A bill in Virginia’s General Assembly could create a painful tear in the skin of Virginia racing’s economic model. House Bill 2498, authored by Del. Paul Krizek (D-Alexandria), would shift oversight of historical horse racing (HHR) machines, the primary source of racing purse money, away from the Virginia Racing Commission in a move racing insiders fear could weaken the sport’s hold on HHR revenue.

The bill, which has been referred to the Committee on General Laws, would move HHR oversight to the Virginia Lottery temporarily and then to a new entity that the bill would create, the Virginia Gaming Commission.  The new Gaming Commission would oversee all forms of legal gambling in Virginia except for the state lottery.

The state Racing Commission would continue to oversee matters such as licensing and the rules of the race.

“We know separating the funding from racing is decoupling. We have seen it time and time again across the country,” explained Debbie Easter, Executive Director of the Virginia Thoroughbred Association.

In many states, including Virginia, slot machines or HHR machines have been permitted with a portion of the revenue produced dedicated to racing, including purses.

“Decoupling,” as Florida’s Gulfstream Park has recently proposed in that state, severs the connection between slots and racing. Racing advocates fear that dissolving the legislative connection between the two could eventually result in severe negative impacts on racing.

Indeed, HHR was a monumental component in the return of thoroughbred racing to Virginia in 2019 after it was approved by the state General Assembly and then-Governor Ralph Northam (D) in 2018.  Following the approval, Colonial Downs was purchased by Revolutionary Racing, LLC and reopened after being shuttered for over five years. 

The legislation appears to respond at least in part to a 2022 Joint Legislative and Audit Review Committee (JLARC) report that criticized the Virginia Racing Commission for having “not taken actions necessary to effectively regulate large-scale commercial gaming” regarding HHR. 

JLARC added that the “VRC has four full-time employees, none of whom has the experience necessary to regulate HHR machines.”

The VRC needs “more staff and better technology to ensure that all gaming under their purview operates with integrity,” the report said.

It’s worth noting that HHR has done what officials hoped when approving it without any publicly known issues, and the VRC has worked with the Thoroughbred Racing Protective Bureau as a third party to review security and operation procedures and conduct on-site inspections.

Since the JLARC report, the Commission has hired Waqas Ahmed as its Executive Director last summer. Ahmed specialized in HHR as the Deputy Executive Director with Kentucky’s Racing Commission. 

Virginia’s existing law ties the number of racing days to the number of HHR terminals, with one day of live racing required per 100 terminals deployed. As the number of terminals has increased, so, too, has the number of days. In 2025, Colonial Downs is slated to host 44 days of live racing, including, for the first time, a March mini-meet featuring a Kentucky Derby prep race.

Virginia’s racing industry generates more than $540 million in economic impact annually, according to a 2019 report, “Economic Impact of Virginia Horse Racing and Breeding Industry,” prepared by Chmura Economics and Analytics. Further, it creates nearly 5,300 jobs.

The majority of both the jobs and economic impact figures stems not from gaming but from other activities, such as farriers, grooms, and the like. But it’s also true that it’s wagering that makes the racing world go ‘round, and HHR are vital to that.

The horse racing and breeding industries are a specialized, agriculturally-based economy, making an annual impact that rivals that of James Madison University. 

“The primary charge of the Virginia Racing Commission is ‘to promote, sustain and grow a native industry in Virginia,’ which is not included in the legislation,” observes Easter.  “To have that mission to do is still very important.”

In fact, the split envisioned by HB 2498 would mean that the VRC would continue to have a mission that includes sustaining and growing the industry – but possibly without the economic tools to do so.

Beyond the rapid growth of racing at Colonial Downs – after it had been shuttered for several years – HHR has also helped secure futures for many Virginia farms, through the Virginia Certified Residency Program, which was created in 2017.

Many of these farms weren’t new farms but rather farms of past Virginia breeders that have been passed down through generations or purchased by new owners. This generation of farm owners reinvested not only in the infrastructure of the past, but also in the current programs and racing opportunities present within the state.

Farms such as Eagle Point Farm in Ashland, Braeburn Farm in Crozet, or Southgate Farm in Millwood each make a local economic impact of $1 million annually. There are over a hundred of these types of farms, some larger, some smaller, across the Commonwealth from southwestern Virginia to the Eastern Shore. 

While their survival and success rely on gaming, their economic impacts are more tangible to their local economies.

“We have arrived at this point because many new forms of gaming have come into this state so quickly,” the VTA’s Easter noted about the pending dilemma upon Virginia horse racing which has existed since voters approved a statewide referendum permitting it in 1988. 

Horsemen first sought to bring pari-mutuel racing to Virginia in 1946 and later off-track wagering in the early 1990s, the legislation that led to the construction of Colonial Downs. 

Given that history – and the steady growth of the racing and breeding industries – shifting oversight of HHR from the Virginia Racing Commission appears risky and unnecessary. It would be a state-inflicted wound to an industry that’s been a racing success story in recent years.

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