ST. THOMAS- Members of the Committee of the Whole, led by Senate President Donna A. Frett-Gregory, convened in a meeting at the Earle B. Ottley Legislative Hall to received testimony on the proposed settlement agreement with Southland Gaming of the Virgin Islands, Inc. and VIGL Operations LLC to facilitate the construction of the Clinton E. Phipps Racetrack facility on St. Thomas, to support and improve horseracing in the Virgin Islands, and to facilitate the implementation of video lottery at the racetrack on St. Thomas.
Denise George, the Attorney General of the Virgin Islands provided limited testimony as the matter is still pending in court. Attorney George indicated that in 2018, Southland Gaming of the Virgin Islands filed a lawsuit in the U.S. District Court against the Virgin Islands Government claiming that the VIGL franchise agreement pertaining to the operation of slot machines at a racino in the St. Thomas district, is an unconstitutional impairment of Southland Gaming’s VLT agreement with the Virgin Islands Lottery. Attorney George further indicated the Government of the Virgin Islands opposes the allegations of Southland gaming and continues to defend against the lawsuit. The lawsuit was stayed in early 2021 to allow for a possible resolution, which is why the Legislature convened to consider the proposed settlement agreement.
Jenifer O’ Neal, the Director for the Office of Management and Budget and the Chairperson of the Virgin Islands Lottery Commission provided testimony. Director O’ Neal reminded the body that no horseracing has taken place in the territory since 2017. It was mentioned that Southland Gaming VI has an existing agreement with the Government of the Virgin Islands, through the VI Lottery, which expires on July 29, 2028. In support of SGVI’s dismissal of their case against the GVI, the acceptance of a new development agreement at the Clinton Phipps Racetrack would include new buildings and new race purses, the VLT agreement by Southland Gaming of the Virgin Islands would be extended at the end of the current agreement to include automatic renewals for 2 five-year terms and a three-year term. Director O’ Neal stated that additional revenues should be expected from the agreement. The reopening of the racetracks in St. Thomas and St. Croix would bring forth increased tax collection, more employees, additional business licenses and gross receipts. She urged the body to vote favorably for the proposed legislation.
Shaine Gaspard, the Executive Vice President of Compliance and Chief Operating Officer for Southland Gaming of the Virgin Islands added testimony. Southland Gaming has been the video lottery contractor for the Virgin Islands Government since 2003. Pending resolution of the court case, Southland Gaming would take over development of the Clinton E. Phipps Racetrack, providing over $11 million in improvements. This would include concessions, restrooms, and luxury boxes, gaming center, judges’ booth. At least 50 video lottery terminals would be operated in the gaming center.
Calvert White, the Commissioner of Sports, Parks, and Recreation voiced additional support for the proposed settlement agreement. In White’s testimony, it was stated that the Clinton E Phipps racetrack was formerly managed and run by the Department of Sports, Parks, and Recreation before the franchise agreement between the Government of the Virgin Islands and VIGL was signed. Because of the litigation, the project to improve the track stalled, and DPNR was once again responsible for maintaining the property. Unfortunately, equipment that was needed to maintain the site was destroyed in the aftermath of the 2017 hurricanes. White stated that the development of the facility would unify horse racing in both districts. Southland Gaming has committed to provide up to $100,000 per race day, with up to $600,000 annually.
Marvin Pickering, the Chairman and Chief Executive Officer of the Virgin Islands Casino Control Commission also added supporting testimony. The Commission is responsible for the regulation of casinos based on the Virgin Islands’ Casino and Resort Control Act of 1995. CEO Pickering voiced concern over some parts of the proposal. A District Court of the Virgin Islands ruling stated that VLT and slot machines are the functional equivalent of each other, and Chairman Pickering asserted that the Casino Control Commission is the regulatory body for such games and its equivalent, and not the Virgin Islands Lottery. According to testimony given by Pickering, gaming at the St. Thomas racetrack would be unregulated. Casinos and Racinos in St. Croix must undergo an intensive application and investigativeprocess to be licensed, in any fashion by the commission. One proposed section of the legislation states that St. Thomas Racetrack operators would operate tax free, while an annual tax of 25% on gross revenues would be applied to racetracks in St. Croix, to which Pickering said was a major disparity.
Raymond Williams, the Director of the Virgin Islands Lottery, added additional testimony on the matter. The Virgin Islands Lottery is the regulator of Video Lottery Terminals in the St. Thomas-St. John district. Director Williams stated that revenues from Video Lottery Terminals have been used to support numerous government agencies, like GERS, the Department of Education, and the Department of Human Services. He stated that the absence of Horse Racing in the Virgin Islands was deafening.
After receiving testimony, Senators questioned testifiers. Senator Alma Francis Heyliger voiced some concern about proposed revenues, asking if a feasibility study was done. Francis Heyliger stated that “We have to put our horsemen at the front. Horseracing is a part of who we are.” Senator Kenneth L. Gittens voiced some concern over the proposal, stating that the proposal created an unregulated monopoly in violation of the Sherman Act,said it looked and sounded like a special interest, stating that the measure should be sent back to committee and fleshed out. Senator Franklin D. Johnson questioned why the body was even there in relation to the settlement.
Senate President Frett-Gregory gave comments in the matter.
“If we have horseracing only in St. Thomas, who wins? If we have horse racing only in St. Croix who wins? We have to come together and figure this thing out.”
Senate President Frett-Gregory gave further comments, voicing some frustration at the process.
“When the elephants fight, the grass gets trampled. Our horse men and women are getting trampled.”
Senators present at today’s Committee of the Whole meeting included Donna A. Frett-Gregory, Marvin A. Blyden, Samuel Carrión, Dwayne M. DeGraff, Novelle E. Francis, Jr., Alma Francis Heyliger, Kenneth L. Gittens, Javan E. James, Sr., Franklin D. Johnson, Carla J. Joseph, Steven D. Payne, Sr., Milton E. Potter, Janelle K. Sarauw, Kurt A. Vialet and Genevieve R. Whitaker.