Virginia Gambling: Petersburg Casino Pressures Horse Racing Machine Revenue

The gambling market in Virginia currently serves as a prime example of how quickly dynamics can shift when new players enter the field. At first glance, the July figures for historical horse racing machines (HHRs) appeared solid, with a nominal overall increase of 1.2 percent. However, this figure is deceptive. When adjusted to a same-store basis for properties that were already in operation, grosses actually fell by 11.7 percent. It becomes clear once again that new competition does not always stimulate the market but often simply redistributes existing player budgets.

Churchill Downs, which owns all HHR machines in the state, is feeling this change acutely. While some properties celebrated double-digit gains, others faced equally drastic declines. The deciding factor in this equation is Cordish Gaming’s Petersburg Live temporary casino. Although it is only a temporary facility, it has significantly impacted nearby slot parlors in the Richmond area. Revenues there sank by 25.6 percent to $10.3 million. This represents a major setback for operators who enjoyed a nearly competition-free environment for years.

Numbers and facts

The disparities between individual locations are immense. A bright spot in the Churchill Downs portfolio is The Rose in Dumfries. Revenues there surged by 22.3 percent, reaching a robust $15.2 million. On average, each machine there generated $306 per day. Even more efficient were the devices at Roseshire in Henrico County. With a daily average of $501 per machine, it recorded the highest efficiency in the state, even though the total gross of $2.7 million was more modest.

At the other end of the scale is Colonial Downs. Here, HHR revenue plummeted by 24.5 percent to just $3.8 million. In Emporia, the situation was similar, with a 15.9 percent slide. These sharp fluctuations within a single state demonstrate how geographically limited the reach of such venues often is. As soon as a more attractive alternative with a true casino atmosphere opens nearby, players tend to migrate.

Background

Why are these figures relevant for international markets or specifically for Germany? They illustrate a universal truth of the gambling industry: saturation is reached quickly. When a new provider like Cordish Gaming enters with its Petersburg Live project, it doesn't necessarily create new gambling demand; instead, the existing player budget shifts. Churchill Downs must now watch its HHR sites, which often served as a bridge technology to full casinos, struggle against "real" casino competition. While HHR machines are technically based on horse racing results, they feel almost identical to classic slots for the user. In Virginia, trust in this niche product is currently being tested by the availability of traditional casino structures.

Notably, performance in Hampton Roads went against the trend, with Rosie’s slots up seven percent to $9.1 million. Gains were also recorded in Vinton and Collinsville. Thus, it is not a general lack of interest in the machines, but a very specific predatory competition in urban centers where new licenses for classic casinos have been granted.

Why it matters for German players

For German players accustomed to the strict rules of the Interstate Treaty on Gambling (GlüStV 2021), such market reports from the US often sound like a different world. However, there are parallels. In Germany, the Joint Gambling Authority of the States (GGL) ensures strict regulation. The €1,000 monthly deposit limit and the €1 per spin cap for online slots are designed to maintain high levels of player protection. While the US often sees a wild scramble for market share, the German market is heavily regulated through the LUGAS system and the OASIS lock file.

Players in Germany should ensure they play exclusively with providers listed on the official GGL whitelist. Only there is it guaranteed that winnings will actually be paid out and that game mechanics are fair. Those playing at MGA or Curacao casinos enter a legal gray area without the protection of German authorities. The competition in Virginia shows us that variety is good for choice, but in Germany, player safety takes precedence over maximum revenue growth.

What it means for GGL-licensed casinos

German casinos with a GGL license have less to fear from sudden new mega-casinos in the neighborhood, as the number of concessions and the types of games offered are strictly limited. Nevertheless, competitive pressure among legal providers remains high. The numbers from Virginia serve as a cautionary tale: those who rest on past success and fail to modernize their offerings will quickly lose touch with the competition. Quality and player protection are the most important currencies in the German market for building long-term customer loyalty.

"At first glance, Virginia revenue for historical horse racing machines (HHRs) were up 1.2 percent in July. However, when adjusted to a same-store basis, the picture appeared far less roseate." - David McKee, Editor at CDC Gaming