Virginia one step closer to creating single gaming agency • Virginia Mercury

The sole exception under the proposal is the Virginia Lottery, a state agency created in 1987 after a statewide voter referendum, that would remain a separate entity and continue to oversee and regulate the sale of lottery tickets in the commonwealth.

“As we have gone through the cost-benefit analysis, our team has studied different options, continued stakeholder outreach and working sessions with the agencies, and our team views this option as the best path forward,” Collin Hood, a director at the Virginia-based consulting firm Guidehouse, advised the committee at its meeting in Richmond Wednesday.

The target operating model for the Virginia Gaming Commission, Hood added, is an “efficient, cost-effective and strong regulator.” 

If realized under the proposed plan, the new state agency would be able to respond to new regulatory and oversight needs from emerging gaming types, maintain the state’s commitment to horse racing and charitable gaming industries, increase transparency through centralized annual reporting to the public and the state government, and increase accountability for gaming regulation and oversight. 

It would also facilitate a consistent statewide problem gambling strategy across all gaming types and clarify the points of contact for key stakeholders, including Virginia State Police, local law enforcement, state legislators and the industry itself.

“Change is difficult, but it is the right thing that we need to do to get a handle on it, otherwise everybody is working in different silos,” Sen. Bryce Reeves, R-Spotsylvania and the committee chair, said in an interview after Wednesday’s meeting. 

“There is internet gaming or electronic gaming that happens in the cloud, and we have three different agencies trying to manage that, so there’s some areas where we can save the state a lot of money.”

Heading toward $21 billion in wagers

The plan recommended by Guidehouse, which is drafting various options, “is probably where we’re headed,” Reeves said. “Consolidation is going to help us with enforcement and compliance. If you talk to prosecutors today, they don’t even know what they are looking at.”

Before Virginia’s anti-gambling stance softened in 2018, about $3.4 billion was wagered on state lottery games, charitable gaming and traditional horse racing — a number that grew steadily as the state approved more ways to gamble. By 2025, when four casinos are expected to be open, total wagering could grow to $21 billion.

The JLARC report recommended that the Virginia Lottery should become the primary gambling regulator, noting the agency has already been beefing up its staff to handle sports betting and the four casinos being built around the state. 

But the Virginia Racing Commission that is in charge of live horse racing and the horse racing-adjacent Rosie’s slots enterprise, doesn’t have the staff to carry out its regulatory mission, the report found. It further concluded the Virginia Department of Agriculture and Consumer Services — which regulates forms of charitable gaming like bingo, poker and slots-like machines called electronic pull tabs — also doesn’t have the resources to do its job.

The creation of the Virginia Gaming Commission as a head organization would bring together the existing agencies in an effort to provide the state’s response to a rapidly changing industry, Reeves said. 

“I’ve never voted for gambling, and now I find myself the chairman of the committee, only from the simple fact that this all started from charitable gaming and then finding fraud in it,” he said, referring to findings by a General Assembly subcommittee in 2021 that showed corruption in the state’s charitable gaming industry was rampant due to inadequate oversight and conflicts of interest.