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Long opposed to casinos, Virginia may be ready to gamble

Pamunkey Chief Robert Gray on the reservation in King William County, Va., on April 26, 2018. Behind him are the tribe’s museum, left, and its old schoolhouse on the right. The Pamunkey is working on plans for a $700 million casino in nearby New Kent County. (Gregory S. Schneider/The Washington Post)

NEW KENT COUNTY, Va. — A hub for gambling is taking shape in a historic area of Virginia between Richmond and Williamsburg, signaling sharp change in a state that long resisted the lure of gaming revenue.

Two weeks ago, a Chicago company announced plans to buy and reopen the dormant Colonial Downs horse-racing track, Virginia’s only facility for major thoroughbred events. The deal — worth some $20 million — was made possible when the General Assembly this year legalized a type of video horse-racing game that some have likened to slot machines.

Just a few days earlier, the Pamunkey Indian tribe disclosed an interest in land a short hop up the highway from Colonial Downs as the possible site of a $700 million casino and resort. While that project could take years to come about, the tribe has the right to seek the casino under federal recognition that it won in 2016 and has partnered with a billionaire investor.

A famed Va. Indian tribe seeks federal recognition amid casino fears

Virginia is one of only 10 states that have so far resisted any form of casino gambling, unlike neighbors Maryland, West Virginia and North Carolina. Its conservative legislature turned away riverboat gambling in the 1990s, outlawed Internet gambling cafes in the 2000s and has kept a casino bill bottled up in a Senate committee for the past five years.

But momentum for gambling is getting a strong push from the popularity of the MGM Grand casino just across the Potomac River in Maryland, which estimates that at least 40 percent of its business comes from Virginia. In March alone, Maryland’s six casinos generated more than $44 million for that state’s education trust fund.

Virginia Gov. Ralph Northam (D) has taken note and said it may be time for something similar in the Old Dominion.

“I think there is the potential for it. Obviously, we’re going to take it one step at the time,” Northam said. “If that’s something Virginians want to participate in, why not look at doing it here in Virginia, rather than those resources going to other states?”

Such a step would be hard for some to stomach. Virginia House Speaker M. Kirkland Cox (R-Colonial Heights) voted against the horse racing bill, and is even more opposed to the idea of a major casino.

“I have a long record of opposing the expansion of gaming in Virginia, particularly casino gambling,” Cox said via email. “I do not believe opening the Commonwealth to casino gambling is in the state’s long-term best interests.”

But his party is changing. The Colonial Downs legislation was sponsored by a Republican from Fauquier County, and the GOP delegate representing New Kent County — where both the track and the casino site are located — said he is excited about the possibilities.

“I think the mores, the social concerns over that have weakened a bit,” said Del. Chris Peace (R-New Kent). “I get the sense that if it was done right . . . New Kent is a very hospitable community and wants progress and would be a good partner.”

Historical horse racing

Horse racing has always been an easier sell in Virginia than casinos, thanks to racing’s long history here. Virginia claims that the first thoroughbred race in the United States was held in Gloucester in 1752.

But the state that produced Secretariat had turned away from the highest levels of the sport until Colonial Downs opened in 1997, on Interstate 64 about 30 minutes east of Richmond. Virginia has other facilities for steeplechase and harness racing, but this is the only thoroughbred track.

Owned and operated by Jacobs Entertainment of Colorado, the sprawling facility with Georgian-style construction also supported a network of as many as nine off-track betting parlors around the state. Over the years, though, Jacobs clashed with the state’s breeders, who wanted more racing with larger purses. Unable to resolve differences, Jacobs stopped racing in 2014.

Va.’s status as holdout on casino gambling hurt Colonial Downs

The Virginia Equine Alliance — a coalition of interests including breeders, harness racers and steeplechase groups — found a possible buyer for the track in a Chicago company called Revolutionary Racing.

But to make the economics work, the buyers wanted the ability to install a new type of product called historical horse racing machines to draw business even when there are no live races. The devices use video from old races with all identifying elements removed. Players can see the odds and make bets.

In this year’s General Assembly session, Del. Michael J. Webert (R-Fauquier) sponsored legislation to legalize the historical racing machines. Webert is a farmer whose family has a long involvement in horse racing. Many of his neighbors are part of the annual Virginia Gold Cup steeplechase classic, which draws 60,000 spectators and was held Saturday.

Revitalizing horse racing would have “a much broader impact than most people believe,” he said.

A study commissioned by Revolutionary Racing claimed that a revitalized Colonial Downs could generate $41.6 million per year in state and local tax revenue.

While the General Assembly has been reluctant to approve gambling-related legislation, Webert said he felt this year was the right time to push for it.

“The makeup of the House is different,” he said, referring to the fact that a crop of young Democrats, who might be friendlier to such measures, made gains in the House of Delegates in last fall’s elections.

Webert’s bill passed the House and Senate with bipartisan support and only modest debate. It was signed by Northam in April, clearing the way for the track sale.

With racing projected to start next spring, Webert said he could see a Pamunkey casino being a logical complement to Colonial Downs.

“Now that Maryland has opened their casino, we have gambling in pretty much all the states around Virginia,” he said. “There are folks who believe the morality side of gambling is bad . . . but, well, if they could spend that money here and the commonwealth could harness some of that revenue and put it to good use, why not?”

Economic independence

The Pamunkey tribe occupies 1,200 acres formed by an oxbow bend of the Pamunkey River in King William County, adjacent to New Kent County. It is said to be the oldest Indian reservation in the country, dating to the 1600s.

The tribe spent more than 30 years seeking federal recognition through an administrative process that gave it the ability to pursue economic projects such as gambling. The six other Virginia tribes that won federal recognition this year used a political process and — to help win support — stipulated that they would not seek to build casinos.

Pamunkey Chief Robert Gray said his tribe, which has fewer than 400 members, needs a way to become economically self-sufficient. The reservation land is beautiful — with low fields, wooded wetlands and the broad, twisting river on all sides — but does not generate any income.

“We would love to not be reliant on federal programs,” Gray said, “to have our own economic drivers funding the programs that we want to provide for our tribal members — housing, medical, job placement, education. It’d be great if we could just pay for that ourselves.”

The tribe is pursuing several possibilities, including becoming an Internet service provider, he said. But none of the other options would have the impact of a casino and resort.

The tribe has released few details about its plans beyond the $700 million figure for a 1,200-room hotel and casino, a spa and multiple restaurants. Last week, it disclosed that it had an interest in a 600-acre site near Quinton in New Kent County, just off I-64. The parcel was bought by investor Jon Yarbrough, a billionaire with ties to Native American gambling, as first reported by the Daily Press.

There’s still a long way to go, and the Pamunkey could consider other sites. Getting the land put into trust — a requirement before the work could begin — has taken years for tribes in other parts of the country. To have Class III gaming such as slot machines and roulette would require forming a compact with the state to share revenue.

And the Pamunkey are likely to face opposition from competitors. The backers of the MGM Grand even lobbied the federal government against recognizing the Pamunkey during the tribe’s application process, trying to head off the potential for a rival casino in Virginia.

The uncertainty produced a cautious official reaction last week in New Kent County, a largely rural area that serves as a bedroom community to Richmond on one end and Williamsburg on the other.

“At this point, we don’t really have enough information to even comment on it,” said Matthew Smolnik, the county’s director of community development. “We’re working internally to figure out what we need to do and what the next steps are.”

The casino would be a cannonball in the local economic pool. New Kent’s biggest private employer is a hospital, followed by a road contractor, Smolnik said.

The tribe projected that the casino could generate 4,000 jobs.

In the meantime, the Colonial Downs racetrack is likely to move into the top spot. At its peak, the track put about $750,000 a year directly into the county’s coffers, Smolnik said.

'Why not just keep that here?'

The prospect of both facilities being sited in New Kent in the next few years already has the community buzzing.

“It’s all been a little bit much,” said Jeanna Bouzek, vice president for operations at Colonial Downs, as she prepared the grounds for the big sale announcement last week. “We’ve gone from no gambling to now we’re poised for this opening up” — she gestured at the entrance to the track — “then a casino. I never thought I’d see it in my lifetime, to be honest.”

“I’m telling you, it’s exciting, man,” said Terence Davis, a real estate agent at the Coldwell Banker office near Colonial Downs. Davis lives in the Kentland golf community adjacent to the racetrack and said property values have suffered since the shutdown. The golf course almost closed.

Now it’s all roaring back, with the possible casino as icing on the cake. “It’s the best news I’ve heard,” Davis said. He often drives to Maryland to gamble, he said, “so why not just keep that here in Virginia?”

If there was a note of concern, it was that the pair of developments might be too much, too fast.

“I understand why the Pamunkeys want to do this,” said Courtney Sodan, who runs Sodan Armament with her husband just off the highway near Quinton. “I’m not opposed to the principle of them wanting to provide income, but I’ve never been a big fan of casinos and gambling.”

She said she worries that so much change might ruin the rural character of the area. “I was against the lottery, so I’m an old-school Virginian,” she said. “I just wish there were other options.”

But there aren’t many alternatives that promise this kind of revenue. So far this year, Maryland’s six casinos have hauled in more than $414 million, with nearly $150 million of that going to state and local coffers.

“They’re reaping a lot of money out of it,” said Virginia state Sen. Richard L. Saslaw (D-Fairfax), who has seen many failed gambling efforts during his 42 years in the legislature. With the state struggling to boost funding for education and to expand health care, Maryland’s windfall looks especially enticing.

“There’s no reason we shouldn’t do what Maryland’s done,” he said.