperform the other state casinos, generating nearly $250 million. The total six casinos in the state would generate over $1.1 billion in gaming revenue instead of just $977 million with five casinos.
The total state tax revenue would be $130 million, with Richmond and Petersburg accounting for over a third of that total at nearly $50 million.
But similarly to a Petersburg Casino, adding Richmond Casino would further impact the four other host cities. The study shows it would also decrease revenue from gaming by $1.7 million in Norfolk and Danville and $1.8 in Portsmouth. A Petersburg casino would also reduce historical Horse Racing gaming revenue by $46 million, and adding Richmond would decrease revenue by $105 million.
According to study findings, a Richmond Casino would also have the largest impact on what Petersburg would be able to sustain.
The return on investment analysis shows positive cash flow for both projects after 10 years, but Petersburg would be smaller if Richmond casino is also developed.
A Petersburg Casino could only hold 1,300 slot machines, 55 table games, fewer or smaller restaurants and a 250-room hotel. It would still have a sportsbook and 1,500-seat events center.
Petersburg would also see a drop in gaming revenue of about $60 million.
“I don’t think that’s a good idea,” Morrisey said. “They would cannibalize each other you would not get destination casinos.”
Morrisey believes central Virginia isn’t big enough for two destination casinos, so he is laying all cards on the table for Petersburg.
“The whole idea behind the legislation initially is to have challenged cities get these casinos. Richmond isn’t challenged, and finally, they had their chance at a referendum,” Morrisey said.
But city advocate Charles Willis says he wants the people of Richmond to roll the dice on a casino one more time.
“There are many residents of Richmond that first voted no because of misunderstanding who first voted no because of misunderstanding has come back tremendously and said they would support a referendum,” Willis said.
In a statement, Richmond Mayor Levar Stoney says he’s also pleased that the study shows Richmond is still a viable location for a premiere casino.
“We’re pleased that the facts presented in the JLARC study reaffirm Richmond as the best choice for a Central Virginia casino. We look forward to further discussions on this important economic development opportunity, which would provide well-paying jobs and much-needed revenue to address priorities,” Stoney said.
“Petersburg feeds on Richmond revenue right now. They still have opportunities to come for jobs in Richmond,” Willis said. “South Richmond and Richmond alone is in need of the jobs, in need of the development in need of the opportunities.”
