Who is Jon Yarbrough?
Jon Yarbrough is the Tennessee billionaire that is loaning the Pamunkey money at high interest rates to build the casino. No one seems to know anything about him, including the City.
What do we know about Yarbrough? Why did the city pair up with him?
Not Much for Philanthropy
As of October 2019, Yarbrough was No. 370 on the Forbes 400 richest Americans with a fortune estimated at $2.2 billion. In the same list, he received the worst “philanthropy rating” with a 1 out of 5. Forbes decides how charitable a billionaire is by figuring out the portion of a fortune donated to charity.
Yarbrough’s foundation only gives away about $500,000 per year on average, with a high of $1.2 million in 2018. Before that, it gave a few hundred thousand here and there. In 2008, the foundation gave grants and gifts for a total $15,000. In the federal tax returns of the foundation, Yarbrough goes so far as to itemize gifts of just $30 or $40.
Yarbrough paints himself as someone who is interested in helping the struggling Pamunkey tribe, but since 2006, his foundation has given less than $1 million to American Indian causes.
In fact, most of his gifts lately have been going to the Battle Ground Academy, a private, mostly-white school in Franklin, TN where both his children went. Tuition there is currently $25,000 a year.
Racial Discrimination Cases
There have also been cases of racial discrimination related to his company, VGT:
- 2006-CV-323, Northern District of Oklahoma, Ruth A. Mathews vs VGT
- 2006-CV-481, Northern District of Oklahoma, Joyce Santacruz vs VGT
In one, a black woman claimed she was subjected to derogatory racial comments such as employees referring to meetings as ‘all-white’ only as well as referring to Brazil nuts as “nigger toes.” On one particular occasion a male supervisor stated that the only reason he wouldn’t fire her was because he was “F__ing her.” Despite reporting these incidents to upper management repeatedly, no action was taken. She was terminated instead. The company settled.
In the other case, a Hispanic woman claims she was terminated because she testified on behalf of an African-American co-worker who filed a discrimination charge against VGT with the EEOC. See attached.
On an October 16 recording, Mayor Alexander said “I’ve never met Jon Yarbrough. Never spoke to him on the phone. Don’t know him.”
WE DEMAND TO KNOW HOW THE CITY VETTED YARBROUGH, IF AT ALL.
On October 7, the City of Norfolk replied to a request for records reflecting consultation between the city and local military officials on the impacts of the proposed casino on military populations.
The city’s response: No consultations, discussions or other activities have occurred between the City of Norfolk and its representatives and any representatives of local military commands on the affects of the casino on the military population.
The City established an entire office dedicated to conducting liaison with area military commands. A 2019 Military Times article notes up to 56,000 active service members, or 4.1% of the total force, meet the criteria for gambling disorder — presenting additional risks to financial health, readiness, security risks, suicide, and other mental and behavioral health concerns.
So as the city planned to place a multimillion dollar casino in the middle of a military community hosting about 83,000 active military members, plus the supporting civilians, reservists, and family members, wouldn’t it be fair to expect the city to liaise with area military commanders to determine impacts on military readiness, security, and force availability? Especially since the city hired a well-paid member of the city’s senior executive team for this very purpose?
The city’s approach: “No consultation, discussions, or other activities have occurred…” Nothing. Not a word.
Add this to the list of concerns regarding the city’s lack of due diligence on this project. This particular aspect is shameful in the manner with which it breaks faith with the military community. Vote NO on this casino deal.
The following is a letter to the Virginian Pilot editor by James V. Koch dated February 2, 2020:
Anyone tuned into the political scene is aware that state and local officials are eyeing the additional tax revenues they believe casino gambling might bring to their cities and the commonwealth.
No matter that the respected Joint Legislative Audit and Review Commission, which conducts program reviews and policy analyses for the General Assembly, reports that the economic impact of casino gambling might be very small. Indeed, my conversations with JLARC personnel reveal that JLARC personnel agree that slightly different (and probably more realistic) assumptions might cause the economic impact on Virginia to be zero.
Let’s look at some of the issues. First, JLARC’s conclusion is based heavily on a consulting report that assumed zero expenditure displacement. This means that a dollar spent by an individual patronizing a Norfolk or Portsmouth casino is assumed to not reduce his/her spending in the rest of the community by so much as a single penny.
Alas, not even Harry Houdini can spend the same dollar two places. When community spending is reoriented toward the casinos, already struggling regional businesses such as those in MacArthur Center and restaurants along High Street in Portsmouth are likely to suffer. Some will go belly up. The consulting report does not reduce its estimates of jobs created by the number of jobs that will be lost in existing local businesses.
Second, the consulting report does not appear to take full account of the impact that multiple casinos will have on the gaming revenues received by any individual casino. It is logical that the gaming revenues enjoyed by Portsmouth will suffer if Norfolk also opens a casino (and even more so if Hampton and Richmond join the parade). The commonwealth may not care about this because state tax collections would not suffer. But it would definitely reduce the tax revenues each city can earn.
The consulting firm also did not take full account of the reality that revenues at the largest casinos in surrounding states typically tail off several years after their newness wears off. For example, total gaming revenue in Maryland Live! peaked in 2016 at $653.2 million and fell to $576.6 million in 2018. Meanwhile, at Horseshoe Baltimore, gaming revenue also peaked in 2016 at $324.3 million, but was only $259.9 million in 2018.
In West Virginia, the older Charles Town facility’s gaming revenue peaked at $541.9 million in 2011 and by 2018 had fallen to only $303.7 million.
The moral to this revenue story is that even casino gambling becomes old hat after a period of time. The expansion of mobile betting via the Internet is accelerating this. We should expect each city’s casino-related tax receipts to decline significantly after several years.
The report also pays no attention to the regressive redistributive effects of casino gambling — proportionately, it extracts more income from the pockets of lower income households than from more wealthy ones. Political progressives ordinarily oppose such things.
Nor is any attention given to the incremental fiscal burdens (policing, social costs) the casinos will generate. Perhaps the consulting firm was not asked to assess these costs, but even a casual glance at gambling sites such as Las Vegas suggests these local costs are substantial.
We should recognize casino gambling for what it is — a tax increase. It represents a relatively painless way for the commonwealth and the cities to extract more revenue from the citizenry. This is that rare tax that a segment of the population will enjoy paying.
Let me end on a positive note. The recent announcement by the city of Norfolk that its proposed casino will be “commercial” implies that the Pamunkey Tribe and its financial supporters will pay all the costs of developing and operating the casino as well as related infrastructure costs. Norfolk apparently will invest zero. If so, then this represents a major improvement over previously advertised proposals.
James V. Koch is Board of Visitors Professor of Economics Emeritus and president emeritus at Old Dominion University. Contact him at email@example.com.
Delegates Jay Jones and Sen. Lynwood Lewis recently asked for clarification on contributions made to our committee.
We welcome it.
We did the process of going through the State Board of Elections for that very reason: transparency.
The story here is not who pays for our yard signs or the ethics of the other committee.
It is the substandard deal and location. We are advocating for informed citizens. This has been going on for a year. We have no new talking points.
Read about the bad deal.