Virginia Lawmakers Approve Amendments

Virginia Governor Ralph Northam's (l.) signature is all that's missing to move forward legislation allowing casinos in five cities after local referendums. Lawmakers approved Northam's amendments, including one granting unregulated electronic skill games a one-year extension.

The Virginia General Assembly recently convened for one day to consider gambling legislation amendments focusing on electronic skill games, casino revenue and sports betting.

The most controversial proposal concerned the thousands of electronic games of skill that have sprung up across the state. Governor Ralph Northam had supported a ban on the unregulated, untaxed games which legislators said would cannibalize Virginia Lottery profits that help fund public education. However, legislators granted the games a one-year extension to operate. Northam promised to veto any future legislation that would extend the games beyond June 30, 2021.

He also will require the Virginia Alcoholic Beverage Control Authority to adopt regulations to govern the industry. Each machine will be taxed at $1,200 a month, which would generate $150 million over the next year for a Covid-19 relief fund to help small businesses survive the economic shutdown from the pandemic.

Pace-O-Matic subsidiary Queen of Virginia Skill & Entertainment, which operates 7,500 machines in 2,500 businesses, issued a statement thanking Northam and legislators. “We are pleased that a system for regulation and taxation of skill games has been put in place. This is something our company has long advocated that the commonwealth do,” the company said.

Legislators also adopted amendments legalizing casinos in Richmond, Danville, Bristol, Norfolk and Portsmouth. Now referendums can be held in each city on November 3 to allow residents to determine if they want a casino.

The original casino measure was passed and sent to Northam last month but he added several amendments, including raising gambling license fees, allocating the state’s share of gaming revenue to education and including the state’s two NASCAR racetracks among others allowed to partner with bookmakers on mobile sports betting. Sports wagering will be allowed on professional and collegiate sports, except those involving Virginia colleges and universities.

Casinos will pay 18 percent in taxes on their first $200 million of annual gaming revenue, increasing to 23 percent on revenue between $200 million and $400 million, with a maximum of 30 percent on revenue above $400 million. Sports wagering revenue will be taxed at 15 percent.