Biggest ED project in Danville Change the direction of the City
Work began in June of 2019 Summarize the process Lit Review Identify benchmarks Interviews in Danville and Benchmarks Model casino impacts Research social impacts
Neutral Expertise in impact assessment, feasibility studies
Understanding of economic and social systems
Virginia’s proposed statewide tax rate of 10 percent to 15 percent is significantly below what other states have enacted. Tax rate comes from proposed legislation SB 1706 The casinos and states examined for this report have state tax rates that range from 23 percent to nearly 47 percent.
Benchmark casinos have a range of revenues. We modeled multiple scenarios for total casino revenues. The low estimate of $55 million may reflect early operating years before the facility reaches full capacity. Or like the casinos in Monticello and St. Joseph, it may reflect the stabilized revenue over the long term based on competition from other facilities within and outside of Virginia. If a casino were to open in Danville, it is very likely to achieve the lower estimate, but it may be less likely to generate $315 million or more in gaming revenues.
Indiana Grand = Caesars, 2009 – racing at Indiana Downs in 2002 St. Jo = Affinity Gaming, 1994
Charles Town = Hollywood: 1996 Video Machine 2009 Table Games
Dubuque: Q casino = City owned, Diamond Jo is Boyd Gaming 1994 Diamond Jo 2005 Q Casino
JLARC - $190M $4.5M in non gaming taxes $0 in gaming taxes: but maybe 1% or $1.9M 1,582 Jobs
City: $363 M $4-$4.5M in gaming tax $4.8 - $5.4M in non gaming tax 2,377 Direct Jobs
From the study completed by the city http://www.danvilleva.gov/DocumentCenter/View/24826/Casino-Visitation-Revenue-and-Impact-Assessment-Convergence-Strategy-Group-11-19-19
A significant majority of the projected demand will come from North Carolina residents, including a large number of gamers that may come from market areas where a casino could reasonably be expected to be sited if casinos become permissible, given their large population bases (i.e. Raleigh-Durham and Greensboro). Based on adjustments to our demand models, we come to the following conclusions: • Gaming Revenue potential could decline by 45 to 50% for a destination-scale casino, or 37 to 42% for a moderate-scale casino; • Patronage could decline by 40 to 45% for a destination-scale casino, or 30 to 35% for moderate-scale casino.
JLARC: SB 1238 proposed setting the sports wagering age at 18 years old, while SB 1356, HB 2210 and HB 1638 proposed setting the age at 21 years old.
Where do the benefits flow? Where do the costs hit?
Pages 23-24 of the full report – real estate taxes & business personal property tax based estimate of $220 M to $264M Real estate alone = $200M to $220M
Diversion in on Page 24 of the full report Sales 35% to 75% RE 2% to 10%
Citation of the Crime study: Grinols, Earl and David Mustard. “Casinos, Crime, and Community Costs.” The MIT Press. 2006.
Citation of the Problem Gambling study: “Gambling Impact and Behavior Study.” National Opinion Research Center at the University of Chicago. 1999. http://www.norc.org/PDFs/publications/GIBSFinalReportApril1999.pdf
Grinols, Mustard and Dilley 2000 Grinols & Mustard 2006
We don't want to engage in a battle of studies. We looked at many studies and evidence on all sides of the argument and have determined what evidence we determined was the strongest. Critics have used case studies or selected samples to dispute the findings. In 20 years no critic has replicated the scale or time frame of this study. The National Center for Responsible Gaming (funded in part by casinos) has done no crime studies.
1.5% problem gambling, 1.2% pathological, total of 2.7%
Best practice is that the state manages these programs – so will VA set aside sufficient money.
JLARC: Studies in other states with broad legalized gaming (i.e., casinos) suggest that an estimated 5 percent to 10 percent of adults may experience gambling problems to some degree.
JLARC report proposed $4M statewide for problem gambling response
Development choices related to the location and the operator – what decisions they will make and how they partner with the community will determine the spillover benefits
Benchmark regions showed mixed impacts on spillovers
A casino is not a guaranteed cure for your economic ills.
There are many uncertainties about how successful the casino will be Will you get several million visitors Is a $300M or larger facility sustainable What happens if NC legalizes casinos
Most of the local tax benefit will come from non-gaming revenues VA is the big winner Crime and problem gambling may increase The jobs are good jobs, but still not living This is the biggest bet on Danville’s future We cannot predict what will happen, but we have looked at a range of positive and negative impacts so that you can understand the potential risks and rewards and determine which you think are most significant and most likely. Thank you!
What If Danville Gets a Casino? Risks, Rewards, Uncertainties
What if Danville gets a
December 4-5, 2019
A Review of the Risks, Rewards and Uncertainties
The Danville Regional Foundation
engaged Fourth Economy to
conduct a study of the economic
and social impacts of a potential
gambling and entertainment
complex on Danville and
DRF is taking no position on the Casino.
▰ Market Analysis to Identify
Gaps and Opportunities
▰ Highest and Best Use
▰ Project feasibility Analysis
▰ Opportunity Zone and
▰ Investment Criteria
▰ Economic Competitiveness
▰ Industry Analysis
▰ Sector Modeling
▰ Economic Impact Analysis
▰ Data Driven Initiative
▰ Business Planning
▰ Program Creation and
▰ Impact Assessment
At Fourth Economy We Create...
Jerry Paytas, Ph.D.
Vice President, Research &
Principal in Charge
Project Analyst - Economic
and Tax Impacts
Design & Marketing Manager
Joshua Devine, CEcD
Project Analyst - Social
▰ Key Findings
▰ Taxes and Revenues
▰ Job Creation
▰ Job Quality
▰ Development Impacts
▰ Social Impacts
Two potential state tax rates from proposed legislation (SB1706):
▰ 10 percent and 15 percent state gaming tax rate.
▰ Benchmark states ranged from 23 to nearly 47 percent.
Three scenarios for total casino revenues based on the experience
of casinos in a set of benchmark regions:
▰ Low Estimate: $50 million (Monticello NY, St. Joseph, MO)
▰ Mid Estimate: $150 million (Dubuque, IA)
▰ High Estimate: $300 million (Charles Town, WV)
Taxes and Revenues
Benchmark casinos and regions were chosen because they reflected
different operating conditions for a potential casino within regions that
shared some characteristics with Danville - a range of sizes,
demographics and market locations.
Shelbyville, IN St. Joseph, MO Monticello, NY Dubuque, IACharles Town, WV
Benchmark Casinos have pre-tax revenues of $30 million to $336 million.
Compared to Benchmark Communities, Danville:
▰ Has a population in the 100-mile draw area that is in the middle of the pack.
▰ Has a proposed state tax rate that is lower than all of the benchmarks.
Town, WV Dubuque, IA Danville, VA
Pre-Tax Net Gaming
Revenues of the Casino $276 M $43 M $30 M $336 M $117 M
Population within 100 miles 7.8 M 2.9 M 24 M 11.8 M 3 M 5.4 M
State Tax Rate
(Total State Casino Tax Revenue /
Statewide Pre-Tax Net Gaming Revenue)
27% 26% 44% 47% 23% 10 - 15%
How do the Benchmark communities compare?
Comparison of Assumptions
& Estimated Impacts
Revenue Assumptions Low High Bristol
Pre-Tax Net Gaming Revenue $50 M $300 M $600 M
Casino Non-Gaming Revenues $5 M $15 M $289.7 M
Casino Total Revenues $55 M $315 M $889.7 M
Visitor Assumptions Low High Bristol
Annual Visitors 180K - 367K 1- 2.1 M 4 M
Daily Visitors 500-1K 3K-6K 11K
Comparison of Impacts Low High Bristol
Total Direct Employment 575 3,050 5,426
Total Estimated Tax Revenue to Danville $3.2 M $9.1M $20.3M
will it be?
depend on the
spending and the
How Many Visitors?
Tourism Market Share
Gallup reports that 26
percent of Americans
visited a casino in the
Market shares of 26
percent or below are
Total Gaming and Non-Gaming
$55M $160M $315M
Estimated Market Share of Adult
$150 8% 24% 47%
$300 4% 12% 24%
Lower Risk Higher Risk
Danville’s casino will compete
with other VA casinos for the
in-state market and parts of
the NC market.
If the legislature sets the age
at 21, there will be a smaller
If NC legalizes casinos,
Danville could lose a
significant portion of its
market and revenues. Note: Adult Population = 18 years and older
Distribution of Benefits Low High
Virginia Gaming Taxes $2.5M $22.5M
Lynchburg Transportation District Gaming
Danville Gaming Taxes $625K $5.6M
Danville Other Taxes $2.6M $3.5M
Jobs 575 Jobs 3,050 Jobs
Aggregate Wages $12.7M $68.4M
How do the local taxes
Danville may get an effective
local tax rate of 1.3 to 1.9
percent of the pre-tax net gaming
revenues compared to an
average of 2 percent for the
benchmark host communities
(1.1 percent excluding non-tax
revenue for the Q Casino).
Local Effective Gaming Tax Rates
(Tax Revenue from Local Gaming / Pre-Tax Net Gaming
Revenues of the Casino)
City of Dubuque (+ other Q Casino revenues) 6.9%
St. Joseph, MO 2.2%
Danville (15% Tax Rate) 1.9%
Danville (10% Tax Rate) 1.3%
Shelbyville, IN 1.2%
Monticello, NY 1.0%
City of Dubuque (Tax Only) 0.5%
Charles Town, WV 0.3%
Average (excluding Danville) 2.0%
Note: The City of Dubuque owns the Q Casino and has non-tax
revenue as a result. Without the city revenue the average is 1.1%
Danville Non-Gaming Revenues
Related Non-Gaming Revenue Low High
Real Estate Tax $1,680,000 $1,848,000
Business Personal Property Tax $700,000 $1,540,000
Meals Tax $195,000 $585,000
Transient Lodging Tax $160,000 $480,000
Sales Tax to Danville $50,000 $150,000
Tax Diversion and Offset -$179,047 -$1,097,736
Subtotal Estimated Related Taxes for Danville $2,605,953 $3,505,264
Who Pays? Wages
Wages for Casino Jobs: National average wage is $15.75/hr, but ⅔ of the workers
earn less than $15/hr.
Workers would need to earn $24/hr for a living wage for one adult, one child
households. In Danville, 60 percent of children live in single parent households.
These workers will need access to quality, flexible child care.
Gambling jobs have higher average earnings for jobs with similar levels of training.
Workers in jobs that require similar levels of training will see increased wages.
Existing businesses may need to raise wages to compete for those workers.
National Wages by Occupation, 2018
3% Management $45.43 $94,500
2%All Other $27.01 $56,172
2% Business and Financial Operations $26.49 $55,090
4% Installation, Maintenance, and Repair $18.78 $39,060
11% Office and Administrative Support $15.90 $33,060
8% Protective Service $15.71 $32,680
2% Transportation and Material Moving $15.39 $32,010
Gaming Services Workers
Miscellaneous Entertainment Attendants
7% Building Cleaning and Maintenance $13.24 $27,540
10% Sales and Related $13.21 $27,480
21% Food Preparation and Serving $12.85 $26,730
⅔ of workers
⅓ of gaming
Source: Occupational Employment Statistics, Bureau of Labor Statistics - NAICS 713200 - Gambling Industries
The wages (or earnings) for the
new casino workers in Danville
will determine how much
opportunity these jobs provide
to the workers.
It will also influence whether
existing business may need to
raise wages to compete for
2018 Hourly Wages/Earnings
for Select Industries
Who pays? Crime Impacts
Crime: The most comprehensive (& only) national study found that 8 percent of
crime in casino counties was attributable to casinos. This study included all U.S.
counties from 1977 to 1996 and compared casino and non-casino counties.
▰ Critics have used case studies or selected samples to dispute the findings.
▰ In 20 years no critic has replicated the scale or time frame of this study.
▰ The National Center for Responsible Gaming (funded in part by casinos) has
done no crime studies.
▰ Adjusting the crime rate for visitors should be done for all visitor attractions,
but casinos are different because visitors may bring or leave with CASH!
Benchmark counties with casinos had an average of +765 property crimes and
+50 violent crimes per 100,000 residents versus other counties in their state.
Who pays? Problem Gambling
Problem Gambling: Problem gambling could impact 2,200 local residents at an
annual social cost of $1.3M in Danville and $1.9M in Pittsylvania.
▰ The annual social cost of problem gambling in Danville and Pittsylvania is
estimated at $3.2M.
▰ Problem Gambling costs are social costs. Social costs include productivity
losses, social services, and creditor losses.
▰ Social costs are not paid directly by the municipality, but are spread to
employers, social service providers, and individuals.
Factors that Drive the Impacts
What are the +/- Spillovers?
Casino is isolated and
Casino is embedded
Casino patrons are
Casino competes with
Casino provides limited
spillover benefits to
Casino patrons are not
Casino provides limited
spillover benefits to
Greatest potential for