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Virginia’s Sports Betting Success Surpasses $1 Billion Milestone
Published 5:40 pm Monday, September 18, 2023
In a recent development that underscores Virginia’s growing prominence in the sports betting landscape, licensed operators submitted their May 2023 sports betting activity report to the Virginia Lottery. The official unveiling of this report revealed an impressive achievement: Virginia’s gross sports betting operator income had surged past the remarkable $1 billion mark.
This achievement positioned Virginia as the seventh state in the United States to achieve such a feat in the era following the repeal of the Professional and Amateur Sports Protection Act of 1992 (PASPA). This significant milestone arrives on the heels of the Virginia Lottery’s announcement that sportsbooks within the state had generated a substantial $48.1 million in gross income for May.
A Year-on-Year Growth in Wagering Activity
Delving into the specifics of the report, a notable trend emerges when comparing the wagering activity of May 2023 to the same period in the previous year. Analyzing the betting data for the period from May 1 to May 31, 2023, the total amount wagered by Virginians, referred to as the “handle,” reached an impressive figure of $403,719,160.
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This figure represents a significant increase of 14.9% when contrasted with the betting activity recorded in May of the preceding year. Furthermore, the cumulative earnings for Virginia’s bettors from both the best Virginia betting sites and brick-and-mortar gambling establishments amounted to $355,574,610, translating to a combined operator winning percentage, or “hold,” of 11.93%.
Navigating Virginia’s Sports Betting Tax Landscape
Virginia’s approach to sports betting is characterized by its tax framework. The state imposes a 15% tax on sports betting activities, a tax calculated based on each permit holder’s adjusted gross revenue (AGR). The AGR, in turn, is calculated by subtracting total winnings and authorized deductions from the total wagers.
Under the provisions of the AGR sports wagering tax, a substantial 97.5% of the tax revenue is directed to the state’s General Fund, with the remaining 2.5% allocated to the Problem Gambling Treatment and Support Fund, overseen by the Virginia Department of Behavioral Health and Developmental Services. Impressively, a total of 11 Virginia operators reported a net positive AGR for May, contributing a cumulative tax payment of $6.3 million for the month.
Virginia’s Journey to Success: Legalization to Achievement
Virginia’s ascent to this significant sports betting milestone is a testament to the swift progress since the official legalization of betting in the state. Joining the ranks of prominent states such as New York, New Jersey, Illinois, Nevada, Indiana and Pennsylvania, Virginia’s achievement of crossing the billion-dollar threshold in sports betting revenue marks a momentous accomplishment.
The journey from legalization to achievement has spanned a mere 29 months, underscoring the enthusiasm of Virginians for sports betting and the industry’s growth potential within the state.
Consistency in Bettor Engagement
A remarkable aspect of Virginia’s sports betting ecosystem is the consistent engagement of its bettors. With an enduring hold on over $10.4 billion in the handle, Virginia’s operators have consistently maintained a win rate of 9.1% or higher for an impressive span of 10 consecutive months.
The month of May witnessed the acceptance of $403.7 million in bets, aligning with a nationwide trend that contributed to a commendable 11.9% hold for Virginia. This consistency in double-digit holds over the course of three months positions Virginia at the 12th spot among the 25 states that have released similar statistics.
The Taxation Landscape and Its Implications
Virginia’s strategic implementation of its 15% tax rate has yielded substantial results, infusing the state’s treasury with $42.5 million in adjusted gross income.
This upward trajectory in tax revenue can be attributed, in part, to a pivotal budget amendment in the previous year. This amendment significantly curtailed deductions for promotional credits offered by operators, resulting in a substantial increase in tax revenue observed for both fiscal 2023 and the initial five months of the current year.
Virginia’s Tax Earnings Surge Ahead
The fiscal prowess of Virginia’s sports betting industry is underscored by a notable increase in tax earnings. Over the first 11 months of fiscal year 2023, the state’s sports betting tax revenue surged by an impressive $67.1 million.
Additionally, the first five months of 2023 saw the collection of $30.5 million in tax receipts, surpassing the pace set in the previous year by a significant margin of $17.2 million. This surge in tax revenue has positioned Virginia at the ninth spot nationally in terms of tax earnings, highlighting the state’s effective utilization of its sports betting framework.
Contributing Factors to Virginia’s Tax Success
The remarkable growth in tax revenue is attributed to various factors, including the state’s astute implementation of taxation policies and amendments. Notably, Virginia accumulated $35.5 million in tax receipts within the first 18 months of legal wagering before the implementation of the budget amendment in July.
This legislative adjustment played a critical role in propelling Virginia’s tax revenue to new heights, reflecting the state’s proactive approach to optimizing its sports betting ecosystem.