Virginia sports bettors drove handle to more than $3.2 billion in the first year for mobile and online sports betting, according to data from the Virginia Lottery.
Transformative changes to the state’s gaming enterprise could be on the horizon, though. If legislation currently under consideration by lawmakers in Richmond is passed and ultimately approved by Republican Gov. Glenn Youngkin, who took office last month.
Among the changes being considered would be the creation of a Virginia Gaming Control Board (VGCB) or a similarly-named entity that would function as a unified gaming commission and assume regulatory authority over all forms of gaming in the state.
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December Handle Was Almost New Record for VA
According to the state’s current regulatory agency, the Virginia Lottery, the handle totaled $3,221,790,714 during the first year of legal online sports betting in the Old Dominion.
The highest month for handle proved to be October ($427.2 million), when college football and the MLB playoffs were active and NBA and NHL action started mid-month. December, which got a boost from the college football bowl season and the final weeks of the NFL season, was second in handle at $426.6 million.
According to the Lottery, the 11 active sportsbooks in the state collectively generated $10.1 million in adjusted gaming revenue in December, down from the record $29.9 million grossed one month earlier. For the year, operators made $130.9 million.
The regulator does not separate revenue data for each operator in its reports. The 11 operators that are currently live are Bally Bet, Barstool Sports, BetMGM Sports, BetRivers, Caesars Sportsbook, DraftKings Sports, FanDuel, Golden Nugget, Unibet, WynnBET, and PointsBet, which just launched in December through a partnership with Colonial Downs racetrack. Betway and 888’s SI Sportsbook are expected to launch in Q1 2022.
Tax revenue in December totaled $1.7 million, down from a record $4.2 million in November. Tax revenue for the full year totaled $20.3 million.
Operators spent $17 million on bonuses and promotions in December. During the course of the entire year, they spent just under $122.1 million on such costs, which are tax exempt.
For now…
Big Changes Could Be Coming for the Commonwealth
Among the gaming bills under consideration by the Virginia General Assembly is House Bill 1103, which would prohibit sportsbooks from excluding bonus and promotion costs from their taxable revenue after the first 12 months of accepting wagers.
We need this. We’ve added different kinds of gaming — it’s time to have the ‘one ring to bind them all,’ with multiple types of gaming [under] a single agency or commission. But we’ve got to get the ball rolling.
HB 1103 would also eliminate a provision that allows operators to carry losses over month-to-month for tax purposes. It was introduced by Del. Mark Sickles (D-Franconia) and referred to the House Committee on General Laws (GL) on January 12. The bill was subsequently assigned to Subcommittee #3 on January 26.
Meanwhile, Senate Joint Resolution 24, introduced by Sen. Bryce Reeves (R-Fredericksburg), calls for the formation of an eight-member joint subcommittee with the House of Delegates. The subcommittee would be tasked with conducting a one-year study to determine whether a “unified gaming commission” should be established in Virginia.
The proposed subcommittee would include two members of the Senate Committee on General Laws and Technology (GLT), the Senate Committee on the Judiciary, the House Committee on General Laws (GL), and the House Committee for Courts of Justice.
Although SJ 24 was introduced on January 11, 2022, and referred to the Senate Committee on Rules, lawmakers held a voice vote on January 28 to continue the measure until 2023. It was unclear if that meant the Senate was proposing to leave the state’s current gaming regimen unchanged for at least another year, possibly two.
Reeves told US Gaming Review on Thursday that the state’s Joint Legislative Audit and Review Commission (JLARC) “will study the complexity and best practices to integrate a commission to regulate and enforce our complex gaming entities.
“Several of us in a bipartisan, bicameral effort have already started that process, even though legislation has not been presented this year. My colleagues and I are waiting until the reforms are passed that clean up charitable gaming.”
House Joint Resolution 63, a companion bill to SJ 24, was introduced in the House of Delegates by Del. Paul Krizek (D-Alexandria) and referred to the House Committee on Rules on January 11. HJ 63 has subsequently been assigned to the House Subcommittee for Studies, where it remains currently.
Both SJ 24 and HJ 63 are the result of a study conducted by JLARC in 2019.
“Expanded gaming would be a major new undertaking, even if oversight and administration were assigned to the Virginia Lottery,” JLARC said at the time. “The state could also consider creating a stand-alone agency to regulate expanded gaming.
“Regardless of whether Lottery or a stand-alone agency were to oversee and administer expanded gaming, this oversight would be a major new undertaking for the state, costing at least $16 million annually. VA Lottery’s existing leadership and administrative structure may provide some limited economies of scale … however, the majority of Lottery staff perform roles specific to lottery and would not offer any economies of scale for overseeing casino gaming.”
Tennessee recently made a similar change, elevating the Sports Wagering Advisory Council (SWAC) to become the state’s regulator for online sports betting. SWAC took over from the Tennessee Education Lottery Corporation, which still runs the state lottery.
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Virginia’s current regulatory setup for gaming involves three executive branch agencies — Virginia Lottery, the Department of Agriculture and Consumer Services (VDACS), and the Virginia Racing Commission (VRC). VDACS oversees charitable gaming, while the VRC manages horse racing in the state.
Krizek told US Gaming Review that he thinks HJ 63 “stands a good chance of passage,” but said that even if it didn’t, JLARC has already made plans to conduct further research and recommendations into the issue — and would likely be done by 2023.
Having a unified gaming commission “is definitely something that the whole General Assembly is working toward,” Krizek said. “We need this. We’ve added different kinds of gaming — it’s time to have the ‘one ring to bind them all,’ with multiple types of gaming [under] a single agency or commission of some sort. But we’ve got to get the ball rolling.”
Also under consideration are:
- Senate Bill 96 — would prohibit sports betting and casino operators “from using the name of Virginia or the Commonwealth in an advertisement in association with its product or service.” Violators would be subject to a fine not to exceed $50,000. The bill was introduced by Sen. Thomas Norment Jr. (R-Williamsburg) and referred to the Senate GLT Committee on January 5, 2022. It was assigned to the Gaming Subcommittee on January 26.
- Senate Bill 576 — would allow wagering on Virginia colleges and universities, excluding props bets. SB 576 was introduced by Sen. T. Montgomery “Monty” Mason (D-Williamsburg) and referred to the Senate GLT Committee on January 12, 2022. It was subsequently assigned to the Gaming Subcommittee on January 26.
- House Bill 1127 — a companion bill to SB 576, it was introduced by Del. Schuyler VanValkenburg (D-Richmond) and referred to the House GL Committee on January 12. It was assigned to Subcommittee #3 on January 26. The subcommittee recommended tabling HB 1127 on February 1, likely dooming its prospects.
It was unclear if Youngkin, who took office on January 15, would ultimately sign the bills into law. Gaming was a non-issue during a bruising campaign against former Democratic Gov. Terry McAuliffe in 2021.
