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Historical Horse Racing [under development] [11 VAC 10 ‑ 47]
Action To Promulgate Regulations Pertaining to Historical Horse Racing
Stage NOIRA
Comment Period Ends 3/20/2019
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3/6/19  3:24 pm
Commenter:  

Interesting
 

Will there be anymore information available concerning this?

Timothy Sumer


3/7/19  11:43 am
Commenter: Richard Peters, Town of Vinton

Support for HHR
 

On behalf of the Town of Vinton, please accept these comments regarding the final draft regulations for Historical Horse Racing terminals.

The Town of Vinton is a community of approximately 8,100 residents and is located within the Roanoke Metropolitan Statistical Area with a population over 300,000. In 2003, the citizens of Vinton voted by referendum to allow Off-Track betting within the Town limits and Town Council followed suit by including such facilities within the zoning regulations of our Town Code in 2004.

Our Town Council and administration has expressed enthusiastic support for Historical Horse Racing by unanimously passing a Resolution of Support on September 4, 2018 to authorize the return of OTB and the use of HHR terminals within the Town of Vinton.

However, the regulations as currently written fall short of allowing our citizens and our community to realize the full positive impact that the return of horse racing and the allowance of HHR would provide for SW Virginia, and will certainly limit the positive financial benefit on our small Town within the Roanoke Region.

By unnecessarily limiting the number of HHR terminals based on population alone, this cap will greatly diminish a valuable opportunity to allow us to expand employment opportunities and generate much needed revenue to provide services for our residents of Vinton and guests to our community.

On behalf of the Town of Vinton and the Greater Roanoke Region, our strong recommendation is to remove from the regulations the constraint of limiting the number terminals based on a boundary population alone and allow the decision of the number of terminals to be based on the Roanoke MSA Population, as a better indicator of market demand.

Thank you for considering the Town of Vinton’s input.

Best regards,

Richard "Pete" Peters, Assistant Town Manager


3/7/19  4:43 pm
Commenter: Justin Davison, Vinton Area Chamber of Commerce

Town of Vinton, Rosies, Colonial Downs, # of terminals is less than what the population should have
 

The Town of Vinton is a community of approximately 3 square miles and a population of 8,100 residents, although is located within the Roanoke Metropolitan Statistical Area with a population of over 300,000.

We at the Vinton Area Chamber of Commerce is excited for the return as well. The Roanoke Metropolitan are should be considered when putting in the historical machines as so many of these folks will venture through Vinton. I feel like this also will allow for a greater economic impact as well as create more jobs and spending. I am excited for the return and look to be there opening day.


3/13/19  11:44 am
Commenter: Chris Linkous

In support of the Town of Vinton for additional Historical Horse Racing terminals
 

On behalf (In Support) of the Town of Vinton, please accept these comments regarding the final draft regulations for the Historical Horse Racing terminals.

The Town of Vinton is a community of approximately 3 square miles and a population of 8,100 residents, although is located within the Roanoke Metropolitan Statistical Area with a population of over 300,000.

The Vinton Town Council recently expressed enthusiastic support for the return of horse racing to the Commonwealth by unanimously passing a Resolution on September 4, 2018 to authorize the return of an Off Track Betting Facility to the Town and to support the addition of the HHR terminals.

However, the regulations as currently written fall short of allowing Vinton to realize the full positive impact by unnecessarily limiting the number of HHR terminals based on the Town's population alone. The current cap of 150 terminals will unnecessarily diminish a valuable opportunity to encourage the expansion of employment opportunities and help generate much needed revenue to provide services for Vinton residents and guests to the community.

Please consider removing the constraint of limiting the number of terminals based on the Town's geographic boundary population and instead, allow the number of terminals to be based on the market's full potential and determined by the Roanoke MSA's population.


3/14/19  3:04 pm
Commenter: Jill Loope, Roanoke County Economic Development

Historic Horse Racing Terminal Regulations
 

 

In support of the Town of Vinton, please accept these comments regarding the final draft regulations for the Historical Horse Racing terminals.

The Town of Vinton is located in Roanoke County and is a community of approximately 3 square miles  with a population of 8,100 residents.  The Town is located within the Roanoke Metropolitan Statistical Area, with a population of over 300,000.

 

The Vinton Town Council recently expressed enthusiastic support for the return of horse racing to the Commonwealth by unanimously passing a Resolution on September 4, 2018 to authorize the return of an Off Track Betting Facility to the Town and to support the addition of the HHR terminals.

 

However, the regulations as currently written fall short of allowing Vinton to realize the full positive impact by unnecessarily limiting the number of HHR terminals based on the Town's population alone. The current cap of 150 terminals will unnecessarily diminish a valuable opportunity to encourage the expansion of employment opportunities and help generate much needed revenue to provide services for Vinton residents and visitors to the community.

 

Please consider removing the constraint of limiting the number of terminals based on the Town's geographic boundary and population and instead, allow the number of terminals to be based on the market's full potential and determined by the Roanoke MSA's population.

Thank you for your consideration of this request.

Respectfully,

Jill Loope, DIrector of Economic Development

 

 


3/15/19  1:48 pm
Commenter: Beth Doughty, Roanoke Regional Partnership

Historic Horse Racing Terminal Regulations
 

In Support of the Town of Vinton, please accept these comments regarding the final draft regulations for the Historical Horse Racing terminals.

The Town of Vinton is a community of approximately 3 square miles and a population of 8,100 residents; however, the townis located in the midst of the Roanoke Metropolitan Statistical Area with a population of over 300,000.  

The Vinton Town Council recently expressed enthusiastic support for the return of horse racing to the Commonwealth by unanimously passing a Resolution on September 4, 2018 to authorize the return of an Off Track Betting Facility to the Town and to support the addition of the HHR terminals.

However, the regulations as currently written fall short of allowing Vinton to realize the full positive impact by unnecessarily limiting the number of HHR terminals based on the Town's population alone. The current cap of 150 terminals will unnecessarily diminish a valuable opportunity to encourage the expansion of employment opportunities and help generate much needed revenue to provide services for Vinton residents and guests to the community. The metropolitan area population is a more accurate representation of the market served by this facility.

Please consider removing the constraint of limiting the number of terminals based on the Town's geographic boundary population and instead, allow the number of terminals to be based on the market's full potential and determined by the Roanoke MSA's population. 

 


3/20/19  11:39 am
Commenter: Joyce Waugh, Roanoke Regional Chamber

Off Track Betting - Town of Vinton
 

Dear SIr or Madam,

We'd like to express our support for lifting the current cap (150) on the number of terminals that would be permitted in the Town of Vinton, which we understand is due to the town's population alone. The Off Track facility will serve the broader Roanoke Valley MSA which enjoys a population of over 300,000.

This regulatory change would indeed permit the Vinton facility to better serve the broader population. In addition, the related jobs and investment are important to the broader region.

Thank you for your consideration of allowing the broader MSA population to serve as the basis for lifting the current cap on the number of terminals the Vinton facility may have.

Sincerely,

Joyce Waugh


3/20/19  3:12 pm
Commenter: John Hannum, Virginia Equine Alliance

Virginia Equine Alliance Comments on Historical Horse Racing Permanent Regulations
 

Introduction

                The Virginia Equine Alliance (VEA) is the "nonprofit industry stakeholder organization" statutorily recognized by the Virginia Racing Commission ("the Commission"). Va.Code 59.1-392.1 (1). It is comprised of the the Virginia Horsemen’s Benevolent & Protective Association (owners and trainers), the Virginia Thoroughbred Association (breeders), the Virginia Harness Horse Association (owners, trainers, and breeders), and the Virginia Gold Cup Association (steeplechasers).  VEA's mission is to sustain, promote, and expand the state's horse industry, including breeding and horse racing.

                According to the American Horse Council's recent study the horse industry directly contributes over $1.34 billion to Virginia's economy, along with 29,232 jobs. Adding the indirect and induced economic ripple effects results in an estimated total contribution of $2 billion to Virginia's economy. See, Economic Impact of the Horse Industry in Virginia, American Horse Council, p. 3 (2018).

               VEA was formed in 2014 because the horse racing and breeding sector of the industry became moribund with the closing of Colonial Downs, Virginia's only track for thoroughbred and standard bred racing with pari-mutuel wagering. Drawing on limited financial resources generated by revenue from on-line wagering on out of state races, VEA and its member organizations were able to: (1) revive harness racing in Virginia, with the cooperation of the Shenandoah County Fair, by spending more than a million dollars to rebuild the fairgrounds track in Woodstock, Virginia to facilitate Fall race meets; (2) stimulate breeding in Virginia by setting up a bonus program for owners of Virginia bred and Virginia certified horses winning races in six neighboring states, which to date has paid out over $1.5 million in bonus money and brought about 1500 new horses to the state; and, (3) build and operate four satellite wagering facilities in Richmond, Chesapeake, and Collinsville (Henry County).

                However, until last year VEA was stymied in its attempt to revive thoroughbred racing, the heart of the industry, because there was no suitable racing venue other than the shuttered Colonial Downs. Fortunately, the Colonial Downs Group of investors (“Colonial”) came along, and in April 2018 bought Colonial Downs.  That purchase was preceded by months of discussions between VEA, its member organizations, and Colonial, which included a consensus on hosting as soon as possible fifteen to thirty days of quality thoroughbred racing at Colonial Downs.

                All parties, as well as the Commission, understood that goal was not attainable without a new revenue source called “historical horse racing.” Specifically, the Commission formally adopted the December 2017 report of its Strategic Planning Committee that concluded:

In today’s economic environment, live racing is not self-sustaining. Thus, developing HHR . . . is vitally important to securing the long-term future of flat-track racing in Virginia. HHR revenue . . . is needed to substantially supplement a flat track’s considerable operational costs and ensure purse levels that are competitive with neighboring states. . . . if HHR is not developed in Virginia it is doubtful that Virginia’s horse racing industry will ever be competitive with Maryland, Pennsylvania, or Delaware; on the contrary, Virginia’s horse-racing industry, without HHR, will remain an also ran.

See, Virginia Horse Racing Industry Strategic Plan, December 2017, pp. 12-13,        www.vrc.virginia.gov.

              Indeed, experience at the old Colonial Downs showed revenue based on live racing and traditional simulcast wagering at satellite facilities was not sufficient to finance quality racing in Virginia that was competitive in the Mid-Atlantic region. For that reason, VEA strongly supported passage of HB 1609, which created the potential for life saving revenue by authorizing use of historical horse racing terminals.

Upon signing HB 1609, Governor Northam in his Executive Directive to the Commission accompanying HB 1609 noted:

“ . . . Virginians have been breeding and racing thoroughbreds for hundreds of years, and it is an important part of our economy. . . . Without a major thoroughbred track in the state where Virginia-bred horses can race, and without a source of revenue to support the industry, it will be difficult for Virginia to once again be a place where the horse industry can thrive.

See, Governor’s Executive Directive I (2018), Directing the Virginia Racing Commission Regarding Regulations Related to Historic Horse Racing Pursuant to House Bill 1609.

                After enactment of HB 1609 redevelopment of Colonial Downs began in earnest. To date the new owners have spent $150 million in rebuilding and refurbishing the race track and  related facilities, as well as developing new satellite wagering sites in Richmond, Vinton, Hampton, and Chesapeake. When complete the total cost of renovation and renewal will be $300 million.

                Under its horsemen's contract with the Virginia HBPA, and with the Commission's approval, Colonial will host a 15 day thoroughbred race meet this year from August 8th through September 7th, with purses totaling $7.5 million. Next year the meet expands to 30 race days with purses projected to be in excess of $15 million. That will make Virginia racing very competitive with the racing product offered in Maryland, Delaware, Pennsylvania, West Virginia, and New Jersey. But all the foregoing is premised on successful implementation of historical horse racing.

Comments on the Proposed Historical Horse Racing Regulations

                VEA commends the Commission for its work in bringing horse racing back to Virginia.  Without its assistance VEA's efforts would have come naught. We now respectfully request the Commission's continued help in launching and sustaining thoroughbred racing in 2019 and beyond.

                The Commission's "Final Draft of Historical Horse Racing Regulations ("the Draft")," dated September 19, 2018, is a step in the right direction. The Draft implements HB 1609 by establishing rules for the use of historical horse racing ("hhr") terminals at the track and at satellite wagering facilities. However, VEA proposes modifying the regulations in one respect. The Draft places a hard cap on the number of hhr terminals that may be placed at the race track and its satellite wagering facilities. See, 11VAC10-47-180 (7) ("In no circumstance shall the combined statewide total number of historical horse racing terminals located at satellite facilities and significant infrastructure facilities exceed 3,000."). We submit the Commission must have discretion to increase that number, if necessary, to generate additional revenue to promote, sustain, and expand the state's horse industry.

                Specifically, 11VAC10-47-180 (7) should be modified by adding a final clause  to the one sentence paragraph (7) so it reads:  (7) "In no circumstance shall the combined statewide total number of historical horse racing terminals located at satellite facilities and significant infrastructure facilities exceed 3,000 unless the Commission determines that an increase is necessary to generate revenue to promote, sustain, and expand the Commonwealth's horse industry.

                Based on its financial projections VEA believes a 3000 terminal cap may not produce sufficient revenue to sustain 30 days of thoroughbred racing beyond 2020. And it most likely will not yield enough revenue to support 30 race days and fund the expanded breeding and certification programs that have begun with such promise by bringing hundreds of new horses to Virginia. Nor will it support the need to expand harness racing beyond 10 days of racing in the Fall at Shenandoah Downs. And finally, Virginia's steeplechase race venues, highlighted by the Virginia Gold Cup, will require additional funds to support purses and offset operational expenses.

                In short, the Commission must be accorded reasonable discretion to fulfill its statutory mandate to assist in the "promotion, sustenance, and growth of a native industry" when circumstances change. Va.Code 59.1-364 (A).

                                                                                                                           

Respectfully submitted,

John B. Hannum III

Executive Director

Virginia Equine Alliance

March 20, 2019                 

 


3/20/19  4:53 pm
Commenter: Ken Larking

Increase State and Locality Limits on HHR Machines
 

Good afternoon:

I am writing on behalf of the City of Danville. 

I would like to make the Commission aware of our desire to have the limit on the number of Historic Horse Racing (HHR) machines lifted. It is our belief that the City of Danville could host well above the current cap of 150 games. Our location on the Southern border of Virginia within an hour drive of highly populated areas in North Carolina make Danville ideally situated to attract many visitors to our community. We believe that HHR would help the local economy by bringing visitors to our City while also providing significant revenue to help revitalize live horse racing at Colonial Downs and Virginia. 

The City would use local revenue generated by this project to help fund K-12 education. A recent study by the National Resource Network indicated that there is a significant five year funding gap that needs to be addressed to maintain basic services and provide our school system with the funds they need to adequately educate a challenging population. The study showed that Danville needs to increase school funding by $4.2 million per year in order to reach the average of our peer cities funding per pupil. This equates to about a 25% total increase over current funding and would require about a 19 cent tax increase. As you might expect, an increase in taxes of this size is not realistically or politically viable. 

What additional steps would we need to make as a community to advocate for 1,200 (HHR) machines in Danville?

Thanks for your consideration. 

Sincerely,

 

Ken


3/20/19  7:50 pm
Commenter: Keith C. Rogers, Jr.

Support of HHR
 

On behalf of the Town of Dumfries, please accept these comments regarding the final draft regulations for the Historical Horse Racing (HHR) terminals.

The Town of Dumfries is a town in Prince William County which is a part of the northern Virginia/DC Metro Area. While the population of the Town of Dumfries is only 5,230, it is approximately 1.54 square miles of the larger Prince William County with a population of 463,023 and the Washington DC Metro Area comprising over 6.2 million residents.

We are aware of the return of the equestrian industry to the Commonwealth of Virginia and are interested in participating in this trade. The presence of an Off-Track Betting Facility in the Town of Dumfries would bring aspects of historical horse racing to northern Virginia.

The current population-based machine tier regulations make the participation of smaller localities such as the Town of Dumfries problematic. The Town comprises a small area within a much larger population center. The rules, as currently written with a machine cap prove inadequate to allow the Town of Dumfries, its citizens, and the broader community to realize the full positive impact of such a facility by unnecessarily limiting the number of HHR terminals based exclusively on the Town’s population. The current cap of 150 terminals will unreasonably restrict a valuable opportunity for the Town to encourage broader economic development, expand employment opportunities, and generate desired revenue to provide services for residents in the Town, guests, and the broader community.

It is our hope that the Virginia Racing Commission will alter this regulation to allow the Town of Dumfries and other interested localities to have the opportunity to fully participate in this industry and take full advantage of the return of HHR and the economic and broader development and enrichment that it can bring. Please consider removing the restrictive limitation on the number of terminals based on the Town’s geographic boundary and rather consider the regional market to dictate the number of permitted terminals.

Creating jobs and additional revenue through economic development is a top priority for the Town. This opportunity is directly aligned with our priorities and can serve as a catalyst for future development.

Thank you in advance for your careful consideration.

Respectfully,
Keith C. Rogers Jr.
Town Manager


3/20/19  10:57 pm
Commenter: Arthur Watson, Castle Hill Gaming

Encourage competition and increase the cap on HHR machines
 

 

Castle Hill Gaming, the only Virginia-based manufacturer of Historical Horse Racing (“HHR”) gaming machines and a company with deep ties to the equine industry, submits the following comments to the Commission’s Historical Horse Racing Regulations (the “Regulations”).

1.The Commission should pass regulations to encourage variation and competition in HHR machines, to the benefit of consumers.

Allowing only few or even one gaming manufacturer to supply HHR machines would be bad for Virginia—for all the reasons that monopolies are disfavored. A concentrated market for HHR machines in Virginia would restrict consumer choice, make it more expensive for consumers (as explained below), and give the market leaders an enormous amount of power over this new industry. By contrast, ensuring multiple gaming manufacturers have the opportunity to participate in this market will give the Commonwealth a diverse range of gaming options for its customers to enjoy, thereby attracting more customers, which will in turn bring in more revenue to the licensee, the equine industry, and the Commonwealth.

Other jurisdictions understand this and have mandated healthy competition between suppliers of gaming machines. For example, the Oklahoma Horse Racing Act spells out the specific “intent and policy of the Legislature that the standards for the games provided in this act shall operate so as to permit a large number of potential vendors to compete to furnish [gaming] devices.” See 3A Okla. Stat. §3A-268(B) (2018) (emphasis added). Oklahoma goes further to state that if any standards for games “serve to limit competition, the [Oklahoma Horse Racing] Commission is authorized to adopt rules modifying such standards so as to encourage competition.” See id. (emphasis added).

Similarly, the United States Congress has passed legislation mandating competition for manufacturers of Bingo-based gaming machines operated on Indian reservations. This legislation effectively limits any one vendor of gaming machines to no more than 30% of the net revenue from any one facility (or 40% in special circumstances approved by the National Indian Gaming Commission). See 25 U.S.C. §2711. 

Allowing a market leader to provide most or all of the HHR machines on the floor at both track and off-track betting facilities would give that vendor a significant degree of control over the management and operation of the casino, the express risk federal legislation safeguards against for Bingo-based gaming machines on Indian reservations. 

If a market leader controls a large amount of the floor for HHR machines in Virginia, much less the entire floor, it could lower the turnover of products to newer games, both because the monopolist manufacturer has less incentive to find the best-performing games and because the track may be unwilling to risk upsetting their key provider. Revenue would be further limited—to the Commonwealth and the equine industry—because players tire of machines, and there would be no incentive for an exclusive vendor to keep up with the rapid pace of new machine development. There is significant variance in the popularity of games, both in general and over time.

For these reasons, the Commission should pass regulations that require use of multiple gaming manufacturers, such as requiring that no one manufacturer have more than 30% of the gaming machines at any one facility, although it would be improper to impact current ownership.

2.The Commission should increase the number of HHR machines.

We echo comments from other stakeholders requesting that the Commission increase the proposed limit of HHR terminals from 3,000 (11VAC10-47-180). This limit needs to be raised in order for the horse racing and gaming industry to be viable as horse racing tracks and off-track betting facilities begin to open. The 3,000 limit restricts business opportunities for suppliers, the licensee, and the Virginia equine industry as a whole. 

We recommend raising the cap by 1,000 a year, up to a total of 3,000 new machines. Effectively, this would allow for 3,000 machines now, 1,000 more in 2020, 1,000 more in 2021, 1,000 more in 2022 for a total of 6,000. By raising the limit of HHR terminals, the Commonwealth will also have an opportunity for increased revenue. 

Respectfully,

Arthur A. Watson III

About Castle Hill

Castle Hill Gaming is the only Virginia-based manufacturer of HHR gaming machines. Founded by members of the same management team who founded pioneering game developer Kesmai and the Charlottesville division of gaming manufacturer Video Gaming Technologies, Castle Hill continues to make its home in Charlottesville. Castle Hill has over 100 gaming titles, and it employs nearly 50 people.

In addition to its broad expertise in the gaming industry, Castle Hill also has deep ties to the equine industry. Two of its board members are owners, breeders, and trainers at farms in Albemarle County as well as members and former Board members of the Virginia Thoroughbred Association.