Virginia’s gambling regulation should be centralized under the Virginia Lottery, according to a Joint Legislative Audit and Review Commission (JLARC) report, which found that regulation is split between three different agencies, and two of them are understaffed. In addition to the lottery, which regulates casinos and sports betting, the Virginia Department of Agriculture and Consumer Services (VDACS) regulates charitable gaming, and the Virginia Racing Commission (VRC) regulates live and historical horse racing (HHR).
“Gaming regulation is not the primary function of VRC and VDACS. Both agencies need more staff and better technology to ensure that all gaming under their purview operates with integrity,” the report summary states.
“VRC does not have adequate staffing, expertise, or regulations to effectively oversee HHR,” the summary adds.
JLARC Project Leader Stefanie Papps told legislators Monday that while the VRC’s members have experience in Virginia sports and agriculture, which is useful for live horse racing, HHR is a slots-like gaming experience that requires different expertise and more staff.
“According to the gaming experts we interviewed, the standards applied to licensing casinos are the same standards that should be applied to licensing an HHR facility, and this is really because an HHR facility poses many of the same risks as a casino,” she said.
“VDACS is not staffed to sufficiently regulate charitable gaming,” JLARC reported.
Papps said that VDACS isn’t meeting internal inspection and audit goals even as more responsibilities are being added.
“Based on VDACS’ workload for charitable gaming, it will need at least 26 employees to provide adequate regulation. However, VDACS currently only has 11 filled positions,” she said.
Delegate Lee Ware (R-Powhatan) responded, “I don’t serve on the committee that oversees this, but what we have heard, I found profoundly troubling.”
“I agree with you, Delegate,” Senate Finance Co-Chair Janet Howell (D-Fairfax) said.
“Establishing a single state gaming agency would ensure effective and efficient regulation across all gaming formats,” JLARC found in its report. “Virginia Lottery could best serve as Virginia’s central gaming agency, with some additional cost.”
JLARC said charitable gaming and HHR regulation should be transferred to the Virginia Lottery, but that the VRC should retain oversight of live horse racing and wagering. As part of that, 21 positions should be transferred from VDACS to the lottery. However, that comes with a price increase, since Virginia Lottery staff are paid more. The lottery would also need 20 new positions. In total, consolidation would cost about $5.7 million; $3.5 million is currently being spent on HHR and charitable gaming regulation.
At a Tuesday Senate Finance and Appropriations Committee meeting, State Senator Creigh Deeds (D-Bath) asked Virginia Lottery Executive Director Kelly Gee about the recommendation to centralize most gambling regulation at the lottery.
“I think the JLARC report said, in addition to moving the existing staff from the agencies, that they recommend moving over, an additional 20 to 25 staff would be needed at lottery,” Gee said. “I think I would be remiss if I didn’t just say, if we are asked to do this, we will do it and we’ll do it in the right way. But we have a lot on our plate right now with licensing casinos and coming up on the sports betting renewal process for the very first time. So the appropriate resources and staff are key to our success.”
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Eric Burk is a reporter at The Virginia Star and The Star News Network. Email tips to [email protected].
