After gaining approval 23-14 by the Virginia Senate, an Instant Racing bill returns to the Virginia House where a similar bill failed to get out of committee several weeks ago.
Earlier this month, a House version of the bill was tabled in the House Committee on General Laws. The committee could hear the Senate bill (SB 1410) Feb. 15. Should it pass, it would be one of the first bills heard on the House floor after President’s Day weekend. Virginia’s General Assembly session ends Feb. 24.
The popularity of the bill has fluctuated, as issues associated with a larger transportation legislative package developed. As part of the plan, $250 million usually targeted for education, emergency services, and social services would be more available for transportation.
“It started out as the same time as the transportation bill. Interest has grown in it as an alternative source of funding,” said Chris Bridge, a legislative consultant to Colonial Downs.
Proponents of the Instant Racing bill said it would generate funds for much needed transportation without raising taxes. Opponents believe it sets a precedent to expand gaming when budget issues arise.
“We are working to contact and discuss the bill with members of the House General Laws Committee,” Bridge said. “We’re approaching it in the same way we did that first time around, which was to inform legislators that is it consistent with the existing public policy established for pari-mutuel and transportation funding. It is a more attractive proposal now with the increased funding for the horsemen, the localities, Virginia tourism, and transportation.”
According to Bridge, the 5%-10% takeout on Instant Racing would be less than live pari-mutuel racing. After takeout, the Senate-approved version of the bill provides 50.5% of the proceeds to be distributed to the Commonwealth Transportation Board, 1.5% to the locality where the racetrack or off-track betting parlor is located, 0.5% to Virginia Tourism Corporation, 4% to Virginia horsemen, and 43.5% to the licensee, Colonial Downs.
According to a study prepared for Colonial Downs by The Innovation Group, about $660 million would be generated. Handicapping the impact, $333 million would be raised for transportation, $9.9 million for host localities, $3.3 million for the Virginia Tourism Corporation, and $26.4 million in purses. The horseman’s share of 4% has varied from 3% to 6% in different versions of the bill. Colonial Downs is projected to generate $287 million in gross revenue as licensee.
After expenses such as royalties, marketing, and labor, Colonial Downs would expect a $17.5-million return on investment under those projections, Bridge said. The Maryland Jockey Club would receive a portion of the revenue as part of the purchase agreement Colonial Downs made with MJC on its management contract in 2005.
Gov. Tim Kaine has questioned the revenue projections of Instant Racing. “I think the estimates are...who knows?" he said in an Associated Press report. "I’ve talked to my budget folks and they just say they really have no way of knowing."