Rivers Casino Portsmouth generates $250M in revenue, $15M in city taxes in first full year

PORTSMOUTH — In its first full year of operation, Rivers Casino Portsmouth has generated nearly $250 million in gaming revenue, providing the city of Portsmouth with more than $15 million in tax revenue to beef up its coffers.

The casino opened its doors last January to much fanfare as thousands braved a cold Monday morning echoing chants of “Let us in!” It marked the first casino in Hampton Roads and the commonwealth’s first permanent gambling facility.

Located along Victory Boulevard near the newly named Missy Elliott Boulevard, Portsmouth’s casino project moved quickly after a successful ballot referendum in 2020 in which two-thirds of Portsmouth voters gave it the green light. Construction of the 250,000-square-foot facility began a year later, amounting to a $340 million investment. The Virginia Lottery Board granted the casino an operating license in November 2022.

The casino boasts more than 1,400 slot machines, nearly 60 tables, two dozen poker tables, a handful of restaurants and bars, and more than 25,000 square feet of event space.

“We started off amazingly strong in January and February and really haven’t looked back” even in the slower months, said Rivers Casino Portsmouth General Manager Roy Corby. “It’s been a remarkable year.”

The extra tax revenue has been a boon for a city with limited tax resources — about 40% of land in Portsmouth is tax-exempt due to state or federal ownership. While casino earnings show no sign of slowing down, competition is on the horizon. The Portsmouth casino is currently one of just three in the state. But Virginia lawmakers are considering whether to legalize and tax skills games, and neighboring Norfolk is still actively pursuing development of its own casino less than 10 miles away.

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Benefit to Portsmouth

The tax revenue generated from Rivers Casino Portsmouth seems to be on par with what was originally anticipated, with city leaders previously estimating the city would realize about $16 million in annual tax revenue.

Casino earnings are earmarked for several tax funds as Virginia law assesses a graduated tax on a casino’s adjusted gaming revenue, or wagers minus winnings. Host cities collect a share of tax revenue, and in Bristol, such revenue is directed to a regional fund for education, transportation and public safety improvements. For Portsmouth, that breaks down to between $1.2 and $1.7 million of tax revenue each month, according to the Virginia Lottery’s monthly earnings reports. The state’s Gaming Proceeds Fund, Problem Gambling Treatment and Support Fund as well as the Family and Children’s Trust Fund also receive shares of the tax revenue from each casino.

It’s not yet clear how much casino revenue can be spent in the city’s next fiscal budget, but City Council opted last year to use a few million as part of the city’s $846 million budget to help fund health stipends for retirees and a partnership with the Hampton Roads Alliance. Interim City Manager Mimi Terry said at the time that the city won’t know the true annual amount of revenue for another few years once trends stabilize.

With Norfolk’s casino plans up in the air and voters’ recent rejection of attempts to bring a casino to Richmond, the casino can be seen as a boon to Portsmouth specifically — and leaders seem to feel the impact. Though it took a couple decades, state Sen. Louise Lucas, a Democrat from Portsmouth who had championed bringing a casino to the area since the 1990s, believes it was worth the wait. At an event Saturday celebrating the casino’s one-year anniversary, which saw about 200 in attendance, she told reporters her only regret is that it wasn’t done sooner. She was among the General Assembly members who pushed for the commonwealth to lift its ban on casino gaming, passing legislation to do so in 2020.

“It’s a lifeline for Portsmouth,” Lucas said. “It’s more than just a building. It’s a symbol of hope.”

The casino has also served as a new meeting place for city leaders, hosting Mayor Shannon Glover’s State of the City address last year, for example.

Lucas and her daughter, Portsmouth Vice Mayor Lisa Lucas-Burke, are frequent visitors, coming to the casino about once a week — at least when the General Assembly is not in session, Lucas said. Among her favorites are the slot machine games Thunder Drums and Stinkin’ Rich Skunks Gone Wild, which she said she’s had many winning rounds with. Slot machine games seem to be a fan favorite as they comprise the vast majority of casino earnings, according to the Virginia Lottery.

Robert McNab, chair of the economics department at Old Dominion University, said the 2020 legislation that allowed five cities to pursue casino projects targeted economically disadvantaged locations that would see casinos as “engines” of economic development. So the casino is particularly beneficial for a city like Portsmouth that’s seen a declining population amid a need for more employment opportunities.

Rivers Casino has also created jobs. Corby credited the casino as an ideal place to work, citing recognition as a top place to work according to CoVaBIZ Magazine. Of the nearly 1,100 casino staff members, around 35% are from Portsmouth, from blackjack dealers up to the management team. The remainder, save for about 100 workers, are local to the area.

“We’re a great reflection of our community,” Corby said.

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Regional impact

But McNab said the impact of Portsmouth’s casino depends on where you stand — or rather, which side of the water you reside.

“If you stand in Portsmouth, then the casino has an obvious positive economic impact because it’s attracting spending dollars to the city. And those spending dollars (are) being spent on gambling and food and other things (that) result in tax revenues flowing into Portsmouth’s coffers,” McNab said. “If you think about it regionally, you’re moving, essentially, money around because the data continues to show that most of the patrons for casinos are drawn within the local area.”

Compared to the casinos in Danville and Bristol, Portsmouth has outperformed its competition, primarily due to its location in a metro area, McNab said. But one tool that can keep Portsmouth’s casino competitive locally, particularly against one in Norfolk, is leveraging its surrounding area with the establishment of an entertainment district. Doing so can benefit local businesses that may not currently see the financial boost from patrons spending money at the casino. And a hotel means the casino can draw more visitors from across the state.

“The standalone casinos typically do not have this large spillover effect on other businesses,” McNab said. “Because people come, they spend their money and they leave. It’s not an overnight destination location.”

Part of the agreement between Rivers Casino Portsmouth and the city is that Rush Street Gaming, which owns the casino operation, must begin building a hotel if at least $175 million of profit is made in one year while competing against Norfolk’s yet-to-be-built casino, or if $250 million is made annually over two years.

If work on the hotel doesn’t start within four years of the casino being open, Portsmouth’s economic development authority can take over and seek a new builder. Corby told The Pilot that they’re still “exploring the possibility” for the hotel and that it’s too early to announce plans.

Since casinos in Virginia are still relatively new, McNab said it may take another year or two to determine how big of a role casinos play in attracting visitors to Hampton Roads.

McNab said he expects casino revenue in Portsmouth to “remain relatively strong” over the next year. But competition could cut into those profits. After back and forth the last several years over the legality of skill games, Virginia lawmakers are considering legislation to tax and legalize the slot machine-like devices often hosted by restaurants and convenience stores. In Norfolk, developers are still working on design plans for the proposed HeadWaters Resort and Casino project next to Harbor Park.

“If the Norfolk casino gets off the ground in (2025), if skill games are allowed by the General Assembly, if internet betting proliferates even more, then these competitive forces may limit the growth of the casino in the future,” McNab said.

At the local level, toll fees could play a role in whether someone decides to gamble in Portsmouth or Norfolk. It then becomes a matter of competition at the local level and where Hampton Roads residents prefer to spend their entertainment dollars.

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Looking ahead

The social cost must also be weighed against the financial benefit, McNab said, adding that the commonwealth has seen a rise in problem gambling. The Virginia State Police established a tip line to collect gambling concerns. A spokesperson told The Pilot complaints “regulatory in nature” have been forwarded to the Virginia Lottery, which oversees regulations for casino facilities. Virginia Lottery did not respond to requests about the particular complaints by the time of publication.

Rivers Casino Portsmouth was previously cited by Virginia Lottery for alleged gaming violations, once in January and February and once in August. In both cases, the matter was resolved through a settlement to avoid formal administrative hearings, which resulted in Rivers Casino paying around $315,000 total. Allegations across both settlements included underaged people on the gaming floor, licensing requirements for slot machines and unauthorized games in play.

Corby said he’s confident that such things “are behind us,” and that they’ve worked to reconcile the allegations with corrective action plans.

Crime was a primary concern among residents upon the casino’s opening. Corby previously told The Pilot that he and Portsmouth Police Chief Stephen Jenkins agreed to set up a police substation on site, which Corby said “gives a great peace of mind to everybody here.”

Corby said the casino has also made it a point to be involved in local community service efforts. Over the year, the casino received a Civic 50 award from Volunteer Hampton Roads, and has donated at least $861,000 and given thousands of volunteer hours to various causes like Wreaths Across America and local food banks and H.E.R. shelters, he added.

The casino has also attracted entertainment from the likes of KC and the Sunshine Band, Kool & the Gang and Theresa Caputo, the “Long Island Medium” from TLC’s popular reality series. And the casino has opened more amenities since, including an additional lounge and Yard House, a high-end sports bar chain.

Whatever the future holds as far as direct competition, Corby doesn’t seem discouraged.

“I think we’re very well positioned for the future,” Corby said. “And I think it’s very bright for Rivers Casino Portsmouth in the city of Portsmouth.”

Reporter Jane Harper contributed to this report.

Natalie Anderson, 757-732-1133, natalie.anderson@virginiamedia.com