2021 Election Preview Part 5: ONE More Thing

It’s the RVAPolitics 2021 Election Preview! I’ll be looking at aspects of the election in 5 parts over the next 2 weeks:

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This one is just for residents of the City of Richmond, as they are the ones with a voter referendum on the ballot this year. The question is simple: should we allow a casino to be built on the city’s south side?

First, a reminder on how we got here:

Last year, the General Assembly passed a law that would allow a few cities around the state to consider casino gambling, subject to voter approval. In 2020, residents in the cities of Bristol, Danville, Norfolk and Portsmouth all voted in favor, by large margins. This year it’s Richmond’s turn.

Mayor Levar Stoney’s administration eventually decided on a single proposal fronted by Urban One, a Maryland-based media corporation. The process of rejecting other proposals and finding a site was… not the best, characterized by abrupt decision-making, campaign donations from investors, and some ugly arguments from NIMBY folks throughout the city. But here we are.

If you live in the city, you’ve probably gotten eleventy-billion direct mail flyers promoting the project. But the deal has some things going for it.

No development project is completely free to taxpayers; there are always hidden costs to, say, infrastructure or policing. Still, this project does not require massive amounts of taxpayer subsidies or complicated finance mechanisms. The city does not have to provide free land or make some kind of incentive payment. Instead, Urban One has promised to provide the city with $25M even before they break ground, and the contract supposedly will involve payments from the casino corporation over the years to support public initiatives and local non-profits.

Still, there appears to be no community benefits agreement. (UPDATE - the city’s agreement with the developers includes a “Community Benefits” section, although again, without any clear enforcement mechanisms.) And early evaluations of Urban One’s negotiations with the city suggest that there is very little in the way of enforcement mechanisms. For example, Urban One is touting how the casino will create a number of high-paying jobs. But it is not clear how the city will hold the corporation to its promises. What if the casino hires fewer workers than promised, or pays lower wages, citing any number of excuses? Nobody knows.

The city is counting on something like $30 million in extra tax revenues each year coming from this casino. Still, it is worth noting that there should already be four others operating throughout the state by the time Richmond’s opens. How much will all of these new entertainment venues cannibalize revenues from existing ones rather than bring in new tourist dollars? Richmond is actually a better bet (har) for a casino due to its location; wealthy folks from NoVA and other parts are more likely to come here than, say, Bristol. Still, how much are we all competing for the same slice of the pie?

And about that pie: we might call casinos an “extractive” industry. Rather than removing minerals from the ground, though, they remove money from folks’ pockets. That might be OK if you are wealthy; dropping a few hundred bucks in a casino while enjoying a show and nice dinner could be a fun weekend. But casinos actually generate a lot of their revenue from slot machines, which feed gambling addiction and are favored by low income visitors who can ill afford their losses.

My take on this project overall is that it will be a mixed bag. Will it generate more revenue for the city? Surely yes in the short term, with up-front payments and high tax revenue as people come to check out the city’s shiny new object. The casino might also kick-start some development on the south side -- although that will also be a mixed bag, with possibly increased tax revenues from the city balanced against gentrification concerns for existing residents. There probably will be some new jobs for city residents, maybe even good ones. But there are also sure to be regrets and recriminations as well, as the conglomerate behind the casino fails to meet some of its promises about jobs, wages, tax revenue, even parkland. (55 acres of green space! We’ll see.)

I would feel better about the project if I had any faith that the city would use the revenue generated to help its most vulnerable residents in the south side, an area historically neglected for everything from economic development to infrastructure. But most members of the City Council seem determined to avoid any kind of geographic equity conversation. Overall, I am fairly skeptical that the amount of revenue generated will produce enough good works from the city to counter the damage from problem gambling and wealth extraction.

This is a tough one, but I am voting no. I can understand a yes vote, but only if the person doing so is fully reckoning with the costs – not financial, but real human costs – that casino gambling will bring to the city. Good luck with that.

Richard MeagherComment