By Carten Cordell Watchdog.org Virginia Bureau
ALEXANDRIA — State Sen. Louise Lucas, D-Portsmouth, wants to bring gaming to Hampton Roads.
She has filed SB689, which would bring casino gambling to Virginia, or more specifically, Portsmouth. Lawmakers will reconvene in about six months.
The bill requires that casinos be in an area where 40 percent of the land is exempt from local property taxes, including Lucas’ constituency.
Portsmouth, tax records show, barely clears the proposed casino cutoff; 42 percent of its land is exempt from property tax, thanks in part to the city’s port operations. The exemptions took more than $67 million in tax revenue off the table in fiscal 2010.
The only other locality meeting Lucas’ criteria is Lexington, home to Washington & Lee University and the Virginia Military Institute, which is 47 percent exempt and missed out on $3.4 million in tax revenue in fiscal 2010.
Nottoway and Norfolk are 39 percent and 35 percent exempt, respectively.
Lexington mayor Mimi Elrod says the town’s historic and educational identity make casinos unlikely.
“It’s not particularly consistent with our city,” she said. “I can only speak for myself, but I don’t think there would be a lot of people that would look forward to a casino here.”
But with increases in spending for services and pension reform requiring salary increases for government employees, cities are looking to generate revenue.
“All the localities are very stressed,” she said. “The General Assembly is passing on a lot of financial obligations to us. It is not that we disagree with the act itself, it is just that we are so limited with how we can raise revenue.”
By cornering the market on casino development, Portsmouth could hold a potential monopoly on millions in taxable income.
“That’s unique,” said Paul Girvan, managing director of The Innovation Group, a New Orleans-based consulting firm for the gaming, entertainment and hospitality industries. “I understand the thinking to identify communities where their tax base is limited for whatever reason. I have not seen this structure related to casinos.”
The Innovation Group has tracked the development of the gaming industry in a number of states, including neighbors West Virginia, Pennsylvania and Maryland. Girvan said the respective legislatures have welcomed gambling, which helps pad the state’s checkbook.
“There is a myriad of things that can be done from a public policy perspective to shape and control the gaming industry,” he said. “The question is what your primary goals are?”
The casino debate isn’t new to Virginia. Proponents have tried — through the 1990s and even up until 2010 — to bring riverboat gambling to the commonwealth, only to see the Legislature sink the idea.
Virginia has a pari-mutuel horse track, Colonial Downs, in New Kent and 10 off-site betting locations in areas such as Richmond, Glen Allen and Chesapeake
Still, the state has a history of rejecting casinos.
But with budgets shrinking and the $2.1 billion Midtown Tunnel extension coming, the possibility of new revenue without new taxes or tolls make gambling a tantalizing option for Portsmouth.
To compare, West Virginia’s four gaming markets have taken in $463.7 million in revenue so far this year, Maryland’s two slot-only casinos have made $85.8 million, and Pennsylvania’s six markets have made more than $1.3 billion.
Maryland plans to open two new slot-machine casinos by 2014, and it’s pursuing gaming in Prince George and Anne Arundel counties, with slot and table games to bring in more tax revenue.
Girvan said Portsmouth’s proximity to the coast, as well as to North Carolina, make it an attractive location for casino developers. North Carolina operates a lottery but doesn’t have gaming, with the exception of an American-Indian casino in Cherokee, in the southwest corner of the state.
“That would be an attractive option for the state for a number of reasons,” he said. “One, you would be serving (North Carolina’s metropolitan) markets. Secondly, you are bringing dollars into the state from out-of-state residents. You have got Raleigh-Durham, Greensboro, Winston-Salem, a number of places that aren’t exactly a million miles away.”
Lucas’ bill would set up a state gaming commission, appointed by the governor, and would require casino patrons to be 21 or older.
Lucas failed to return calls seeking comment before publication time.