Del. Ken Plum: Skepticism on Casino Gaming in Virginia

Del. Ken Plum/File photoThis is an opinion column by Del. Ken Plum (D), who represents Reston in Virginia’s House of Delegates. It does not reflect the opinion of Reston Now.

After intensive lobbying by some local governments and private investors during the 2019 session, the General Assembly passed a bill requesting the Joint Legislative Audit Review Commission (JLARC) on which I serve to conduct a review of the impact if resort-style casinos were to be built in Bristol, Danville, Norfolk, Portsmouth, and Richmond. These locations represent a pattern only of local governments that are interested and /or private investors who want to invest there. The JLARC staff along with assistance of private consultants who specialize in gambling operations reported to the Commission last week. A copy of the report is available at jlarc.virginia.gov/landing- 2019-gaming.

Gambling has long been prohibited in Virginia, with the exception of the lottery, charitable gaming such as bingo, and wagering on horse races. Virginians currently wager over $1 billion annually on these forms of gaming, generating about $600 million in revenue for various purposes, primarily K-12 education. Nearby states permit more forms of gambling than Virginia does, including casino gaming, sports wagering, and online casino gaming.

According to estimates from The Innovation Group, a national gaming consultant who assisted JLARC staff with the study, resort-style casinos could be built and sustained in Bristol, Danville, Norfolk, Portsmouth, and Richmond. These estimates assume an initial $200 million to $300 million capital investment and an annual gaming revenue state tax rate of 27 percent (the national median). Casinos in these five locations are projected to generate about $970 million annually in net gaming revenue and approximately $260 million in gaming tax revenue for the state. For comparison, the Virginia Lottery generates over $600 million annually after prizes are paid out. About one-third of total casino revenue is projected to be generated by out-of-state visitors.

The projected median wage of $33,000 for casino employees would be below the median wage in the five localities. Not all casino jobs would represent a net gain of employment for the localities, and nearly half of the jobs would be low-skill and low-wage. Casino gambling would reduce the revenues in existing forms of gambling such as the Lottery that generates money for the schools.

According to the study, the prevalence of problem gambling in Virginia has not been measured, but evidence from national studies and states with a broad array of gaming options suggests that an estimated 5 to 10 percent of adults may experience gambling problems. The introduction of casinos would make more people at risk of experiencing problems as gambling opportunities increase.

The negative impacts of gambling are not limited to problem gamblers. The report indicates that research consistently shows adverse effects on others, most often a spouse or partner, but also the parents and children of problem gamblers, as well as other family members and close friends. The negative effects of problem gambling can be severe in a small portion of cases and include financial instability and mental health and relationship problems.

I am skeptical of introducing additional gambling opportunities in the Commonwealth. From what I have been able to learn, the modest revenues are not worth the risks involved. Is there something I am missing?

File photo

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