Colonial Downs Eyeing Former Kmart Site In South Richmond For Possible Off Track Betting Parlor

Colonial Downs is considering buying a former Kmart building in South Richmond and transforming it into a betting site with slots-like gambling machines, according to a spokesman for the owners of the New Kent County horse-racing track.

Colonial Downs has secured an option to buy the 140,000 square-foot building at 6807 Midlothian Turnpike, but the sale could depend on whether Colonial Downs wins state and local approvals to install hundreds of historical horse racing machines in the former big-box store.

“The location on Midlothian Turnpike in the City of Richmond is attractive to us as a potential site for Historical Horse Racing (HHR) for a variety of reasons and we believe it would be welcomed by the community given how long that property has been vacant and deteriorating,” said Mark Hubbard, a consultant for McGuireWoods Consulting who works with Colonial Downs.

The Kmart store is on Midlothian Turnpike just north of Chippenham Parkway. Photo by Bob Brown.

“However, we are in the process of evaluating proposed regulations for HHR across the commonwealth and that process will ultimately dictate where and to what extent we can create jobs and revenues for local communities, Virginia’s horse racing industry and the state.”

The Kmart closed in 2011, and the building has been used recently as a space for gun shows and a carnival. Last year, a Virginia Beach company said it would redevelop the building as a supermarket, but that plan never materialized.

The state is finalizing regulations governing recently legalized historical horse racing machines, which let players gamble on horse races that have already taken place while hiding the horses’ names and other race details. The terminals resemble slot machines, but because the payouts come from pools of money generated by the players, they function under the same pari-mutuel wagering system used in live horse racing.

The General Assembly passed legislation approving the machines earlier this year. Proponents pitched the new form of gambling as a moneymaker that could help reopen Colonial Downs, boost the state’s horse industry and create state and local tax revenue. Gov. Ralph Northam signed the law in April, but he instructed state regulators to put “reasonable limitations” on the new machines.

Under draft regulations released by the Virginia Racing Commission, off-track betting sites in large localities like the city of Richmond could have up to 245 historical horse racing machines, but local officials could vote to allow up to 700 machines.

City Councilman Michael Jones, whose 9th District includes the former Kmart site, said he’s heard from several constituents concerned about what an off-track betting facility would do to the neighborhood.

“Several members of the community have a concern with this particular business coming in,” Jones said in an interview Monday. “The type of traffic. The type of business. The type of attention. Property values going down or being impacted by it. And then just basic crime.”

“You have that, but then again you still have individuals that own homes off of Midlothian Turnpike,” Jones said.

Jones said he’s asked city staff to review business zoning rules in South Richmond, but current zoning laws appear to allow the building to be used for off-track betting.

Richmond voters approved off-track betting in a 1992 ballot referendum, as did voters in neighboring Henrico County and a handful of other Virginia localities. Most of the state’s off-track betting facilities had closed by the time Colonial Downs closed its doors in 2014. But Chicago-based Revolutionary Racing, the ownership group that bought Colonial Downs  this year, wants to use historical horse racing machines to create a revamped network of up to 10 satellite betting facilities.

If the Racing Commission removes or alters the mechanism that allows some local control over how many historical horse racing machines to allow, Colonial Downs may not need formal approval from the city government to move forward with its plan for the Kmart site. If that provision remains in the state regulations, Colonial Downs would presumably have to convince the City Council to authorize more gambling machines. It’s not yet clear if the project would move forward if Colonial Downs is limited to 245 machines rather than 700.

The racing commission’s next meeting is scheduled for July 31.

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