The odds are stacked against free enterprise in Virginia

Armstrong Williams | 4/23/2020, midnight
As we continue weathering the coronavirus pandemic, some forward-thinking states and their leaders are preparing a pivot that puts their ...
Armstrong Williams

As we continue weathering the coronavirus pandemic, some forward-thinking states and their leaders are preparing a pivot that puts their people back to work. And then there is Virginia, which appears poised to pursue short-sighted business decisions that will ultimately cost jobs, tax revenue and respect.

A landmark bill to bring casino gaming to Virginia is awaiting signature by Gov. Ralph Northam. Northam is perhaps best known on the national stage for his controversial yearbook photo showing two men: one in blackface and one in a Ku Klux Klan robe.

While Northam apologized for the photo amid calls from his own state’s Democratic Party to resign, saying he appeared “in a costume that is clearly racist and offensive,” he later backtracked and claimed it wasn’t him.

Regardless of persisting questions about his judgment, Virginians are presently waiting to see whether he will accept or reject a dubious bill that would bestow benefits upon a chosen few to the detriment of the state and its economy. It makes for a fascinating political and financial case study, one in which a Democratic governor receives on his desk a bill from a Democratic-controlled legislature with apparently no qualms about unabashedly foregoing free market principles and American capitalism.

As standard practice, when casinos are allowed to be built and operated within a state, this comes about as the end result of a transparent and competitive bidding process for gaming licenses. The logical rationale from the state’s perspective is that licenses should be awarded to trusted operators provided they have the ability to deliver. States also typically want to ensure the best possible financial terms so that they can create jobs and produce maximum revenues in the form of various taxes.

The difference between a good deal and a bad one is significant, translating into the difference in hundreds of millions of dollars for the state. The pending gaming bill in Virginia comes ready-made with irregularities that could guarantee that Virginia ends up losing big.

In effect, state lawmakers have completely bypassed the crucial step of an open bidding process. Instead, they have declared that they will award preferential treatment to casino operators who will secure sole-sourced contracts in the absence of competition.

Such sweetheart deals smack of cronyism and evoke images of shady deals concluded behind closed doors, as opposed to a fair competition in the public eye for all Virginians to see. It’s a cynical betrayal of the very principles that have propelled our nation to become the most powerful economic force in the world. This process also does little to dissuade disillusioned Americans, who routinely find their own needs come second to insiders employing droves of lobbyists to secure the access that lines their pockets.

And who exactly will benefit the most from preferential treatment? The highly controversial Pamunkey Indian Tribe, whose racist constitution formally forbade marriages between its members and African Americans. The Pamunkey Indians may have zero experience when it comes to constructing and running entertainment or gaming complexes of any size, yet they have a lock on a staggering 40% of the state’s coveted licenses.