The revised state budget Gov. Glenn Youngkin rolled out Monday was a mixed bag for gambling policy in the Richmond area.

Both the city of Richmond and Henrico County stand to gain more tax revenue from Rosie’s gambling facilities in the future after Youngkin approved a state policy allowing host localities to keep a bigger share of Rosie’s revenue.

However, Youngkin vetoed a proposal that would have given Henrico County voters a chance to weigh in on whether they want a Rosie’s facility in their community. 

City representatives have applauded the revenue-sharing tweak Youngkin approved, which will allow Richmond to keep millions more in local tax dollars generated by the city’s Rosie’s instead of splitting the money evenly with New Kent County. The change could be worth $3 million or more for the city, depending on how much money visitors spend on the slots-like historical horse racing machines that are the main attraction at Rosie’s.

Henrico leaders were upset by Youngkin’s veto of their efforts to reassert some local control over the development of a Rosie’s in Henrico after the county’s relationship with the horse racing industry soured. 

County officials have said the previous owners of Colonial Downs had agreed to play nice with Henrico when scouting potential Rosie’s sites in the county, and only build in a location where they had the county’s blessing to build. In Henrico’s telling, a big gambling company was aggressively forcing its way into the county with little regard for the opinions of its new hosts and neighbors.

Representatives for Churchill Downs — the Kentucky-based owner of Colonial Downs and its affiliated Rosie’s gambling parlors throughout Virginia — had argued they were well within their legal rights to begin building a Rosie’s at the Staples Mill Shopping Center. And the company lobbied against giving Henrico a new chance to stop an otherwise legal project just because the county’s political leaders were unhappy with the company’s actions.

In the end, Youngkin — who owns a horse farm in Northern Virginia and has frequently attended horse races while governor — sided with Churchill Downs over Henrico.

“They received all the permits they needed to start building, invested $5 million in this new site, and then someone came and tried to change the rules,” Youngkin told reporters on Monday, according to the Richmond Times-Dispatch. “I just didn’t think that was appropriate. That is not the way we do business.”

In a statement, Henrico said it was “profoundly disappointed” the governor had sided with a gambling company and against the idea that voters should have a say in whether gambling comes to their community.

“As we’ve seen repeatedly in recent months, Rosie’s has done nothing but hide from Henrico’s voters and skirt meaningful discussion of its potential presence within our community,” said Dan Schmitt, the chair of the Henrico Board of Supervisors. “There will never be a day where Henrico County doesn’t fight for the voice of its residents.”

Colonial Downs issued a statement of its own.

"Henrico County approved a building permit in November 2024 and construction is well underway with more than $5 million invested to date," a company spokesperson wrote. "The vetoed budget language would have sent a very negative message to Virginia businesses that laws and regulations can change without warning even after projects have been approved, permits have been issued, and contracts have been signed. Roseshire is slated to open its doors later this year and we look forward to welcoming guests from across Central Virginia."

The General Assembly could potentially override Youngkin’s veto of the Henrico measure, which passed with bipartisan support. However, legislative overrides are rare in Virginia, because members of the governor’s party usually back the governor’s decision even if they previously supported the underlying measure.

As Virginia dramatically expanded legalized gambling over the last decade, policymakers have usually upheld the idea that gambling facilities should only go where they’re welcomed by the local community and local government.

If the veto stands, Henrico could be in the unusual position of having a casino-like facility that was built in a way that overruled the wishes of local officials.

Contact Reporter Graham Moomaw at gmoomaw@richmonder.org