In a special work session meeting Tuesday night, Danville City Council heard results from a casino impact study by Convergence Strategy Group.
Scott Fisher, and partner Suzanne Perilloux Leckert, with the Convergence Strategy Group have been working with the city for months, assisting them with the process of examining the potential impacts of having casino operations in Danville.
“We have a role and responsibility to make sure that should it happen, that it gets implemented in the most effective way possible,” City Manager Ken Larking said. “That’s why we have this group to help us out.”
The New Orleans-based group has more than 35 years of experience in analytical and strategic planning services to gaming, leisure, commercial, tribal and public agencies.
“[We were hired] to help the city overall in understanding the pros and cons, what the impact should be, what kind of tax would be generated, what kind of jobs would be generated…,” Fisher said.
When looking at impacts, the group examined four different possible sites for a casino, including the White Mill, Schoolfield, an unspecified highway site, and one in a retail corridor, such as Piedmont Drive.
They also examined two specific sizes for possible casinos. A destination resort scale casino would include 2,500 slot machines, 100 game tables, approximately 325 hotel rooms, and multiple food and beverage opportunities and resort amenities.
A moderate scale casino would include 1,200 slots machines, 60 game tables, approximately 225 hotel rooms, food and beverage options and limited amenities.
“One thing that was emphasized to us when we first started looking at this with Mr. Larking was that we wanted something that the city would be proud of, so not just a box with slots or tables, something that would draw people from afar,” Fisher said.
Projections for the gross gaming revenues, tax revenues, jobs and payroll were all contingent upon the type of and the location of the potential casino. Those numbers were as follows:
Gross gaming revenues: $233.8 million - $363.5 million
Direct jobs: 1,442 - 2,377 full time employees
Payroll: $47.5 - $75.7 million
Gaming taxes: $2.9 - $4.5 million
City sales tax: $416 - $730 thousand
Hotel tax: $926 thousand - $1.8 million
Meals tax: $1.7 - $2.9 million
The highest projected gross gaming revenues numbers would come from a destination resort-scale casino located on a highway site, while the lowest revenues were projected for a moderate casino in a retail corridor.
The city could expect to receive 1.25-percent of casino gross gaming revenue as tax revenue, which would equate to $4 million to $4.5 million in taxes annually for a resort-scale casino and $2.9 million to $2.5 million for a moderate-scale casino.
Fisher explained that local market projections were made by looking at populations, income levels, competition, drive times and behavior patterns.
In looking at the region, the group compared the distance of a potential casino in Danville to other potential and existing ones within a two-hour distance to measure competition. They also looked at demographics and gaming participation incides.
Fisher said that Danville would have the casino monopoly in their location, but it would be located in an area that is less likely to visit a casino.
The group also looked at the rates that casino visitors would spend money outside of the casino and out in the city. The most spending within the city would occur in a casino location along the retail corridor, while a highway location would bring in the least.
For socioeconomic impacts, the group did primary research interviews with local officials in 12 casino sites, including Dubuque, Iowa, Monticello, New York, and Metropolis, Illinois, to gain a before and after perspective for effects of casinos.
“The result was pretty universal that the impacts were not felt,” Fisher said. “...From a crime perspective, there were no impacts on jails whatsoever.”
Fisher said that North Carolina would post a significant threat if the state authorized casino gaming and facilities opened in both Raleigh-Durham and Greensboro. The potential revenue could decline by as much as half the company forecasted due to the proximity of those locations to Danville, especially since the main source of gaming revenues for a destination resort casino on the highway location are projected to come from North Carolina.
The company also came up with a historical horse-racing (HHR) model, which consisted of two alternative scenarios, one for a 600-device HHR facility and the other for a 150-device HHR facility.
Revenue results for a 650-device facility would be $58 million in annual gaming win, while a 150-device facility would bring in $17 million in annual gaming win.
The city would receive approximately 6.75-percent of HHR machine revenues, which would amount to $4.0 million in city gaming tax for 600 devices and $1.15 million for 150 devices.
The Convergence Strategy Group will continue to work with the city throughout the next few months and possibly through the next election cycle, as the Virginia General Assembly still has to revisit the casino gaming issue in their 2020 session. If it passes through the General Assembly, a referendum would be needed by localities to allow casinos.
In their business session, city council approved the acceptance of a parcel of land from the Industrial Development Authority for the proposed Riverfront Park off of Memorial Drive.
They also approved budget appropriation ordinances to include three highway safety grants acquired by the Danville Police Department.