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Virginia Gaming Expansion Bill Returns to Legislature

The state of Virginia appeared ready to legalize sports betting, but there is another hurdle that the lawmakers must jump over. Governor Ralph Northam declined to sign a gaming expansion bill, but instead amended the proposal and sent it back to lawmakers in the state.

Northam has repeatedly expressed his support of expanding gaming law, but he took issue with some of the language that was included in the current bill. Most lawmakers believed that Northam would sign the bill as it was presented to him, but it will now take some additional work to get the law passed.

Northam has expressed his support in legalizing commercial gambling to bring in new revenue in the state of Virginia. Northam has also noted that legalized commercial gambling will bring new jobs and opportunities to areas that are struggling financially.

He was largely in support of the expanded gaming law that ended up on his desk, but he did not like where the majority of the funds were going.

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The bill that was sent to Governor Northam was to place funds from the new commercial gambling projects into the Virginia General Fund. Governor Northam amended the bill so that two-thirds of the money would be earmarked to education projects within the state.

Several other states that have legalized sports betting in the past have dedicated that money to improving education. The money could be used for a wide range of projects, but Northam appears ready to sign the bill only if the new language is included.

The expanding gambling law would limit the construction of new commercial casinos to just five cities in the state. There are some strict criteria included in the law, which is an effort to improve the financial and economic status of these cities.

To be eligible for a new casino, cities must have had an unemployment rate of at least five percent in 2018, and a poverty rate of at least 20 percent in 2017. Cities also must have had a population decrease of at least 20 percent from 1990 to 2016.

The five cities that qualify under these criteria are Bristol, Danville, Norfolk, Portsmouth, and Richmond. All five of the cities have expressed interest in building a new commercial casino if this legislation passes.

Potential Impact

The importance of this expanding gambling bill exceeds the building of new casinos. It also lays the groundwork for legalized sports betting in the state, and lawmakers have been working hard to get this passed over the last few years.

The General Assembly will now have to reconvene on the issue, after passing the initial bill through just a few days before the end of their 60-day session.

Lawmakers are scheduled to reconvene on April 22, but this date could be pushed back due to the ongoing coronavirus pandemic. When they do meet again, lawmakers can decide to approve Northam’s amendment, or leave it alone.

If they decide to vote and approve his amendment, then the expanding casino gambling bill will become a law. If they don’t act on his amendment, it will be up to Northam to veto the bill or sign it into law.

The tax structure and licensing fees have not been changed in the governor’s amended proposal. Sports betting licenses would still cost $250,000 for a three-year permit, with a renewal cost set at $200,000.

Fifteen percent of the net profit would be shared with the state. Casinos would pay a minimum of 18% tax on all gross gambling revenue, with the taxes increasing for every amount over $200 million.

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