Richmond lodge appeals court’s casino ruling

A Richmond nonprofit organization is continuing its effort to block the city’s do-over casino referendum — even though the measure is already on ballots and early voting is underway.

Richmond Lodge No. 1 of the Good Lions this week filed a notice to appeal an August decision by a Richmond Circuit Court judge who ruled in favor of the City of Richmond, allowing the referendum to appear on city ballots this fall.

The lodge, a nonprofit that runs charitable bingo games to raise money, filed a motion in Richmond Circuit Court in August to prevent the referendum, which asks voters to decide whether to allow the construction of the $562 million Richmond Grand Resort & Casino proposed by Urban One and Churchill Downs.

Late in August, Richmond Circuit Judge W. Reilly Marchant ruled against the lodge, which claimed that Richmond City Council had not run a competitive bidding process before voting in June to select RVA Entertainment Holdings — a joint venture between Urban One and Churchill Downs — as the city’s preferred casino operator.

Attorneys for the Good Lions, who claim they will lose future gaming revenue if the casino is built, filed a notification to appeal on Wednesday. As of Friday, the Virginia Court of Appeals had not received a brief from the organization. According to the clerk’s office, the appeal may not have a hearing until November. Meanwhile, early voting for the Nov. 7 general elections in Virginia started Friday, including in Richmond.

In a statement Friday, the lieutenant governor of the Good Lions’ Richmond chapter rebuked the judge’s decision that the group lacks standing to intervene in the vote, which is the second casino referendum put before Richmond voters, after the initial referendum failed by 1,200 votes in 2021. This year’s referendum, if passed, would approve a similar casino resort, with a 250-room hotel, a 3,000-seat concert venue, a $26.5 million upfront payment to the city government and a soundstage where co-developer Urban One pledges to invest $50 million over 10 years in TV, movie and audio productions. Richmond Grand would be built on 100 acres in the city’s South Side, just off Interstate 95, on property owned by Altria Group.

“If our charity, which would be decimated by this proposal, doesn’t have standing to bring this case, then no person or organization does, and how can that be the case? The handling of this process is obviously unconstitutional,” said Alexis Prutzman, lieutenant governor of Richmond’s Lodge No. 1 of the Good Lions. “Our work has benefited so many in Richmond and beyond and has given millions of dollars to worthy philanthropic causes, which is motivation enough for us to continue to fight this with everything we have.”

Marchant wrote in his Aug. 23 ruling, “Arguably, Good Lions’ alleged future loss of gaming revenue might be fairly traceable to the 2019 legislation of the Virginia General Assembly allowing casino gambling, but that government action is not what Good Lions seeks to challenge. … Good Lions’ challenge to the City Council’s no bid/no notice process for selecting an operator of the casino, where Good Lions does not seek to be the operator, is not a challenge of government action fairly traceable to its expected loss of revenue,” he concluded.

Two attorneys from national law firm Eckert Seamans’ Richmond office, William H. Hurd and Annemarie DiNardo Cleary, are now representing the Good Lions, a change from the organization’s previous legal representation by Chap Petersen, a Fairfax County state senator who filed the Richmond Circuit Court motion last month. Hurd, a former state solicitor general who has significant experience filing appeals, acknowledged Friday that he will represent the Good Lions.

Chuck Lessin, who owns the bingo hall in Richmond that the Good Lions lease for games and is acting as a spokesman for the casino opponents, said Friday that he doesn’t expect the matter to be settled before Election Day. The state’s appeal process gives the court clerk 40 days after an appeal is filed to make it available to the opposing party and set hearing dates, and counsel for the parties can also ask for extensions.

Even so, if the Good Lions prevail in the court of appeals, the Richmond referendum vote would be considered null and void, said Lessin, who served as chairman of Virginia’s Charitable Gaming Board until he resigned in February after a General Assembly controversy over Texas Hold ‘Em poker tournaments.

If the Good Lions win, the City of Richmond could appeal the ruling to the Virginia Supreme Court, Lessin noted, but added, “Essentially … a yes vote could not supersede the Virginia Constitution. A yes vote could really turn out to be a no vote.”

High stakes

The stakes are high for the casino’s corporate backers, who have sunk more money into the campaign than any other referendum under consideration in Virginia, and even outpaced donations to most state lawmakers and challengers seeking election.

According to Virginia Public Access Project’s finance report for political donations made through Aug. 31, Urban One and Churchill Downs contributed $8.14 million to the Richmond Wins, Vote Yes pro-casino PAC in August, more than three times the 2021 pro-casino campaign budget of $2.6 million. The Richmond Wins PAC also has created its own committee called Richmonders for Good Jobs, and donated $800,000 to it, according to state campaign finance reports.

Richmonders for Good Jobs’ mailing address is listed at 3204 Cutshaw Ave. in Richmond, the same address as the International Association of Machinists and Aerospace Workers’ Local Lodge 10. This year’s casino campaign has featured significant public support from local union members, who have spoken in favor of the project as supporting an expected 1,300 permanent casino jobs with average salaries of $55,000. Since 2021, according to VPAP, Urban One has made donations to state lawmakers in both parties.

Casino backers, including the majority of Richmond City Council and Mayor Levar Stoney, also have touted the project’s projected $30 million in annual tax revenue and $16 million over 10 years in charitable contributions. Stoney also announced that if the referendum succeeds this year, the city will allocate $26 million of the $30 million in annual revenue toward affordable child care as soon as fall 2024. Roughly $5 million would be placed in a Childcare and Education Trust Fund, the mayor said.

But Lessin said that large casinos like the one proposed in Richmond and those approved by voters in Bristol, Danville, Norfolk and Portsmouth “decimate” organizations like the Good Lions, which were the only legal operators of Virginia gaming parlors under state charitable gambling laws before 2019’s General Assembly vote that legalized commercial casinos in the commonwealth.

Charitable gaming also has suffered from the state’s introduction of skilled games, which appear similar to slot machines but let users bet on historic horse races at venues like Rosie’s Gaming Emporium. Those games, Lessin said, have “stripped about 60%” of local charities’ income from gaming, and he expects that the state’s new casinos will likely end most charitable betting parlors in the cities where they are being built, ultimately depriving people and groups that benefit from the Good Lions and other organizations’ philanthropy.

Although the Good Lions or any other charities did not vocally oppose the first Richmond casino referendum because of the City of Richmond’s extended vetting process in 2021, said Lessin, City Council’s 8-1 vote this year to approve Urban One and Churchill Downs’ proposal without considering others led the charity to take action in court. Richmond’s casino backers, he said, “have given millions of dollars in political donations, and they have swayed votes.”

Lessin said that charitable betting accounts for only 1.84% of all gambling in the state — taking into account the Virginia Lottery, sportsbook and other legal gaming options — and that charities are not allowed to make political contributions with their gaming income. Promoters of casinos, however, say they are bringing better jobs and funding for infrastructure, education and other needs in Virginia’s five economically challenged cities approved by the state to hold referendums.

A spokesman for the Richmond casino campaign and the city attorneys’ office did not immediately return messages seeking comment Friday.