Virginia Racing Commission hears comments on proposed historical racing regulations

The Virginia Racing Commission on Tuesday heard comments from more than three dozen people who asked to speak about the commission’s proposed regulations of gambling devices that could be in operation as early as next year at racing facilities in the state, according to the executive director of the commission.

The commission took public comment on the devices – known widely as historical racing machines – three weeks after it posted a proposed draft of the rules on its website. The rules largely address myriad technical issues related to the operation of the devices, which use the results of previously run horse races to generate payouts to winners, but they also place a statewide cap of 3,000 on the machines and tie the number of machines in operation to minimums for live racing dates at Colonial Downs, the shuttered racetrack that could reopen next year under new ownership.

Dave Lermond, the executive director of the commission, said that 37 people spoke in person about the regulations over the course of two hours, and that the commission had received “probably close to 100” written comments in advance of a midnight deadline on Tuesday. He declined to characterize the comments, in recognition of the wide variety of viewpoints that were presented.

“The commission was very pleased that so many people came to the meeting to express their comments and concerns,” Lermond said. “We look forward to assimilating those concerns into the rule-making process.”

The racing community supports the operation of the machines, which are expected to generate tens of millions of dollars in revenue for the owners of Colonial and prop up purses for future races at the track. However, a coalition of racing interests last week also pressed its members to push the commission to eliminate the statewide cap on the number of machines or give the racing commission the power to raise the cap in the future.

“The regulations as currently drafted will not get our industry the financial support we need to truly succeed over the long-term,” said a notice posted on the website of the coalition, the Virginia Equine Alliance. “We should have regulations that give the Virginia Racing Commission the discretion to allow for future growth to take place, based on independent market studies.”

In response to a direct question, Lermond said that several speakers affiliated with horseracing who made comments on Tuesday did raise concerns about the cap.

Jeb Hannum, the executive director of the Virginia Equine Alliance, which represents trainers, owners, and breeders of both Thoroughbreds and Standardbreds in the state, said that approximately two dozen of the speakers spoke in favor of the machines. He also that the “overwhelming majority” of those speakers also supported the call from the VEA to eliminate both the statewide cap and caps on the numbers of machines that can be placed in counties based on population, which he called “arbitrary numbers.”

“We tried to get across that the cost side of racing continues to go up, so that it makes no sense to restrict the revenue side,” Hannum said. “The messaging was very consistent.”

Hannum said that individuals who spoke in favor of the VEA’s message included horsemen and local government officials

After passing on legislation to expand gambling at Colonial for a decade, the legislature abruptly reversed course this year and overwhelmingly passed a bill authorizing the devices at Colonial and at as many as 10 off-track-betting locations in the state that will be operated by the track’s owner. Prior to the legislature convening, the new owners of the track, a Chicago-based partnership called Revolutionary Racing, reached a deal to buy the track from its previous owner, Jacobs Entertainment, provided the legislature legalized the devices.

The regulations are being adopted as emergency rules, with a goal of having the regulations formally in place by the end of the year. As a result, the commission is not going through the normal rule-making process, which would have mandated several defined periods for public comments.

When signing the bill authorizing the machines, Virginia Gov. Ralph Northam directed the commission to involve local communities in the rule-making process, and he also said that the commission should place “reasonable limits” on the machines. Lermond said that the commission had those directives in mind when drafting the first iteration of the rules, and that commission members will now review all the public comments before beginning the process to revise the regulations over the next several months.