Virginia Legislature Passes Betting Machine Bill for Colonial Downs

Virginia Historical Horse Race Betting

The Virginia Racing Commission can decide whether to legalize historical horse betting at off-track facilities.

The former Colonial Downs racetrack in New Kent County, Virginia might be reopened soon with gaming machines. The Virginia Senate passed a bill this week that would legalized video lottery terminals (VLTs), which are slot machine style gambling machines.

If Gov. Ralph Northam signs it into law, then the former Colonial Downs could have video lottery gambling in the near future. The bill passed with little opposition in either house of the legislature.

House Bill 1609 made it through the House of Delegates with a 79-21 vote, then cleared the Senate by a margin of 31-9. The bill, proposed by Del. Michael Webert, R-Fauquier, is now making its way to Gov. Ralph Northam.

Ralph Northam to Sign HB1609

Governor Northam said previously he has little or no reservations regarding gaming machines at Colonial Downs. He encouraged residents of Virginia to be “open-minded” to the idea of a  historical horse race betting facility during last year’s gubernatorial campaign.

Northam spoke with reporters earlier this month saying that, “If this is an opening to more casino gambling in Virginia, that’s something we’re going to have to discuss with legislators and communities, et cetera. But the way I see this moving forward is to reopen that track. And I think that’s a good thing for Virginia.”

The idea of a system that uses betting machines to allow players to bet on pari-mutuel races that have already taken place passed the General Assembly last month. Such betting is widespread at off-track betting facilities across America.

Revolutionary Racing and Colonial Downs

Revolutionary Racing, the prospective buyers of the closed down Colonial Downs racetrack is looking at the addition of the new betting machines as a critical part of the sale. The Chicago-based buyer has mentioned that the machines could possibly generate an estimated $161.9 million per year. That revenue that would help to support the state’s horse racing industry as well as help to fill government tax funds.

Northam has to come to a final decision on the bill by April 9. Once he reviews the bill, local media suggest he might recommend changes, but Northam said he has not seen any indication of clauses that would turn him against the bill entirely. During the campaign, Northam discussed the state’s loss of revenues due to their distaste for gambling.

The Commonwealth of Virginia currently sees capital flight, as potential gambling dollars by sending it across state lines to its neighbors.

“Going Across State Lines”

Gov. Northam said recently, “There’s a tremendous amount of money in Virginia that’s going across state lines, whether it be in West Virginia or Maryland or Delaware. And I think we’ve got to be open-minded. Certainly, we don’t want to do something that’s regressive to people or is hurtful to people.”

Northam said he is not for gambling in every case,“But if there are individuals who want to do that and are going to other states, I think we should be open-minded in Virginia.”

Family Foundation of Virginia

Several anti-gambling groups have surfaced to protest their fears if the bill were to pass. Many Virginians have expressed their concerns about the potential hurt these gambling opportunities can bring on families by exposing them to gambling addictions that could drain their bank accounts.

Victoria Cobb, the president of the Family Foundation of Virginia, “We’re incredibly disappointed that the General Assembly would pass a massive gambling expansion that is the equivalent of slots under the guise of saving the horse-racing industry. This definitely raises the concern that we have now opened the door to casinos.”

Virginia Racing Commission’s Role

If Northam signs HB1609, the Virginia Racing Commission will then have 180 days to create stricter and more detailed regulations for the newly opened Colonial Downs. Revolutionary Racing plans to stay patient and positive while awaiting the decision by Northam and the racing commission.

Mark Hubbard, a McGuireWoods communications consultant, a company which represents Revolutionary Racing, said, “We look forward to working with the Virginia Racing Commission as guidelines are established in the coming months and sharing with the public our plans to re-open Colonial Downs hopefully before the end of the year.”

Colonial Downs Tax Revenue Breakdown

Outside of the main Colonial Downs facility, the legislation will also determine whether the new machines will be welcome at off-track betting facilities within the state as well. If passed, the bill states that the gaming machines’ revenue will include 1.25% set aside for tax purposes, 0.75% would be going to the state, and 0.5% of the revenue go to New Kent.

As for off-track facilities, the revenue would be divided between New Kent and the county or city in which the satellite facility is located. The racing commission has estimated that each of the new machines could produce roughly $150 per day.

Colonial Downs’ Previous Demise

Back in 2014, Colonial Downs shut down indefinitely. The owner at the time, Jeff Jacob,s surrendered the racing tracks license over a dispute he had with the state’s traditional horseman’s association. The racetrack is located on Interstate 64 between Richmond and Williamsburg.

Amid the Colonial Downs shutdown, several horse racing groups have come together to create the Virginia Equine Alliance. The alliance sees historical horse race wagering as “critical to securing the long-term success of the horse-racing industry”.

Several other states allow the use of historical races for the purposes of betting. The terminals use video archive of past horse races, but with the identifying details about the exact race hidden. Historical race betting does not allow bettors to know the horses running in it, but does allow the player to see the odds.

Some critics and some courts believe the machines are just “dressed-up slot machines” – as it is often said — with only a questionable link to pari-mutuel horse race wagering.