Richmond Casino Lawsuit to Challenge Transparency, ‘Black-Owned’ Discrepancy

Posted on: August 7, 2023, 08:16h. 

Last updated on: August 8, 2023, 09:04h.

The Richmond government’s decision not to hold another competitive bidding process for the capital city’s lone casino development opportunity may have consequences. A prominent lawyer and political activist in Virginia says he’s readying a lawsuit challenging that action.

Richmond casino Urban One Virginia gambling
An artist’s rendering of One Casino + Resort in Richmond, Va. The Richmond casino project was defeated by city voters during the November 2021 election. State lawmakers say a second vote on the capital city casino cannot be held until at least November 2023. (Image: One Casino + Resort)

Paul Goldman, a political strategist who was instrumental in Douglas Wilder making history in becoming the first Black person to serve as governor of Virginia in 1990, believes Richmond Mayor Levar Stoney (D) and the Richmond City Council failed to abide by the Virginia Public Procurement Act. The law requires state and local governments to hold competitive bidding rounds when seeking vendors or partners for an economic development project.

Richmond did hold a competitive bid in 2021 for its casino opportunity. Richmond was one of five cities that qualified through state legislation passed in 2022 that permits those cities to mull a casino to prop up their local economies. The casinos can only be approved with local voter support through a ballot referendum.

Richmonders in 2021 narrowly rejected a more than $500 million integrated resort plan called One Casino + Resort by a 51%-49% vote. Stoney and most of the City Council have since sought to reask voters about the project, with the thinking that a more coordinated message promoting the economic benefits that a Las Vegas-style resort would result in a different outcome.

Host Agreement Revived

Richmond in 2021 went with the One Casino + Resort, following a pitch led by Black-owned media conglomerate Urban One in conjunction with casino operator Peninsula Pacific Entertainment.

Richmond officials selected the Urban One plan over bids from recognized casino operators, including Golden Nugget, Bally’s, and The Cordish Companies. One of the reasons the Urban One plan was chosen was because the company touted the project as being the first commercial casino in the U.S. to be Black-owned.

The Richmond City Council’s efforts to hold a second casino referendum during the 2022 election were blocked. That’s because of a state provision authored by Sen. Joe Morrissey (D-Richmond, Petersburg) that was tacked into the state’s budget. Morrissey come January will lose his seat after he was defeated during the Democratic primary earlier this year. There have been no further efforts to prevent Richmond from asking voters for a second time about a casino undertaking.

Richmond’s City Council in June voted 8-1 to advance the casino referendum to the November 2023 ballot. The referendum reestablishes the city’s partnership with Urban One, though the company’s development partners have since changed.

Goldman says the city was required to conduct another competitive bid.

This is the most lucrative franchise the city has ever awarded,” Goldman told the Richmond Free Press. “And it was done without the kind of bidding process that was initially used in 2021. Both the [state] Constitution and the Virginia Procurement Act were written to prevent just this kind of ‘sweetheart’ deal.”

The four other cities that qualified for a casino, Norfolk, Portsmouth, Bristol, and Danville, all easily passed local gaming referendums during the November 2020 election.

Black-Owned Claim

The 2023 Urban One casino presentation is considerably different than its 2021 offer. While the entity hyped its potential to make history as the country’s first Black-owned casino two years ago, Urban One is now partnered with Churchill Downs after it acquired Peninsula Pacific last year.

Urban One and more than 50 local investors identifying as minorities were to own the casino in the 2021 pitch. In this year’s revamped ownership agreement, Urban One and Churchill Downs are to be 50-50 partners.

Goldman says neither Stoney nor the City Council have told the public about the significant ownership change. Goldman also says securities filings continue to show a list of local private investors involved in the project who would control 6% of the casino resort.

Either both Urban One and Churchill will have less than majority stakes, or one company will have less, but they cannot be 50-50 owners if others are taking 6%,” he said.

Goldman said he hopes to soon file the lawsuit challenging the transparency of the Richmond City Council deciding to reengage Urban One for its casino project. Despite his legal concerns, Goldman says he’s supportive of a second local gaming referendum. But he wants to assure that city residents can make “an informed vote.”