The future of a planned Henrico County gaming parlor has been given a boost, with Gov. Glenn Youngkin vetoing budget language that would have required a county referendum in order to open.

The proposed facility — called Roseshire — is planning to open a site at Staples Mill Shopping Center that includes up to 175 historical horse racing machines. Those machines use terminals similar to slot machines for users to bet on undisclosed, previously run horse races.

Renovations on the site are underway with the company having spent $5 million on the project so far. Roseshire is under the Rosie’s Gaming Emporium umbrella, while being owned by horse racing giant Churchill Downs.

Language in the state budget would have required voters in Henrico, and other Virginia counties, to approve new “pari-mutuel” or off-track betting sites, to be approved by a referendum before opening.

That language was one of eight line items to be vetoed by Youngkin, who amended 205 other items in the state budget.

The General Assembly can still override the veto with a two-thirds majority vote in both the House of Delegates and the Senate.

Henrico lawmakers say they were disappointed and confused by the governor’s decision to remove the referendum language.

Henrico Board of Supervisors Chair Dan Schmitt, a Republican whose district includes the parlor site, said he is baffled at the veto given support from bipartisan legislators.

“If I was a delegate or a state senator, I would never uphold this one,” he said. “I’m disappointed No. 1 because the bipartisan legislature supported this. This decision is to cast aside Henrico voters’ voices. It’s against the people’s voices.”

He said Churchill Downs was “allergic” to public input.

“It shouldn’t be controversial. To most people, it’s pretty damn simple. You can have your betting parlor, you just have to go through the same process a dentist goes through, or a Wawa,” Schmitt said. “You’re not special, and with today’s veto, they’re special.”

Roseshire became a publicly scrutinized project in July when eight state lawmakers blasted the proposal. A letter signed by six Democrats and two Republicans expressed opposition to the project, saying that it was harmful to the surrounding community and circumvented the voice of citizens.

Lawmakers have argued that permits for the building were submitted just days before Henrico approved a new regulation to require new historical horse racing sites be approved by a referendum.

Sen. Schuyler VanValkenburg, D-Henrico, pushed the legislation to require a referendum.

“In the end of the day, (Youngkin) chose to back an out-of-state gambling corporation over the citizens of Henrico,” VanValkenburg said. “I’m not really sure how you can read it any other way.

“All this was saying is that the people of Henrico, like other localities across Virginia, get to vote on whether we wanted to have a gambling establishment.”

In a Feb. 25 letter to Youngkin, obtained by the Richmond Times-Dispatch, VanValkenburg and former Republican Sens. Siobhan Dunnavant and Walter Stosch, urged the governor to keep the language in the budget.

“We want to be absolutely clear — that while we each may disagree on whether gaming should even be allowed, we are united in the opinion that citizens of Henrico deserve a voice in what occurs in their backyards,” they wrote.

Churchill Downs has maintained throughout the legislative fight that it broke no laws in applying for permits. It was later granted those permits by the county and can now build up to 175 machines by right.

Henrico staff and lawmakers never alleged that Churchill Downs did anything illegal. They have only highlighted the timing of its building permit submissions.

Another sticking point in the fight revolves around a 1992 Henrico referendum where voters approved off-track betting. That referendum has been the basis for allowing historical horse racing machines in the county.

People opposing the project say the 1992 vote was not targeted at modern-day horse racing terminals. It was meant to legalize betting on live horse racing across the state, they say, as a way to bring new revenue to Colonial Downs in New Kent.

“Even if you voted for (horse racing) in 1992, you didn’t vote for that,” VanValkenburg told residents at a public meeting about the project in December. “What we’re really doing is putting slot machines in neighborhoods.”

In a press gaggle on Monday afternoon, Youngkin told reporters that he opted to veto the requirement for a second referendum because it would set a bad precedent for business.

“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 said. “I just didn’t think that was appropriate. That is not the way we do business.”

The governor also noted that the company had eyed other sites in the county over the past few years.

Churchill Downs first met with Henrico to discuss a project in January 2024. In a memo for a follow-up meeting in March, the company wrote that it was “very much looking forward to — a potential larger investment,” per that initial conversation.

County Manager John Vithoulkas said Henrico never encouraged, and immediately asked the company to reconsider, a project at Staples Mill Shopping Center. He did, however, say the county may have considered a proposal to build a gaming parlor across the border from Scott’s Addition or in an entertainment district such as the recently defunct GreenCity plan.

“Had Colonial Downs gone to another site, then (Henrico) would not have said they needed a referendum,” Youngkin said.

The meeting Schmitt and VanValkenburg held in December was attended by about 200 people. The crowd was largely against the Roseshire project.

State Sen. Schuyler VanValkenburg, D-Henrico, and Henrico County Supervisor Dan Schmitt on Dec. 5 address residents about an incoming gambling spot at Staples Mill Shopping Center at Glenside Avenue and Staples Mill Road.

Schmitt said at the meeting that the county was approached by Rosie’s about a similar project several years ago, when it was still under the ownership of Colonial Downs.

The company tried to get a similar project off the ground in western Henrico before it proved to be unfeasible financially. Schmitt said the company then agreed not to build at another site when the county discouraged it from doing so.

“The county could have closed this loophole before,” Schmitt said. “But the relationship with Colonial Downs was great. When they sold to the Churchill folks, all of the rules of the game changed.”

Schmitt and VanValkenburg said they would continue to fight to overturn the governor’s veto through the General Assembly votes.