Petersburg’s pick of Cordish Companies to build Virginia’s fifth retail casino has raised concerns among lawmakers and stakeholders. After the city selected the $1.4 billion project over four others, questions arose regarding the integrity of the selection process and the speed with which the decision was made. Cordish gaining market access to Virginia may also be worrisome to anyone who’d like to see online casinos legalized eventually. It is perhaps the most vociferous opponent of iGaming expansion among retail casino companies.
Many were surprised when the City Council chose Cordish Companies. The decision was made during a closed-door meeting on April 24 and took only 90 minutes. Council members had given no indication that they planned to make a final decision during the meeting and refused to answer reporters’ questions about it.
Virginia passed legislation authorizing five commercial casinos in 2020. However, only four licenses were initially awarded because Richmond voters refused to allow a casino in their community. Petersburg was eventually selected as a potential alternative, but that won’t be final until its residents have their say in a November referendum.
Five companies expressed interest in the Petersburg license. The competing bidders included Rush Street Gaming, looking to open its second Virginia property after Rivers Portsmouth, the first of the state’s casinos to open its permanent facility. The others were Bally’s, Penn Entertainment, and Warrenton Group.
Questions Swirl About Selections Process
The speed and secrecy of the decision aren’t the only aspects of the situation that have raised red flags.
The decision also seems to go against previous indications from the city. A report by the Virginia Mercury revealed that Petersburg City Manager John Altman Jr. had signed—but never sent—a letter addressed to Bally’s Senior Vice President Christopher Jewett, promising that his company was the frontrunner in the selection process.
That letter is controversial in its own right. City officials claim Altman signed the letter only because lawmakers in the General Assembly threatened to kill the project without such assurance.
Union Supports Bally’s, Opposes Cordish
Those lawmakers may, in turn, have been responding to pressure from Unite Here, a hospitality worker’s union that has a good relationship with Bally’s and a poor one with Cordish. Maintaining union support was important for some Democratic lawmakers in the Assembly and may have been a deciding factor in their vote.
Lawmakers also wanted to attach a provision requiring them to approve the project a second time after seeing the choice of operator. However, the legislature and Gov. Glenn Youngkin agreed to remove the provision, giving Petersburg more freedom in its selection. Revitalizing the majority-black city has been a project for the governor.
State Sen. Lashrecse Aird, D-Petersburg, sponsored the General Assembly bill to replace Richmond with Petersburg. She was sharply critical of the city council’s decision to go with Cordish. Aird had seen Altman’s letter and expected Bally’s to receive the license. She said Bally’s has a better relationship with the union in representing future casino workers.
Unite Here supported the Petersburg casino bid and endorsed and sponsored Aird in her election campaign. The union has clashed with Cordish in the past. That’s partly because Cordish had a relationship with another union, Seafarers Entertainment & Allied Trades Union.
Unite Here has said it will sue Petersburg for the lack of transparency in its selection process, saying the closed-door meeting violated state law.
Cordish Pick Could Be Bad News For iGaming
A Cordish casino in Petersburg will be bad news for those hoping that Virginia’s retail casinos would pave the way for online ones. Success for online casino bills is heavily dependent on getting unanimous support from any retail operators in the state.
In neighboring Maryland, Cordish was among the fiercest opponents of iGaming expansion. That may seem surprising, as it already operates in the space through its PlayLive! brand, which has an online casino in Pennsylvania. Mark Stewart, the company’s general counsel and senior vice president, told lawmakers that PlayLive! would seek a license in the state if iGaming were legalized but would prefer that it not be.
During the East Coast Gaming Congress in Atlantic City, CEO David Cordish explained his reasons for disliking online casinos. He said he inherited his worries from the late Sheldon Adelson, with whom he was friendly. He also believes Amazon will eventually enter the gambling space and crush existing operators. Cordish Gaming Group President Rob Norton used the company’s experience with sports betting at Maryland Live! as a case study in cannibalization. He said that the retail sports betting launch caused an increase in casino visitation but that retail sports revenue plummeted after online betting launched.
Research is split on the issue of cannibalization. While online casino opponents have found studies to support their claims, many other reports suggest otherwise. Other industry leaders who operate omni-channel brands also disagree.
The validity of his reasoning notwithstanding, Cordish appears unlikely to change his mind about online casinos any time soon. A Virginia casino for his company essentially guarantees one more opponent in the state for any future iGaming legislation effort.
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