Including developer opposed to Norfolk casino deal

Virginia lottery grants consulting contract to law firm for Pennsylvania casinos

The lottery has been given broad new responsibilities and tight schedules for carrying them out under state laws enacted this year to license and regulate casino gambling and sports betting operations.
2020-11-04
Reading time 5:27 min
The state-run lottery said the $113,200 contract it signed last month with Eckert Seamans Cherin & Mellot, a Pittsburgh-based law firm with an office in Richmond, is solely for help in evaluating applications for sports betting licenses that Virginia expects to award early next year. Norfolk has joined with the Pamunkey Indian Tribe to build a casino if the city’s voters OK casino gambling this year.

A consulting contract has been awarded to Eckert Seamans Cherin & Mellot, a Pittsburgh-based law firm that represents three casinos in Pennsylvania.

One of the casinos is under development by a company that opposes a deal between Norfolk and the Pamunkey Indian Tribe to build a casino on the downtown riverfront, pending voter approval next week, the Richmond Times-Dispatch reports.

The Virginia Lottery lottery said the $113,200 contract it signed last month with Eckert Seamans Cherin & Mellot, a Pittsburgh-based law firm with an office in Richmond, is solely for help in evaluating applications for sports betting licenses that Virginia expects to award early next year. The one-year contract, with three one-year options, also allows the firm to provide “consulting on gaming and compliance issues as requested by the Lottery.”

“Eckert currently is not providing consulting services to the Lottery regarding casino licensing and regulation,” the lottery said in a statement on Friday. “Eckert is not providing legal services to the Lottery in any capacity, which is why no review was required by the Attorney General’s office.”

The lottery, created in 1988 after approval in a voter referendum, has been given broad new responsibilities and tight schedules for carrying them out under state laws enacted this year to license and regulate casino gambling and sports betting operations. The lottery awarded a separate, $1 million contract last month to Spectrum Gaming Group for strategic planning and investigation of applicants for mobile sports betting licenses.

The consulting contract with Eckert Seamans has raised questions about the law firm’s work with The Cordish Companies, a Baltimore-based company that is developing the Live! Casino & Hotel Philadelphia in that city’s stadium district.

Cordish owns the Waterside District in Norfolk under a redevelopment agreement with the city that the company says gives it preference for operating a casino if allowed under state law. The company has threatened to sue the city over the casino deal.

Eckert Seamans also is embroiled in a lawsuit filed against it in federal court in Pennsylvania by the owner of Virginia’s largest operator of electronic skill games. Pace-O-Matic, the Georgia-based owner of Queen of Virginia Entertainment & Skill, alleges the law firm breached its fiduciary duty by working against skill games in Pennsylvania while promoting them in Virginia. After moving to ban skill games this year, Virginia allowed them to operate in the state through June 30, 2021, under regulation by the Alcoholic Beverage Control Authority.

Mark Stewart, co-chairman of the law firm’s hospitality and gaming group in Harrisburg, Pa., said Eckert Seamans does not represent casinos in Virginia and is not involved in the legal dispute between Cordish and Norfolk over the city’s agreement with the Pamunkey tribe to build and operate a casino there if voters approve it in the election.

“We are not involved in casino licensing, nor do we represent the Cordish Companies or any casino operator in Virginia,” Stewart said in an email message on Friday. “We specifically have no involvement in the Norfolk matters.”

“Our engagement with the lottery does not involve skill games in any way, which ... do not fall under the lottery’s jurisdiction,” he added.

Cordish says it does not use the law firm for work in Virginia and has no plans to do so.
The lottery said Cordish is not eligible for a casino license under legislation the General Assembly adopted and Gov. Ralph Northam signed into law this year because “the city of Norfolk did not choose Cordish as its preferred casino gaming operator.”

“Under the statute, that decision was made by the city of Norfolk, not the Lottery,” the agency said in its statement.

Similarly, the lottery said a new law legalizing sports betting requires the agency to reserve five of 12 licenses for sports betting for casinos in Richmond, Bristol, Danville, Norfolk and Portsmouth, if voters approve them by referendum.

Richmond casino?

Voters in Bristol, Danville, Norfolk and Portsmouth are acting on casino referendums in the election, based on deals the cities have reached with casino developers. Richmond will wait another year to ask voters to approve casino gambling, giving the city time to undertake a competitive bidding process similar to the one that Danville used to select a casino resort developer.

Jim Nolan, spokesman for Richmond Mayor Levar Stoney, said the city expects to submit a draft request for proposals to the Richmond City Council this fall “and will engage the community and council on the proposals before moving forward.”

The city may give the Pamunkey tribe “preferred consideration” under the law because of its tribal gaming rights. However, at least two other companies are interested in competing to develop a casino in Richmond: Colonial Downs Group, which already operates a Rosie’s Gaming Emporium in South Richmond that features slot-like machines that operate on historical horse racing data; and Urban One Inc., a Washington-based media company that has an investment interest in the MGM National Harbor casino in Maryland.

“We are opening it up for everyone,” said Sharon Ebert, deputy chief administrative officer for economic and community development, who added that the request for proposals would follow the specific guidance in the new state law.

“I would say the biggest thing is community support,” Ebert said.

The Pamunkey tribe has proposed a $350 million casino resort in South Richmond, but has faced opposition from adjoining neighborhoods, which are predominantly African American.

“The tribe is currently focused on Tuesday’s referendum in Norfolk, but remains keenly interested in the Richmond market and looks forward to seeing how that plays out with the city,” Jay Smith, a spokesman for the Pamunkey, said Friday.

Alfred Liggins, CEO of Urban One, said the company plans to submit a proposal that “will include a focus on diversity and inclusion, and creating economic opportunities for Black and other minorities in central Virginia.”

Colonial Downs said it is focused primarily on opening a Rosie’s Gaming Emporium in Dumfries, a Prince William County town in the lucrative Northern Virginia market, in January. Under the new law, Colonial Downs would be awarded the right to operate up to an additional 2,000 historical horse racing machines — including 1,650 in Dumfries — if all five cities approve casino referendums. The provision would compensate the company for potential revenue losses at its Rosie’s locations because of competition from casinos.

This year’s referendums

The referendums on the ballot in four cities in this year’s election have generated a flood of campaign contributions, primarily from casino interests to urge voters to approve them. In Norfolk, the Pamunkey tribe has contributed more than $1 million to two political action committees urging Norfolk residents to “vote yes” on the referendum.

The tribe has come under criticism for its financial ties to Tennessee billionaire Jon Yarbrough, who is bankrolling its campaign for approving the referendum and developing the $500 million casino resort if it passes.

“It’s no secret that the tribe’s development partner, Jon Yarbrough, is providing financing for the tribe to establish gaming in Norfolk,” said Smith, the spokesman for the Pamunkey.

“What many people don’t know is that the loan to the tribe is a ‘no risk’ loan — meaning that if the referendum fails or the casino is not successful, then the tribe doesn’t have to pay back one single cent,” he said. “The loan is only paid back from any gaming revenue. It’s also worth noting that this loan arrangement has been approved by the U.S. Department of Interior to ensure that the tribe is not being taken advantage of.”

Informed Norfolk, a volunteer group opposed to the casino project, has received about $25,000 in donations, including $5,000 in in-kind services from Red Banyan Group, a Washington-based public relations firm that said it works separately for Cordish on a monthly retainer.

“It’s not coordinated with Cordish,” said Asher Levine, managing director of the public relations firm.

“We decided to get involved because it became evident to us upon reviewing the deal in Norfolk that people were being exploited,” Levine said.

Leave your comment
Subscribe to our newsletter
Enter your email to receive the latest news
By entering your email address, you agree to Yogonet's Condiciones de uso and Privacy Policies. You understand Yogonet may use your address to send updates and marketing emails. Use the Unsubscribe link in those emails to opt out at any time.
Unsubscribe
EVENTS CALENDAR