Bill that would require referendum for Henrico gaming facility, or force it to cede revenue, advances

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A bill from Henrico Senator Schuyler VanValkenburg (D-16th District) that would force a Henrico gaming facility to submit itself to a public referendum or forego significant revenue from its historical horse racing machines has advanced in the Virginia Senate.
Senate Bill 1223 passed the Senate’s General Laws and Technology Committee by a 13-1 vote Jan. 22 and now will advance to the Senate Finance and Appropriations Committee. The bill passed the GLT’s Gaming subcommittee by an 8-0 vote Jan. 20.
Churchill Downs is planning to open its Roseshire gaming facility in the Staples Mill shopping center at Glenside Drive and Staples Mill Road in Henrico. Because the company submitted plans for the facility five days before the Henrico Board of Supervisors updated county code last year, it was grandfathered under existing code and permitted by right to open on the B-2 (Business District) site.
Henrico officials, however, were furious that the company proceeded with its plans knowing that the board was about to change the code to require any proposed historical horse racing facility to go through a public hearing process in order to earn approval. Though Churchill Downs did nothing illegal, county officials and elected state officials who represent the county viewed the move as an inappropriate end-around tactic.
VanValkenburg’s bill is viewed as a last-ditch effort to force Churchill Downs to submit it to public scrutiny or give up a significant amount of revenue. It would require the company to submit the facility to a public referendum or else accept a reduced percentage of wagering pools from Roseshire (3.5%). The eight other historical horse racing facilities currently operating in Virginia – all satellite facilities of Churchill Downs-owned Colonial Downs race track in New Kent County – are permitted to retain between 7.3% and 7.9% of wagering pools.
The bill also would earmark 10% of that reduced amount to be split evenly by the locality and the state as a tax payment, further reducing the company’s share.
During the Gaming subcommittee hearing, Churchill Downs spokesperson Aaron Palmer told legislators that passage of the bill would “put us out of business” at the location. The bill, he said, also would unfairly single out Churchill Downs and its planned facility even though it had followed all existing legal requirements.
The company has not announced an opening date for Roseshire, but contractors have been working at the site for months and the company obtained a building permit for it Nov. 7.
HHR machines look like slot machines but allow people to wager on previously run horse races by selecting a horse (by number) after viewing its past race performances. Horses and their jockeys are not identified by name. The machines show only the last 10 seconds or so of a given race, and thousands of races are included in the system’s database.
If the HHR machines at Roseshire generate the same average amount of daily revenue that three of the HHR facilities nearest to that site generated last year, Roseshire would produce $337.72 million in total revenue during a full year. At that level, Churchill Downs would receive a payout of between $24.6 million and $26.6 million under current law or about $10 million if VanValkenburg’s bill passes.