A study commissioned by Danville Regional Foundation in Danville, VA to review the potential impacts of a proposed casino entertainment complex by Fourth Economy Consulting.

1. What if Danville gets a
Casino?
December 4-5, 2019
A Review of the Risks, Rewards and Uncertainties

2. About
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
surrounding communities.
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DRF is taking no position on the Casino.

3. Great Communities
▰ Market Analysis to Identify
Gaps and Opportunities
▰ Highest and Best Use
Studies
▰ Project feasibility Analysis
▰ Opportunity Zone and
Investment Prospectus
Development
Strong Economies
▰ Investment Criteria
Development
▰ Economic Competitiveness
Strategy
▰ Industry Analysis
▰ Sector Modeling
▰ Economic Impact Analysis
Impactful Organizations
▰ Data Driven Initiative
Development
▰ Business Planning
▰ Program Creation and
Evaluation
▰ Impact Assessment
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4. Project Team
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Jerry Paytas, Ph.D.
Vice President, Research &
Analytics
Principal in Charge
Chris Worley
Consulting Analyst
Project Analyst - Economic
and Tax Impacts
Monica Hershberger
Design & Marketing Manager
Design and
Communications
Joshua Devine, CEcD
Economic Opportunity
Strategist
Project Analyst - Social
Impacts

5. Agenda
▰ Assumptions
▰ Key Findings
▰ Taxes and Revenues
▰ Job Creation
▰ Job Quality
▰ Development Impacts
▰ Tourism
▰ Social Impacts
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6. 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)
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Assumptions
Taxes and Revenues

7. 7
Assumptions
Benchmark Communities
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

8. 8
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.
Shelbyville, IN
St. Joseph,
MO
Monticello,
NY
Charles
Town, WV Dubuque, IA Danville, VA
Pre-Tax Net Gaming
Revenues of the Casino $276 M $43 M $30 M $336 M $117 M
$50 M-
$300 M
(Estimated)
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%
(Proposed)
How do the Benchmark communities compare?

9. 9
Assumptions
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
How successful
will it be?
Revenues will
depend on the
number of
visitors, their
spending and the
tax rate.

10. How Many Visitors?
Tourism Market Share
Gallup reports that 26
percent of Americans
visited a casino in the
past year.
Market shares of 26
percent or below are
more feasible.
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Spending per
Visit
Total Gaming and Non-Gaming
Revenue
$55M $160M $315M
Estimated Market Share of Adult
Population
$150 8% 24% 47%
$300 4% 12% 24%
Lower Risk Higher Risk

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Competition
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
market.
If NC legalizes casinos,
Danville could lose a
significant portion of its
market and revenues. Note: Adult Population = 18 years and older

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Who Benefits?
Distribution of Benefits Low High
Virginia Gaming Taxes $2.5M $22.5M
Lynchburg Transportation District Gaming
Taxes
$1.9M $16.9M
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

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How do the local taxes
compare?
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%

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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

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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.

16. 16
National Wages by Occupation, 2018
Hourly Wage
(Average)
Annual Wage
(Average)
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
29% Service
Gaming Services Workers
First-Line Supervisors
Miscellaneous Entertainment Attendants
$14.37 $29,890
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
Higher Wage
Lower Wage
⅔ of workers
earn less
than $15/hr.
Nationally,
⅓ of gaming
workers
earn more
than $15/hr.
Source: Occupational Employment Statistics, Bureau of Labor Statistics - NAICS 713200 - Gambling Industries

17. 17
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
those workers.
.
Job Quality
2018 Hourly Wages/Earnings
for Select Industries

18. 18
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.

19. 19
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.

20. Factors that Drive the Impacts
What are the +/- Spillovers?
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Casino is isolated and
all-inclusive
Casino is embedded
with complementary
businesses
Casino patrons are
primarily local
residents
Casino competes with
local businesses
Casino provides limited
spillover benefits to
other businesses
Casino patrons are not
local residents
Casino provides limited
spillover benefits to
other businesses
Greatest potential for
positive spillover
benefits

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23. Thanks!
Any questions?
Contact Jerry Paytas:
▰ jerry.paytas@fourtheconomy.com
▰ 412-356-3755
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