The effort has drawn criticism for not requiring competition for lucrative licenses, defying the recommendation of a state commission that studied the issue. Instead, the legislation largely rewards a small group of investors and interests who already had relationships with many of the cities involved.
The web of compromises, if it lasts, was born out of economic desperation. It emerged as a byproduct of the state’s effort to revive horse racing, and took root amid the distractions of unrelated scandals that engulfed the executive branch last year. Now deep-pocketed gambling outfits are descending on Richmond to help push the legislation through.
“This is one of the biggest undertakings that we will consider this year,” Del. Jeffrey M. Bourne (D-Richmond) said recently — no small claim as the General Assembly chases history in areas from gun control to passage of the Equal Rights Amendment.
Virginia is one of only 10 states that have no casinos. Even as its electorate has become more diverse and socially liberal, lawmakers have clung to a suspicion of gaming that transcends partisanship. They cracked the door for a state lottery, with proceeds going to schools, and for horse racing, which has a history in Virginia dating to Colonial times.
State Sen. L. Louise Lucas (D-Portsmouth) has been fighting the suspicion for 25 years, convinced that a casino would inject new life into her struggling city.
“This bill passing would be like our Amazon,” Lucas recently told a Senate committee, referring to the massive headquarters operation the online retailer is bringing to Northern Virginia.
Last year, she finally connected with people as desperate as she was. Together they had the political clout to move the issue forward, plus one more attribute that didn’t hurt: a partner with deep pockets for campaign contributions.
'The exact same needs'
The cities of Portsmouth and Bristol are nearly 400 miles apart and seem to share little beyond a Virginia address. Portsmouth is a majority-black, urban seaport; Bristol is white and in the rural foothills of the Appalachians. One gave the world Ruth Brown and Missy Elliott, the other the Carter Family and the birth of country music.
“But the similarities . . . are remarkable,” said state Sen. Todd E. Pillion (R-Washington), whose district includes Bristol. “We have depressed economies. Our schools are antiquated. . . . We have the exact same needs.”
Bristol suffered as the coal industry collapsed in Southwest Virginia. Stumbling from one failed economic development gambit to another, the isolated city — five hours from Richmond — is mired in debt.
Portsmouth is dominated by Norfolk across the Elizabeth River on one side and the sprawling suburban city of Chesapeake on the other. Much of its prime waterfront real estate is government property — a Navy complex and Virginia port facilities, which don’t contribute to the local tax base.
Lucas has long preached that a casino would bring jobs and visitors to break the economic straitjacket. Two years ago, leaders in Bristol reached the same conclusion.
Randall Eads, a lawyer with no background in municipal administration, took over as Bristol city manager with promises to turn the city’s vacant shopping mall into a facility for growing medical marijuana. And he talked with the mall’s new owners — wealthy coal barons — about opening a casino.
Though Bristol bristles with conservative churches, local residents were willing to support the plan if it meant jobs.
Last year, the area’s Republican lawmakers connected with Lucas. Their timing was perfect. The General Assembly had opened what amounted to a back door for casino gaming.
An alliance for slots
Eager to revive the horse racing industry, lawmakers had approved a deal to secure a new owner for the shuttered Colonial Downs track in New Kent County. The buyer argued that the venture would be economically viable only if it included off-track betting facilities around the state stocked with “historical horse racing” machines.
Those devices are not technically games of chance. They’re based on the outcomes of actual races from years past, anonymized so the player can wager using blind statistics. That comforted a broad coalition of Republicans and Democrats who supported the plan as a way to boost agriculture and bring jobs to low-income areas.
In truth, though, most players skip the stats on those machines and just let colorful symbols spin — exactly like a slot machine. The result is a network of Rosie’s Gaming Emporiums — in New Kent, Richmond, Hampton and near Roanoke — that look, sound and operate like slots-only casinos.
That was close enough for Lucas. She trumpeted her alliance with the Southwest lawmakers as a broad new political base for actual casinos. And others wanted in.
The southern city of Danville, desperate for economic development since textile and furniture industries fled, also asked to roll the casino dice. The Pamunkey Indians, who were planning to seek a casino under federal law, worried they would be left out in Virginia’s sudden push. So the tribe laid claim to possible sites in Norfolk and Richmond.
That made five localities — Bristol, Portsmouth, Norfolk, Richmond and Danville — jockeying for position.
And the state Capitol was distracted. Gov. Ralph Northam (D) was under fire for a racist photo from his 1984 medical school yearbook depicting someone in blackface and another person in Klan robes. Attorney General Mark Herring (D) had admitted his own youthful blackface incident. And Lt. Gov. Justin Fairfax (D) was denying claims that he had sexually assaulted two women in separate incidents in the early 2000s.
Faced with the complicated issue of gambling amid a media circus, the legislature took a cautious route: It commissioned a study.
The delay raised a checkered flag for casino interests to start spending. In the 2018-2019 election cycle, when every seat in the legislature was on the ballot, casino advocates donated more than $1.7 million to politicians of both parties, according to the nonpartisan Virginia Public Access Project. That’s up from $56,000 four years before.
Most of the increase came from companies or executives affiliated with Jim McGlothlin and Clyde Stacy, coal barons backing the Bristol casino effort, according to VPAP data.
McGlothlin is no stranger to Richmond — he and his wife, Frances, are major benefactors of the Virginia Museum of Fine Arts. He was briefly caught up in the money-for-access scandal involving then-Gov. Robert McDonnell (R) after questions were raised about a $36,000 payment from McGlothlin’s company to McDonnell’s wife.
Gambling-related companies also rushed to sign up lobbyists, boosting their total to 53 this year from 23 the year before, according to a VPAP analysis.
The study requested from the Joint Legislative Audit and Review Commission projected that five casinos could generate $260 million yearly in state taxes “and have a positive, but modest impact on local economies.” The state lottery and charitable gaming would lose some revenue, while horse racing would take a huge hit.
If the state really wanted to rake in cash, the commission said, it would put a casino in Northern Virginia and capture business flowing across the Potomac to the MGM Grand casino at Maryland’s National Harbor.
The report urged a competitive bidding process for awarding gaming licenses to maximize value and “minimize risks to the state, localities, and the public.”
But that’s not what’s happening.
The bills advancing this year would let the five cities pick their development partners and then hold a local referendum on whether to allow the project. Only Danville is planning an open competition. Portsmouth, Norfolk and Bristol all have partners in place. Richmond, under the proposed legislation, would choose between two favorites.
No other localities are eligible.
That aggravated a nasty spat in Bristol, where another developer has proposed a casino outside city limits. Steve Johnson, who built a successful retail center just across the line in Tennessee, is working with the Eastern Band of Cherokee Indians on a possible casino in Virginia’s Washington County — but neither the House bill nor the Senate bill would allow that project.
Johnson has accused Bristol officials of stealing his idea, and complains that the legislation ignores sound principles advocated by the commission report.
“We are not asking the General Assembly to pick our project,” Johnson said via text message. “The General Assembly shouldn’t be in the business of picking projects, we just want there to be a competitive process that gives everyone a fair shot.”
Others have rushed to get into the game before it’s too late. Alfred Liggins of Maryland’s Urban One radio, which has a stake in the MGM Grand, traveled to Richmond to protest that none of the proposed casino projects feature African American ownership, even though many would be in predominantly black neighborhoods.
Lawmakers added language to the bills calling for any Richmond casino to give extra weight to a project with minority ownership. But the bills also tell the city to give priority to the casino proposed by the Pamunkey tribe and to any proposal from Colonial Downs, which has protested that its off-track betting parlors could soon be outmoded by casinos.
The racetrack got language inserted in the House bill allowing it to bring up to 2,500 more historical horse racing machines to the state, including 1,800 at a proposed parlor in Dumfries, in Prince William County. The Senate has prohibited such an expansion, though, setting up a behind-the-scenes fight.
The bills are also wildly different on taxation, with the Senate opting for rates of up to 40 percent depending on the size of the casino. Supporters of the Pamunkey proposal say such a high rate would squeeze out the tribe and favor only the biggest international gaming interests.
Sorting all that out could take the rest of the legislative session, which ends March 7. Some lawmakers are still opposed to the entire effort, from conservatives who frown on gambling to liberals who worry about preying on low-income consumers. Members of both parties question the lack of competition.
Northam is “carefully reviewing” the proposed legislation, a spokeswoman said, and “does not have a position on any bill at this point.”
But Lucas is confident that her long crusade is about to pay off.
“It’s taken 20 years, 30 pounds and gray hair to get here,” she said. “What I want to do right now is not do anything to put this bill in jeopardy.”
As she hustled through the Capitol one recent afternoon, Lucas spotted Eads, the Bristol city manager, in town to press his case. She swerved over to give her unlikely partner a big hug.
“Thank you so much,” Lucas said.
“It wouldn’t have happened without you,” Eads responded.