A destination resort casino could bring in about $363.5 million in gaming revenues in 2022 if located at a highway site in the area, according to the results of a study presented to Danville City Council during a work session Tuesday evening.
The operation would create up to 2,377 direct jobs, with wages totaling $75.7 million. Total property revenues at that highway location — including hotel, food and beverage and other revenues, could reach $436.5 million, according to the study conducted by Convergence Strategy Group in New Orleans.
Scott Fisher, managing partner and co-founder at Convergence, told council members his firm did not conduct the study as a supporter of gaming.
“It was not to be an advocate of gaming,” Fisher said at the start of his presentation. “It would be to help the city — understand the pros and cons, impacts, jobs and what different locations would generate in terms of taxes, jobs and impacts.”
The firm analyzed potential for casino gaming at four locations in the city: the White Mill, an unnamed highway location, Schoolfield at the former Dan River Inc. industrial site on West Main Street and the Piedmont Drive retail corridor.
Convergence examined two separate scenarios for each location:
- A destination resort-scale casino with 2,500 slot machines, 100 table games, about 325 hotel rooms, multiple food and beverage offerings and other resort amenities;
- A smaller casino with 1,200 slot machines, 60 table games, about 225 hotel rooms, food-and-beverage offerings and limited amenities.
It also looked at the impact of a historic horse racing — or off-track betting — facility.
In addition, the authors of the study also interviewed public safety officials in 12 other cities similar in size to Danville that have casinos to find out their impacts on crime.
“The result was pretty universal that the impacts were not felt,” Fisher told councilmembers.
A large highway casino resort would also bring in about $4 million to $4.5 million in gaming taxes that would be distributed locally. Danville could expect an additional $4.8 million to $5.4 million in incremental hotel, meal and sales taxes if a large casino resort is developed, according to the study.
The city hired the firm in July and paid them $43,475 — plus an additional allowance for any needed hourly work — for the study, said City Manager Ken Larking.
Last year, the General Assembly approved legislation that could pave the way for commercial casino operations in a few economically challenged cities — including Danville — if approved by voter referendums. The process is currently on hold pending completion of a study by the Joint Legislative Audit Review Commission, and the legislation is subject to ratification during the 2020 General Assembly.
In addition, the Pamunkey Indian Tribe is looking to establish two casinos in Virginia — either through federal approval or if the state bill is ratified — that the tribe could agree to operate under state law.
“Since Danville was named in the legislation as one of a few cities that could have an opportunity to vote on allowing casinos, I felt it would be helpful to have outside expertise familiar with the casino industry assisting us through this process,” Larking said via email Tuesday. “Should the citizens of Danville get the opportunity to vote in favor, we are better positioned to make decisions in the best interests of our community.”
As for the highway location, Larking said officials did not want the study to specify which highway because it would send a signal to potential casino operators that city officials prefer a certain site.
Mayor Alonzo Jones agreed with refraining from mentioning specific sites not owned by the city.
“The reason we don’t reveal this information is because it could negatively impact the negotiating power of the city in future discussions,” Jones said at the beginning of the work session.
Later during the work session, Councilman Adam Tomer pointed out the “ignorance” on social media linking gaming and increased crime.
“There are people saying it’s going to create so much crime,” Tomer said to Fisher. “You went out and talked to these other localities and you asked the police chiefs. That’s important. There is no data to back it up whatsoever on gaming causing increased crime —.”
A scaled-down casino at the highway site could generate about $233 to $280 million in gaming revenues and $275 million to $330 million in total property revenues, according to the study. It would create between 1,480 and 1,780 jobs, contribute $2.9 million to $3.5 million in gaming taxes locally, and between $3.1 million and $3.6 million in additional hotel, meal and sales taxes.
Regarding the alternatives, a historic horse racing facility at the White Mill with 600 devices and no table games would bring in nearly $59 million in gaming revenues in 2022 and $4 million in local gaming tax revenues, according to the study.
A smaller off-track betting facility with 150 machines would bring in gaming revenues of between $16 million and $18 million in 2022, with $1.1 million to $1.2 million in gaming taxes.
Councilman Larry Campbell asked about gambling addiction resulting from a gaming facility.
“It definitely needs to be considered as a negative impact for a community,” Fisher answered, adding his study does not address addiction.
Campbell also asked what the average salary would be at a casino in Danville. It would be about $37,000 a year for a full-time employee, Fisher said.
As for other sites for a casino, a large scale resort at the Schoolfield site would generate about $328.1 million in gross gaming revenues and create up to 2,140 jobs, while one at the retail corridor would bring in about $322.8 million and up to 2,106 jobs, according to the study.
Smaller, more moderate-scale casino facilities would generate about $239.3 million and $233.8 million in gross gaming revenues at Schoolfield and the retail corridor, respectively. Up to 1,515 jobs would be created at the Schoolfield site and up to 1,481 jobs at the retail corridor site.
At Schoolfield and the retail corridor, a large-scale facility would bring in about $4 million in local gaming tax revenue at each site, while a smaller project would generate almost $3 million in gaming tax money for the city.
Currently, the city has no nearby competition for drawing customers to a casino here, Fisher said.
“You have the market to yourself to draw from,” he said, adding most customers would come from North Carolina, especially from southeast. About three-quarters of gaming revenues would come from the Tarheel State, he said.
If North Carolina allowed the presence of casinos to expand in its state, that could pose a threat to Danville, Fisher pointed out. Revenue projections for a large casino resort in the city could drop by half if that were to happen, especially if casinos were to open in Greensboro and Raleigh-Durham, he said.