Churchill Downs Inc. has a large presence already in Virginia’s gaming market, and a couple of referendums on Election Day could lead to the Louisville-based company adding to that.
The bigger of the two referendums will take place in Richmond, where voters will be asked for the second time since 2021 to allow casino gaming in the Virginia capital city. That year, voters rejected the measure by less than 1,500 votes out of nearly 79,000 ballots cast. Virginia sportsbooks have been legal since January 2021.
Churchill Downs wasn’t involved in the project two years ago. Urban One teamed with Peninsula Pacific Entertainment to propose a nearly $600 million casino resort. Churchill became involved after it acquired most of P2E’s gaming assets last year in a $2.75 billion deal.
But beyond the casino rights, Churchill also acquired P2E’s horse racing assets in the state. That included Colonial Downs, a thoroughbred track located halfway between Richmond and Hampton Roads in New Kent, and the chain of Rosie’s Gaming Emporiums, historical horse racing gaming halls across the state. Historical horse racing, also known as HHR, is a game that looks like a slot machine you would find at a casino. However, because each wager is based on the outcome of previously contested horse races, the machines are considered pari-mutuel gambling.
There are currently seven Rosie’s locations scattered across Virginia. That includes one in Dumfries, a Washington, D.C. suburb. That venue has 150 machines, but Churchill Downs is also constructing The Rose, a $372 million resort. When completed next year, it will feature more than 1,100 HHR machines, a 1,500-seat theater, 15,000 square feet of convention space and a hotel. There are also Rosie’s in Richmond and at Colonial Downs. Combined, those two account for 1,274 of the more than 2,600 HHR machines in the state. All of them are at Rosie’s locations.
Casino Referendum Offers Opportunity
According to data from the Virginia Racing Commission, the HHR halls have generated a handle of $2.78 billion for the first eight months of the year. Those machines have generated revenues of more than $247 million, with the commission, equine funds, problem gambling and the municipalities splitting $34.7 million. Churchill Downs has received $211.9 million.
With HHR being extremely lucrative for the company in Virginia, one might wonder why Churchill Downs is interested in having a casino in Richmond, a facility that could take away players from Colonial Downs and the emporium in Richmond.
Churchill Downs Inc. CEO Bill Carstanjen admits that’s “a fair question,” but in a recent interview with BetVirginia.com during the Global Gaming Expo held earlier this month in Las Vegas, he said the chance to have a Class III casino resort is one Churchill Downs can’t pass up.
Although sports betting and retail casinos are legal, Virginia online casinos — casino-style gaming conducted on mobile devices — is not.
“To be in a state where you’ve invested so much capital and time and effort learning the legislative process, meeting all the different people that are influential in the state, to have an opportunity to go after this other form of gaming, that’s not inconsistent, it’s just an additional opportunity,” Carstanjen said. “That really is the driver of it. It’s offense. It’s not defense.”
Richmond is one of five communities approved to host a casino by the Virginia General Assembly more than three years ago. Voters in the other communities have already approved their referendums, with casinos open in Bristol, Danville and Portsmouth. Construction on a casino in Norfolk is expected to start within the next year. The Portsmouth location features a BetRivers Virginia retail sportsbook.
HHR Business May Expand, Too
The second Virginia referendum involving Churchill Downs will occur in Manassas Park, a D.C. bedroom community 25 miles southwest of the nation’s capital. The question before voters there asks if they will allow “pari-mutuel wagering be permitted in the City of Manassas Park at satellite facilities in accordance” with Virginia state law.
According to ManassasParkWins.com, if voters approve the measure, the gaming hall will create 150 jobs that pay at least $15 an hour and have an annual average salary of $47,000 plus benefits. Supporters also say Rosie’s would generate $1.5 million in gaming taxes and additional taxes stemming from visitors coming to the city and from the construction of the facility. If approved, it would give Churchill Downs eight facilities across the state. Virginia law allows for up to 10 HHR gaming halls.