Caesars Virginia Cuts Back on Hotel Guest Rooms

By Jane Shaw Senior Editor Updated: 02/21/2024

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Caesars Virginia

It has been revealed that Caesars Virginia, which is set to debut in Danville later this year, has revised its initial plans for the number of hotel guest rooms. The company has cited rocketing construction expenses as the key reason for the reduction in rooms.

The $500 million project celebrated a major milestone in January, with a topping-off ceremony for the hotel structure. At that time, officials said that there were 320 rooms. This reflects a 36 percent decrease from the originally planned 500 rooms that were suggested when construction started in August 2022.

Soaring Construction Costs

While Caesars has not gone into too much detail regarding the reason behind the reduction in rooms, Danville City Manager Ken Larking claimed that the adjustment was down to the escalating costs associated with construction. Soaring inflation has significantly increased the cost of materials and labor in recent years. He said:

Construction costs have skyrocketed. They are tweaking [the design.] They’re focusing on other things, but in their estimates, it was best to reduce the number of rooms and save costs so that funding could go to other aspects of the project.

Danville was designated as one of the five casino host cities following the approval of state legislation in 2020. It saw Caesars emerge as the winner in a competitive bidding process for the casino project. There was overwhelming support for the project from local voters during the 2020 election, with nearly 70 percent supporting the venture.

Under Caesars’ host agreement with the city, a minimum investment of $400 million was pledged, along with commitments to provide at least 300 four-star guest rooms, 35,000 square feet of conference space, a 2,500-seat entertainment venue, and amenities such as a pool and spa.

On top of this, Caesars committed to employing a minimum of 1,300 people at a rate of $15 per hour. As part of the agreement, Caesars has paid Danville a one-time fee of $15 million and will pay a minimum of $5 million a year in local gaming taxes.

Casino Plans Remain the Same

Despite adjustments to the hotel room numbers, plans for the casino remain unchanged, according to reports. The casino will feature an anticipated 1,300 slot machines, 85 live dealer table games, a World Series of Poker room, and a Caesars Sportsbook.

Caesars Virginia has already been enjoying success with its temporary casino, which is situated adjacent to the ongoing construction site in Danville. Since it opened in May 2023, the provisional gaming facility has exceeded expectations.

The temporary facility boasts more than 800 slot machines and over 30 table games. It generated gross gaming revenue exceeding $147.3 million between May and December last year. As the host city, Danville received six percent of the gaming win, amounting to over $8.8 million during the casino’s initial seven and a half months of operation.

State taxes on gross casino wins are set at 18 percent of revenue, with rates rising to 23 percent for revenues exceeding $200 million a year or 30 percent for revenues exceeding $400 million.