As the NFL season approaches the biggest sports betting event of every year, the Super Bowl, Virginia just celebrated its second anniversary of legal sports betting in the commonwealth. Online Virginia sportsbooks began operations on Jan. 21, 2021.
That month, Virginia became the 21st U.S. jurisdiction to go live with sports wagering, less than a year after its legalization in April 2020.
FanDuel Sportsbook Virginia was the first online mobile operator to go live in the commonwealth on Jan. 21, 2021, through a partnership with the then-Washington Football Team, now Washington Commanders. Since then, bettors have wagered over $7 billion across 14 operators licensed in the state.
FanDuel led the charge in sports betting once again in 2022 for Virginia, holding 41% of the market share between January and November, according to the Virginia Lottery. December 2022 adjusted gross revenue and handle dollars were not available at press time.
Looking back on 2022, Virginia sports betting dollars broke a number of records, new online/mobile operators joined the market, new state laws changed the way taxes are collected, and the first retail sportsbook was introduced.
Highlights From Virginia Sports Wagering Dollars
October and November were big months when Virginia sports betting broke records in handle, adjusted gross revenue (AGR), and taxes paid to the state.
Sports wagering hit an all-time high in October, as VA sports betting apps combined for more than half a billion dollars in handle in one month for the first time. The handle is the total amount of dollars bet in one month.
October's handle came in at over $528 million. That beat the old record of more than $485 million in January 2022. In a year-over-year comparison, the handle was 23.6% higher than in October 2021 ($427.32 million).
November broke two records for the 2022 year of sports wagering. The Virginia Lottery reported adjusted Gross revenue (AGR) for November of $52.8 million, breaking the record of $48.3 million set two months earlier in September.
That figure from the Virginia November betting revenue report was a 76.5% increase from November 2021 ($29,926,697). But that wasn't the only record broken in November.
November sports betting provided $7.7 million in taxes paid to the state's coffers, up 83.8% from November 2021 ($4,233,167). The previous record was $7.2 million set in September.
Virginia also experienced the expected annual slowdown during the summer, repeating a pattern from all states with legal, regulated sports wagering. The lowest handle for 2022 was recorded in July at $266 million, while February provided the lowest AGR of $7.8 million, and only $1.4 million in taxes paid to the state. But changes needed to be made in tax collections.
State Amends Law To Close Tax Loophole
An amendment passed by Virginia lawmakers in June 2022 was put forth to close a loophole that allowed sports betting operators to avoid paying millions of dollars in taxes to the state from online sports gambling.
Before the June amendment, companies were allowed to deduct certain Virginia sportsbook promotions expenses from their pre-tax revenues. Among those expenses are “free bets” offered to players to entice them to sign up or continue wagering.
The freebies ultimately negated as much as 43.7% of the revenue Virginia’s government could tax, or a potential $26.7 million in collected tax revenue.
The new amendment, known as Item 494 #2C, written into the state budget, said sports betting companies “may exclude from adjusted gross revenue the value of allowable bonuses or promotions provided to bettors as an incentive to place or as a result of their having placed Internet sports betting wagers.”
But, once past the first 12 months of sports betting activity in Virginia, the companies are prohibited from excluding from adjusted gross revenue any bonuses or promotions provided to bettors, the new budget states.
“This change will positively impact general fund revenues (for the state),” the budget amendment said. But a new bill introduced this month may restore some tax advantages to the online sports gambling industry.
Known as Senate Bill 1142, the new bill sets out a time schedule regarding how much exclusion operators would be entitled to, beginning July 1, 2023, and extending through and beyond July 1, 2026.
The proposed bill was introduced by state Sen. Jeremy S. McPike. It was pre-filed on Jan. 10 and offered on Jan. 11. It has been referred to the Committee on Finance and Appropriations.
Mergers and Acquisitions In Congested Market
More than 30 U.S. states, plus the District of Columbia, have legalized some form of sports betting, either online or in-person retail or both. So there are some expected questions about who will make it in the market.
Concerns over customer acquisition cost and player retention are essential in an already congested gambling sector like sports betting. Acquisitions and mergers are bound to happen over time.
In May 2022, Golden Nugget Online Gaming announced it would discontinue the operation of its online sports betting service in Virginia due to the company being acquired by DraftKings, which operated the Virginia DraftKings Sportsbook.
“The combined company will offer a single sportsbook brand in Virginia — which will be the DraftKings Sportsbook,” Golden Nugget said in an email to customers in May.
DraftKings set forth to integrate Golden Nugget Online Gaming employees across its businesses.
The two companies announced in August 2021 that they had entered into a definitive agreement for DraftKings to acquire Golden Nugget Online Gaming in an all-stock transaction valued at approximately $1.56 billion.
Options For Virginia Sportsbook Operators
Virginia has 13 online/mobile sportsbooks available to its estimated 8.6 million residents: FanDuel (41.08% market share), DraftKings (23.06%), BetMGM Virginia Sportsbook (18.30%), Caesars Sportsbook (7.87%), Barstool Sportsbook (3.91%), PointsBet (2.42%), BetRivers (1.16%), WynnBET (0.92%), Hard Rock Sportsbook (0.84%), Unibet (0.18%), Bally's Bet (0.11%), SI Sportsbook (0.07%) and Betway (0.06%). Golden Nugget (0.02% market share) still holds a license in Virginia but has discontinued operations.
Three mobile sportsbooks joined the Virginia market in 2022: Hard Rock Sportsbook launched on March 31, SI Sportsbook Virginia launched on May 9, followed by Betway Sportsbook on May 18.
Bet365, a huge global gambling brand based in England, was awarded a temporary permit from the Virginia Lottery on Aug. 15 but has not gone live yet in the state. The same can be said for Betfred Sportsbook, which was granted a license in December.
Virginia Casino Scene Growing
In July, Hard Rock International opened the first land-based casino in Virginia, Bristol Casino. The temporary casino includes the first retail sportsbook for Virginia, Hard Rock Sportsbook.
The first permanent casino in the state, Rivers Casino Portsmouth, opened last week. The facility includes a retail BetRivers VA Sportsbook.
According to the Virginia Lottery, pro basketball was the leading sport for betting from January to November 2022, with 22.3% of wagers. Football was second at 15.8%, followed by tennis at 12% and baseball at 11.8%. College basketball was counted as a separate category and accounted for 5.6% of wagering, meaning that more than a quarter of all bets were placed on either pro or college hoops. Parlay betting was counted separately and accounted for 20.7% of wagers.
There are no Virginia online casinos available right now.
Look for the best Virginia sportsbook promos for your sports wagering interests at BetVirginia.com.
