Gambling Bill in Va. Closer to Passage

Colonial Downs estimates the games would generate more than $600 million a year, half of which it pledges to return to the state for transportation projects. Gov. Timothy M. Kaine (D) said he doubts the games would generate that much revenue but said he is willing to study the issue.

"It's enough similar to the horse racing that's already allowed," Kaine said.

Under the bill approved by the Senate, about 4 percent of the proceeds would go to horsemen, who said it would help them increase purses at Colonial Downs and help them be more competitive with states that allow slot machines at racetracks. Colonial Downs, which has struggled to turn a profit since opening in 1997, would get 43 percent of the proceeds. Local governments and Virginia's tourism agency would split the rest.

The prospect of what lawmakers describe as "free money" is proving to be a powerful incentive as the General Assembly seeks to raise more than $1 billion a year for transportation without significantly increasing taxes or diverting money from other programs.

"It is the most viable alternative to providing some funding for transportation," said Sen. Thomas K. Norment Jr. (R-James City).

Two weeks ago, when the measure first went before the House, it was rejected 54 to 42. But Republican lawmakers said the bill probably would have passed had there not been a last-minute lobbying effort by House Speaker William J. Howell (R-Stafford).

Howell, a gambling opponent, did not want the issue to distract from his effort to pass a broader transportation package that would rely on a combination of taxes and fees and $250 million from the general fund.

But with Senate Republicans and Democrats balking at taking money from the general fund, many lawmakers say the instant racing games might hold the key to breaking the stalemate.

"I think it is a big pool of money that is left untapped," said Del. John S. "Jack" Reid (R-Henrico), chairman of the House General Laws Committee, which is overseeing the legislation. "The state has already made a decision on gambling and off-track betting and the lottery, and it's not like we are opening a casino with slot machines."

According to federal regulations, a slot machine is a "mechanical device . . . which when operated may deliver, as a result of the application of an element of chance, any money or property."

Because people who bet on instant racing machines can first review the odds for each horse, Colonial Downs officials said they are a game of skill, not chance. During Tuesday's Senate debate, Norment said he thinks Colonial Downs could install the games even if the General Assembly does not act.

The state's Racing Act allows for parimutuel betting "originating within the Commonwealth or any other jurisdiction."

"I see it as an opportunity to take something that is already legal in Virginia . . . and make sure the commonwealth will receive its fair share of the proceeds," Norment said, adding that the General Assembly should approve the legislation even if it fails to do anything else on transportation.

Whyte said Virginia lawmakers are becoming "addicted" to gambling revenue. As technology improves, Whyte said, it is easier for lawmakers around the country to approve new forms of gambling.

"You can make a machine and put any label you want on it," Whyte said. "But it is still going to look and feel and play like any electronic gaming device."