Virginia Senate Committee Passes Instant Racing Bill

A day after the Virginia House killed similar legislation, a proposal to raise money for transportation by allowing gamblers to bet on prerecorded horse races via Instant Racing machines passed out of a Senate committee Jan. 31.

Sen. Thomas Norment’s bill differs from the one rejected in the House in that it would dedicate 50% of the proceeds to transportation, 1% to the localities where off-track betting parlors are located, one-half percent to tourism, and 44% to Colonial Downs, which operates the state’s only pari-mutuel racetrack and OTB facilities. The remaining 3% would go to horsemen for purses.

A study commissioned by Colonial Downs estimated the measure would raise about $660 million a year by allowing gamblers to wager on prerecorded races shown on terminals. Of that, about $300 million would go to transportation and $1 million each to the localities where OTB parlors are located.

Norment said he acknowledges it will be difficult to round up the necessary 21 votes to get the proposal out of the Senate and almost impossible to persuade the conservative House, but he thinks the 52% share the state would receive for transportation, tourism, and local governments will help. The House plan directed only 49% of proceeds to transportation.

“When you’re talking hundreds of millions of dollars, 3 (percentage) points is a lot of money,” Norment said.

Norment is one of the architects of a compromise transportation plan that is working its way through the Senate. A rival plan is expected to be introduced soon. Legislators spent nine months last year trying to come up with a plan to rescue the state’s roads and rails from disrepair to no avail, but believe the pressure to get something done this year because all 140 delegates and senators are up for election.

Norment said the revenue from Instant Racing would provide a much-needed boost to any transportation plan. The machines contain a library of about 10,000 prerecorded races, and once a gambler inserts money, he or she has access to the same type of data on the horse, trainer, and jockey for each race that would be available for live races except that the machine does not reveal the horses’ names or where the race was run. The person can choose to watch the entire race or just the last few seconds.

Instant Racing is currently in place at racetracks in Arkansas and Oregon. The machines resemble video lottery terminals but are considered pari-mutuel because they are based on recycled races.

Norment said he had the Senate Finance Committee staff look at the Colonial Downs study, and by “conservative estimates” the state would take in between $50 million and $60 million the first year, and at least $150 million after the third year.

Ninety-five percent of all money taken in at the New Kent County racetrack and the OTB parlors would be paid out in winnings. Of the portion Colonial Downs would receive from the new machines, 8% must be spent on marketing the new machines, and the track also must team up with a gambling addiction group for education purposes, much like the state required when it created the state lottery.