Report: Casino Could Generate $30M In Yearly Local Taxes
A report commissioned by Richmond officials estimates a resort casino could add between $29.6 and $31.4 million dollars to the city budget annually, depending on location.
The report, produced by New Orleans-based consultants Convergence Strategy Group, looked at casino market conditions in Central Virginia and forecasted the economic impacts on the city. The figures related to potential tax revenue include non-gaming taxes such as hotel and food and beverage taxes, as well as the potential hit to revenue the city gets from historic horse racing machines at Rosie’s Gaming Emporium. The consultants say a casino resort would draw customers from Rosie’s and negatively impact city revenues from the gaming emporium by about $550,000 to $750,000.
Leonard Sledge, head of Richmond’s Department of Economic Development, recently told City Council that economic development projects, including casinos, can help fund important city services like schools and affordable housing.
“We pursue opportunities such as a resort casino in the City of Richmond not just for the purpose of having one, but to generate much-needed revenue to address our priorities,” Sledge said.
The amount of revenue the city can expect to receive from a casino, and the effects on existing gaming businesses, are dependent upon where in Richmond the casino is built, according to the Convergence Strategy Group report.
Last week, an evaluation panel appointed by Mayor Levar Stoney selected three finalist proposals that will move forward: a casino from Cordish Companies on the Bow Tie Cinema’s property near Scott’s Addition, a casino project from Bally’s in the Stratford Hills neighborhood, and a proposal from Urban One to build a casino near the Port of Richmond.
Convergence Strategy Group identified Downtown Richmond as the casino resort location that would attract the most patrons and generate the most revenue. None of the final proposals would be located downtown.
The second most successful location would be a site in northwest Richmond. That would include the Cordish Companies’ Scott’s Addition proposal. According to the report, a casino in that area would generate an estimated $30,390,862. The other two proposals, both located south of the James River, would be expected to generate about $720,000 less in local tax revenue annually.
The report also estimates that a new casino resort, regardless of location, would be expected to create between 1,875 to 2,035 full-time equivalent jobs in the region.
Scott Fisher, co-founder and managing partner of Convergence Strategy Group, noted in a presentation to City Council that Richmond could ensure many of those jobs go directly to city residents through a developer agreement.
“With a casino resort being a 24/7 operation with a mix of needs for skilled and unskilled labor, it has the opportunity to bring hundreds of Richmonders back into the labor force as well as to get unemployed people back to work,” Fisher said.
The report outlined few negative socioeconomic impacts. The consultants said that after speaking with public safety and local economic development officials across the country, they found that casinos’ reliance on city law enforcement services “is no different than a new, big-box store.” A widely-cited 2006 study of counties in Nevada with casinos found little effect on crime in the short term, but a larger long-term effect including problem gambling.
Local critics of casino development have argued that the industry extracts money from poor people. The consultant’s report found that about a quarter of all gaming revenue would come from the pockets of Richmond residents.
In a column published in Blue Virginia, School Board Member Stephanie Rizzi said she’s opposed to a Richmond casino, in part, because “casinos prey on the poor.”
“Like the lottery, casinos prey on poor, Black and Latinx people and their dreams for better life, and deeply affect the economic wellbeing of marginal and disenfranchised communities,” Rizzi said. “All one has to do is drive by Rosies at midnight and see a line of Black and brown people desperate to make their dreams come true.”
The estimates and projections provided in the Convergence Strategy Group report could change based on the future competition for a Richmond-market casino.
In 2019, the Virginia General Assembly passed legislation allowing for Richmond and four other localities — Bristol, Danvillie, Norfolk and Portsmouth — to host a casino. Residents in the other localities overwhelmingly approved casino proposals in a referendum, meaning a local casino will face increasing competition from within Virginia in a couple years.
Colonial Downs also opened a new 150-game Rosie’s in Dumfries earlier this year. According to the Prince William Times, there may be some plans to expand the Dumfries location to resemble something more like a casino resort.
Convergence Strategy Group estimated that an expansion of the Dumfries Rosie’s could siphon off about $1 million in Richmond’s potential gaming revenue.