A draft bill calling for the building of three casinos in economically deprived counties, and a fourth to be developed by the Lumbee Tribe in the east of North Carolina, has received backing. But while these would create jobs and boost tourism, they could have an adverse impact on existing properties, writes Paul Girvan.
Much of the news emanating from North Carolina this last year revolved around online sports betting. But a recent draft casino bill circulating among legislators in the Tar Heel state has gained some support.
The bill has the potential to disrupt fledgling casino developments in Virginia, especially Caesars Virginia in Danville. It also potentially puts pressure on tribal casinos located in the western portion of the state, threatening gaming revenue rumoured to approach $1bn.
The bill calls for the development of four Class III casinos, one of which is assigned to the Lumbee Tribe for casino development in the eastern portion of the state. The remaining three casinos would be operated by the single entity that wins the bid.
The language in the draft bill (below) essentially limits the development of the three commercial casinos to Rockingham, Anson and Nash counties.
A site that is located in a county that (i) is a development tier one area, as defined in GS 143B-437.08 for the 2022 calendar year, (ii) has a majority of its land area within 60 miles of an international airport, (iii) is east of counties traversed by Interstate 77, (iv) does not contain Indian lands with gaming as of 1 July 2023, (v) is either a border county or a county traversed by Interstate 95, (vi) has a population of less than 100,000 as of the most recent federal decennial census at the time the application is made, and vii) is not in a county listed in GS 14-292.4(c)(5).
North Carolina casinos form part of new entertainment districts
The bill requires entertainment districts to be developed along with the casino in each of the three locations. The stated goal is to increase tourism and rural economic development. There’s a vision of retail, hotels, entertainment, residential and commercial and industrial developments.
The competing bidders would have to invest a minimum of $1.5bn and meet employment targets at each location. Not surprisingly, given the requirement and locations, this is titled as a Rural Tourism Incentive Programme designed to increase employment and economic development in rural counties.
The most obvious impact will be on Caesars Virginia in Danville, straddling the border between Virginia and North Carolina. Caesars, in partnership with the Eastern Band of Cherokee, opened a temporary casino on 15 May 2023. The permanent casino is slated to open in 2024.
It is planned to include a casino, a 500-room hotel, meeting rooms and conference centre and a 2,500-seat entertainment venue. The casino will feature 1,300 slot machines, 85 table games, a poker room and a sportsbook.
Built in Virginia, made in North Carolina
Caesars Virginia expects to draw a significant portion of its guests from the Winston-Salem, Durham and Raleigh metropolitan areas. More than 50% of revenue is likely to come from North Carolina residents.
The inclusion of Rockingham in the shortlist of three counties is a direct response to the Danville casino, located to provide an intervening opportunity and closer gaming venue for players in these cities.
With the right operator and the development of an entertainment district, a property in Rockingham County would present a powerful competitor to Danville. It could even provide an alternative for residents in southern Virginia.
The resultant market for Caesars Virginia (estimated to be approximately $400m) could shrink significantly, by as much as 45%-50%. Expenses would rise due to increased competition.
The Nash County site is approximately 40 miles east of Raleigh-Durham. While not in an intercept location like Rockingham County, it does provide an alternative closer to the metropolitan area than the Danville casino. This will intensify the battle for market share with Caesars Virginia.
The Anson County site is approximately 35-45 miles east of Charlotte. It would offer an alternative to the Catawba Two Kings Casino Resort, 30 miles west of Charlotte. That casino is currently in a temporary structure. Plans to develop a permanent casino costing $273m featuring a 1,500-room hotel, entertainment centre, restaurants, shops and a casino with 1,796 slot machines and 54 table games are currently on hold due to infractions of the Indian Gaming Regulatory Act.
The Charlotte market is large enough to support two casinos, especially if gamers from Atlanta can be induced to visit. However, the announcement of a commercial venture increases uncertainty surrounding the timing and scope of the tribal development.
