Churchill Downs, Despite Richmond Casino Defeat, Betting Big on Virginia

Posted on: November 8, 2023, 10:59h. 

Last updated on: November 9, 2023, 05:08h.

Churchill Downs lost its bid to build a casino resort in Richmond during Tuesday’s election.

Churchill Downs Virginia The Rose HHR
Construction continues on The Rose, a $372 million resort being built by Churchill Downs in Dumfries, Va. Churchill Downs lost its bid to build a casino in Richmond, but that could help its future financial performance at The Rose. (Image: Prince William Times)

Richmond voters rejected the $562 million project Churchill pitched with media conglomerate Urban One by a 58%-42% tally. Divisive messaging from Urban One founder Cathy Hughes likely didn’t do the project any favors, as whiter, more affluent communities heavily voted against the Richmond Grand Resort & Casino.

Despite Churchill Downs and Urban One spending more than $10 million on the casino campaign, voters in the Virginia capital for a second time in three years refused the city council and Richmond Mayor Levar Stoney’s request to authorize a Las Vegas-style casino resort.

Not all is lost for Churchill, however, as the company is still moving forward with a gaming resort in Dumfries.

The Rose Progresses

Churchill Downs obtained the Richmond casino development opportunity last year when it acquired most of Peninsula Pacific Entertainment (P2E) for $2.5 billion. Peninsula Pacific had partnered with Urban One on its failed 2021 Richmond casino referendum.

Churchill’s takeover of P2E was more focused on acquiring Peninsula Pacific’s historical horse racing (HHR) operations in Virginia. Operating under the Rosie’s Gaming Emporium brand, Churchill’s purchase of P2E included seven HHR gaming locations in the commonwealth. Richmond wasn’t Churchill Downs’ only defeat on Election Day, however, as voters in Manassas Park rejected a local referendum that would have allowed an eighth Rosie’s to open in the town.

But Churchill is following through with P2E’s plan to build an HHR resort in Dumfries along Interstate 95. The resort is being built adjacent to a 79-acre landfill that’s being converted into a public park.

The Rose Gaming Resort, as the project is called, is a $372 million investment that will feature a 305-room luxury hotel, 15,000 square feet of convention space, a 1,500-seat theater, and a 50,000-square-foot casino with 1,100 HHR machines. Virginia legalized HHR gaming in 2018 to save its horse racing industry and the Colonial Downs Racetrack.

HHR games look like slot machines but differ in how they determine play outcomes. The terminals are pari-mutuel in nature and deduce outcomes based on previously run horse races. Players typically pick an auto-bet feature that gives them the horse with the best odds.

Players wagered more than $4 billion on HHR machines in Virginia last year.

Churchill Downs’ possession of the exclusive rights to HHR games in Virginia gained value last month when the state’s Supreme Court ruled that skill games are illegal. The controversial machines differ from a traditional slot in that a play must identify a winning payline. Law enforcement has been cleared to seize the machines that continue to clutter restaurants and bars, convenience stores, and gas stations.

Regional Monopoly

With Richmond voters again rejecting a casino, the odds appear strong that the capital city will remain free of a Las Vegas-style resort for the foreseeable future. Churchill was set to operate the Richmond Grand and share in its revenue, but the referendum denial plays into The Rose’s hand, as the HHR resort will possess a regional gaming monopoly.

Virginia’s 2020 commercial gaming bill authorized casinos in only five cities, with voters in Norfolk, Portsmouth, Bristol, and Danville signing off on their proposed casino projects.

The Rose will be the closest gaming facility serving Northern Virginia, which is one of the wealthiest regions in the US. MGM National Harbor in Maryland’s Oxon Hill does target Northern Virginia, but The Rose will give many players in the region a closer, more convenient option than traveling northeast across the Potomac in the heavily congested DC metro area.