Virginia Legalized Gambling: Outlook for 2020

Photo credit: Gambling Herald

By Don Rippert

It’s not called the OLD Dominion for nothing. Virginia has lagged the nation in allowing legalized casino gambling. This is especially noteworthy since the United States doesn’t have a very tolerant attitude toward legalized gambling compared to other countries. In other words, Virginia has been a laggard within a lagging nation. That is changing. As of 1997 only two US states allowed legal casino gambling. Today 43 US states have operating casinos.  Virginia is not among those 43 states. Is anybody surprised? However, legislation passed in 2019 will change that. It seems very likely that Virginia will be joining the modern world of legalized gambling in 2020 (and beyond). The biggest barrier to Virginia casinos opening in 2020 is the bureaucracy of our state government. More on that in a moment. First, let’s review a brief history of legalized gambling in the Old Dominion.

Once upon a time. Legalized gambling has gone through ups and downs throughout Virginia history. In colonial days horse racing was a staple of Virginia society. In 1752 William Byrd III, member of the Virginia House of Burgesses, claimed that he had the fastest horse in the colonies. The legality of horse race betting was established through General Assembly legislation in 1727, 1740 and 1851. The 1851 legislation bypassed conflicting anti-gambling legislation by declaring horse racing to be a sport rather than a game. Bets were capped at $20 (which is about $650 in today’s terms). By the late 1800s Virginia’s legislature began to question the wisdom of legal horse betting. The General Assembly banned gambling at horse tracks in 1894. Of course the ban was not absolute. Betting was allowed at “sites owned by agricultural associations or fairs, and driving clubs or parks”. The presumption was that this exemption would allow the upper crust to continue gambling while shielding the lower classes from the consequences of their innate moral decrepitude.

The biggest issue with old time race betting was the fact that the tracks were not just facilitators of betting but bettors. Much of their profits came from making winning bets on horse races. In order to maximize profits tracks fixed races. Governments interceded to prohibit betting on what was considered rigged races. In 1871 in New York the concept of pari-mutual betting on horse races began. Under this approach patrons bet other patrons with the track taking a specified percentage of all bets to fund its operations and profits. Many states that had outlawed horse race betting changed course with the advent of pari-mutual betting. Virginia was not one of those states until 1988. The impetus for this change came less from the horses’ derrières in Richmond and more from an actual horse – Virginia-bred Secretariat. The greatest race horse that ever lived won the Triple Crown in 1973 setting time records for all three races. Stunningly, all three of those records still stand to this day. In many ways Virginia rode a very fast horse into the modern world of legalized gambling. It would extend beyond horse betting. The first Virginia lottery ticket was sold on Sept 20, 1988.

Back to the future. Legalized gambling in Virginia entered a 30-year period of stability from the sale of the first lottery ticket in 1988 through 2019. New legal gambling possibilities were discussed but little was done. Chap Petersen, D-Fairfax, proposed legislation to declare poker a game of skill which would have allowed legal betting. The bill failed. A brand spanking new horse racing track at Colonial Downs was opened with live racing (and betting) in 1997. Live racing ended in 2014 but restarted this year. Pretty much business as usual until 2019. That will be remembered as the year the dam broke. In 2019 the General Assembly legalized casino gambling in Virginia subject to regulation by the Lottery Board (SB 1126).

Strings attached. It would be great if a private casino operator could just apply to the Lottery Board for a license to open a casino in Virginia. But that’s not the case. Much has still to be decided and there is a lot of red tape. This is where things get hazy. Even the executives of casino companies hoping to establish operations in Virginia call the situation “confused.” For one thing the 2019 legislation requires re-enactment in 2020. That re-enactment will be at least partially based on a study of other states that was completed last week. The Lottery Board regulations will not be published until early next year. Finally, any locality that wants to open a casino must first obtain the consent of its citizens through a referendum. Ready, fire, aim.

Martin Kent, CEO of The United Company, is trying to bring a casino to Bristol, Va. He said, “Even in Virginia, there’s a lot of confusion about what happened last year. I think it’s best probably summed up this way: Any major issue that Virginia, its legislature, is looking to pass will oftentimes go through a re-enactment provision.”

In other words – we won’t know what’s in the bill until after we pass it. Where have I heard that before?

Rip Wrap. This is a classic case of the incompetence of our state government.

First, delaying the inevitable. This weekend, hundreds (or perhaps thousands) of Virginians will stream into the MGM Grand Casino in Oxen Hill, MD. Northern Virginians will drive, Richmonders will arrive by regularly scheduled charter bus service, other Virginians will come in other ways. The casino opened in December, 2016. That’s three years of lost tax revenue (and counting). Now Virginia has passed casino gambling legislation. Who knows how long it will take to open a casino in Northern Virginia to compete with MGM National Harbor. Five more years? Maybe more? Why the delay? Why must our state legislature always be a day late and a dollar short when reacting to inevitable change? I can only guess it’s because our legislature, as an organization, is inept.

Second, after much delay … a convoluted process. The casino legislation of 2019 allows casinos in Bristol, Danville, Portsmouth, Richmond and Norfolk. Why pick the cities until the study results are available? It turns out that the study concluded that five possible casinos – including one in Bristol and one in Northern Virginia could all be financially viable. What? Wait. Northern Virginia? Who could have guessed that the most populous and prosperous area of the state with residents already casino gambling in Maryland might be a good place to consider building a casino? Apparently not our General Assembly.     

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14 responses to “Virginia Legalized Gambling: Outlook for 2020

  1. This goes back to the idea that people know better what to do with their money than the government so Casinos are better than higher taxes!

    • Not really. It’s more that people are increasingly sick of the government and society’s self proclaimed elite trying to tell people what to do. From the left it’s a woman’s choice. From the right it’s a right of armed self-protection. From the libertarian side it’s legalized marijuana and gambling.

      Time for government to get off the peoples’ backs.

      More locally, the Virginia prohibition against gambling has been defeated by criminals for a century and by Maryland and West Virginia in more recent years.

      It’s almost in the DNA of Virginia’s plantation elite to cling to a discredited bad idea for as long as humanly possible. Slavery, voter disenfranchisement, segregation, poll taxes, anti gay rights, no legal casinos, criminalized marijuana, no medical marijuana.

      The new Democratic majority comes with a lot of baggage, especially their love for big government, big regulation and high taxes (whether transparent or opaque). Let’s at least hope they will accelerate the adoption of inevitable social evolution.

  2. Are you advocating that the Govt stay out of the Casino issues and just let them operate wherever there is “demand” like new car lots or 7-11s or Walmarts and the govt just gets their standard “take”?

    Casinos could offer their own lottery tickets and a wide variety of weed and pot?

    And heck, the govt apparently allows one to claim their gambling losses, right?

    • I don’t know why the government should pick the cities where casinos are allowed to operate. As long as the investment in the casino is private what concern is it of the state government? Beyond that, there are many areas of legitimate regulation of casinos where the state should be involved. Ensuring the fairness of the games is a legitimate form of consumer protection in my mind.

      Casinos don’t offer their own version of lottery tickets because it’s a God awful way to gamble. Buy a ticket and wait a couple of weeks to see what happens? How very 1970. Casinos do offer keno which is essentially real time lottery. The state of Maryland also offers keno as an adjunct to the lottery in a wide variety of establishments. Virginia? Unsurprisingly … no. But that’s OK. Northern Virginians who want to play keno just …. wait for it …. drive over the bridge into Maryland!

      It would be fine with me for casinos to sell marijuana. US casinos have a well deserved, excellent reputation for keeping underaged gamblers off the floor. For one thing, the kiddies usually have very little money to lose. I would however prefer that casinos sell marijuana by the toke. Like they sell liquor by the drink. If you want a case of vodka – go to the liquor store. If you want a big bag of dope – go to the dispensary.

  3. So the United Company is going from exploiting coal miners to exploiting poor people who are hoping against hope of hitting the jackpot!

    By the way, Don, that is a nice summary of legalized gambling in Virginia. I dislike the idea of casinos, but I guess that it is better to have some oversight of gambling than none at all.

    • Thank you Dick.

      United Airlines, United Fruit, United We Stand … who knows?

      Casinos are neither here nor there to me. I gamble when I go to trade shows in Vegas but I’m almost always staying in a casino. I drive past MGM National Harbor and feel no great desire to go in.

      My main point is that the mores of society change. Sometimes the change is pretty fast – like the acceptance of LGBTQ+ people and lifestyles. Other changes are slower moving and more obvious to see – like legalized casino gambling. The General Assembly forestalling the acceptance of an inevitable change, in my opinion, helps nobody. Whatever taxes and employment the change brings are just deferred when our state legislature stands like an ostrich with its head in the ground. Casinos and at least medical marijuana – let’s go. Time to confront reality and move forward.

  4. Just to point out on prospective Casino “lottery”… remember the “numbers rackets”?

    For that matter, how about on toll roads – there will be a “winner” every day! Some lucky toll-payer will hit it big!

    The interesting thing – a dichotomy of sorts is that Conservative types tend to argue for more freedom and less regulation , “markets”, etc and yet they tend to be the bigger opponents of Casinos and gambling.

    Liberals who are accused of too much regulation and restrictions on the free market – tend to favor casinos and like.

  5. I get the libertarian argument about gambling — and share it to some degree. It’s a form of entertainment, and people should be free to pick their entertainment. Some people enjoy watching Broadway shows. Some people enjoy music concerts. Some people enjoy wiling their time away at slot machines and craps tables. To each his own. I have a number of friends who enjoy gambling. They set a limit on how much money they’re willing to lose, say $200 (they’re not very big betters) and then they play until they lose it (or, occasionally walk away as winners). It doesn’t appeal to me — I’m too cheap to gamble, which I regard as a way of throwing away money — but if other people like it, that’s their business.

    But that’s not all there is to the story. A minority of gamblers are addicts — literally, addicts. I knew one fellow who had a successful small business — great guy — whose gambling addiction (sports betting) caused him to squander every penny he had and break up his marriage. There are so many gambling addicts that there is a national organization, Gamblers Anonymous, to support them. Yeah, yeah, I know the comeback argument: People have many different ways to ruin their lives, and gambling is just one of them. We don’t outlaw or license every one of those activities. So why pick on gambling?

    Playing devil’s advocate here for the sake of exploring the issue… Don argues that gambling is a taxable activity, and Virginia is losing tax revenue to Maryland and other neighboring states. That’s also one of his arguments for legalizing marijuana. Well, to be logically consistent, why not legalize heroin? If we could be the first state in the country to legalize heroin and meth, think of all the economic activity we could create and tax revenues we could generate as people from all over the country flocked to Virginia to load up on their drug supply? Hey, it’s a free country, right? If someone wants to be a heroin addict, why not let him, as long as he’s not hurting anyone else? If we just legalized heroin, people would have no cause to break the law amd hurt anyone!

    From a libertarian perspective, Don, where do we draw the line for socially destructive addictive substances and activities? Or do we draw a line? Do we just say, “Anything goes?”

    • Nice rebuttal, Jim. I wish that I had thought it through like that.

    • I think you have to draw the line at some level of harm and potential harm to the addict.

      Losing all your money gambling is stupid but it won’t kill you or anybody else. As my late father used to say, “A fool and his money soon go separate ways.” You can lose all your money speculating in the stock market. You can lose all your money speculating on real estate. You can lose all your money trying to start a business that fails. You can lose all your money buy too many exotic things. Ask Johnny Depp. None of those activities are illegal.

      Gambling is already legal in Virginia … lottery and para mutual wagering on horse racing. The question of gambling is out of the bag. The remaining reasonable questions are casino gambling and sports betting. If gambling is contrary to the benefit of society why are the lottery and horse betting legal?

      As for legalizing drugs I’d make the same argument (and this argument is made by lawmakers all the time). What is the potential harm to the consumer and others and how does that possible harm compare to similar areas that are legal? Before getting to drugs, let’s talk about guns. Your argument would hold that making single shot shotguns legal will eventually lead to the legalization of bazookas for personal use. Of course that doesn’t happen. Society can regulate items based on their potential danger. Nobody has ever overdosed on marijuana. But they sure have on heroin and … alcohol. Marijuana may be habit forming bus (as we saw in Supersize Me) so are McDonald’s cheeseburgers. My guess is that if you had to pick one of those two for long term abuse you’d be better off smoking pot.

      In summary …

      1) Gambling is already legal in Virginia. The state itself runs the biggest numbers game. The question is casino gambling and sports betting. Virginians have access to both in other states. There is also widespread illegal sports betting going on in Virginia.

      2) Marijuana is properly classed with alcohol, tobacco and vaping. It should be legal and regulated tightly by the state. There is no reasonable comparison between marijuana and heroin from a safety perspective.

      3) Society makes legal distinctions on various form of the same class of object all the time. As previously noted – firearms are an example. The regulatory borderline between over the counter and prescription drugs is another.

      Your slippery slope argument fails to impress me.

  6. Well from a Libertarian point of view – who should decide what is “good” for people or not? How does the govt doing that role fit into a real Libertarian mindset?

    This is why I call it Libertarian Lite. What should Libertarians care about “socially destructive behavior” and who defines what is “socially destructive”?

    Perhaps the middle ground is the Govt providing “advice” like they do on packs of cigarettes.

  7. Never have liked the idea of gambling.

    • I don’t like gambling either but have come to understand that some folks consider it great entertainment… we blow $100 on Kings Dominion or some other distraction and they like to blow their money on gambling.

      I’m forever surprised when I go into a 7-11 and have to wait while others just throw their money away on lottery tickets…

      but the thing is – is it government’s job to decide what is “okay” entertainment or not? People engage in all kinds of things – some of it inherently riskly to life and limb – like whitewater kayaking or car racing or who knows what but do we REALLY want the govt “outlawing” it or even “regulating” it so that, for instance, you can’t kayak whitewater unless you get a “license” that proves you know how?

  8. First I think gambling is just plain stupid, (I don’t frequent the inside of the local 7-11, but it amazes me to see folk I know are not well off picking up 10 or more lottery tickets).. also stupid is smoking pot, smoking, drugs in general…
    Now we are going to have government choose who gets to have a casino…
    Reminds me of that other ridiculous and costly state function,, the Certificate of Public Need for medical hospitals, nursing homes, etc..
    And while I’m on a rant, why the he’ll is the state in the liquor sales business…

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