Senate passes bill to allow Colonial Downs to operate gambling machines

The Virginia Senate on Wednesday passed a bill that will allow the owner of Colonial Downs to operate devices closely resembling slot machines throughout the state, a move that will likely lead to the re-opening of the track for live racing, according to racing officials.

The full Senate passed the bill by a vote of 31-9, sending the legislation to the desk of Gov. Ralph Northam, a Democrat who took office in January. The state’s General Assembly had previously passed the bill by a vote of 79-21.

The legislation will allow the owner of Colonial Downs to operate so-called historical horse racing machines at the racetrack and at as many as 10 offtrack betting locations by defining the type of gambling done on the devices as parimutuel wagering. In effect, it gives the owner of Colonial, which last ran a race meet in 2013, a monopoly on the operation of the devices in a state where horse race wagering and the lottery are the only legal forms of gambling.

The present owner of Colonial Downs, Jacobs Entertainment, forfeited the track’s license in 2014 after failing to resolve a dispute with horsemen over the proper length of a race meet. Jacobs had long lobbied for legislation to operate slot machines, but the company encountered consistent resistance from the legislature, largely led by the former speaker of the General Assembly, who retired last year.

According to Virginia racing officials, Jacobs Entertainment has a deal to sell the track to a Chicago-based company calling itself Revolutionary Racing provided the legislation is passed. Revolutionary Racing is led by a former gambling lobbyist, Larry Lucas, and Prentice Salter. The company has previously attempted to market an application allowing players to bet on their mobile devices. Lucas also was a former chairman of the account-wagering company Youbet.com, which was sold to Churchill Downs Inc. in 2009.

Horsemen in the state rallied behind the bill under the belief that revenues from the machines will be used to prop up purses at a re-opened Colonial Downs. The legislation does not specify the amount of machines that will be authorized, leaving that up to the state’s racing commission, which had also supported the bill.

The Virginia Equine Alliance, an umbrella horsemen’s group formed that currently operates three OTBs in the state under a law passed in 2015, has a “memorandum of understanding” with Revolutionary Racing to share in some of the revenues from the machines, according to its executive director, Jeb Hannum.

It is not clear when Colonial Downs might reopen for live racing, but Hannum had previously said that the track could hold a live race meet later this year. When the track was open, it held summer race meets that formed a circuit with nearby Maryland tracks.

“The Virginia Equine Alliance is looking forward to working with the Revolutionary Racing team to bring back first-class flat racing to the Commonwealth,” said Hannum in a statement.

Historical horse racing machines have proved lucrative at tracks in Arkansas and Kentucky, generating millions of dollars annually for the track owners.