Virginia Sports Betting Revenue Rises 64% After Tax Changes
VA Betting: Revenue Rise
The Virginia Lottery released the Virginia sports betting and online gambling update on September 1, 2022. As per the press release on sports wagering activity by VA licensed operators for July, 2022, the ‘handle’ went up 64% for the month compared to the previous year.
The report includes sports betting activity at the fourteen sports betting operators. Between July 1 and July 31, 2022, Virginian bettors wagered $266,001,583( called ‘handle). This is 64% higher than last July (2021) when only seven gambling operators were active.
Virginia bettors also won a total of $239,977,175 amount. It amounts to a combined 9.78% operators win percentage (called ‘hold). The tax amount was $1.87 million in June.
- Gross sports gaming revenue: $266,001,583
- Gross winnings: $239,977,175
- Allowed Betting Bonuses and Promotions: $396,903
- Other deductions allowed by law: $4,228,729
- AGR (Adjusted Gross Revenue): $21,398,776
- Total Tax received: $3,060,303.71
- General Fund Allocation (97.5% of AGR): $2,983,796.12
- Problem Gambling Treatment and Support Fund (2.5% of AGR): $76,507.59
Tax Changes for VA Betting Led to Tax Gains
Virginia sports betting law mandates a 15% tax on sports gambling activity on the AGR or adjusted gross revenue of operators. It is defined as ‘total bets’ (wagers) minus (-) winnings and allowed deductions. As a result, 8 sports betting operators in the state had a net positive AGR for the month of July. That net positive data contributed to $3.1 million in tax payments to the state exchequer.
When the state legalized sports betting in 2020, the legislation allowed the gambling apps to write off free bet promos given in new customer bonuses so that the business grew. But the state realized that the legal sports gambling activity was getting them hardly any revenue.
Beginning 1 July, 2022, the approved state budget ended that exemption. VA gambling apps deducted free bet promos of $8 million from June revenue. That number fell to $0.4 in July 2022. The tax revenue jump is about 63% from June to July.
From January to May, 2022, biggest tax paying operators were FanDuel, BetMGM VA, DraftKings, and Barstool. Rivers sportsbook, Unibet, Wynn, Caesars, Golden Nugget, Bally’s, PointsBet, and 888 were not required to pay tax in 2022 as per the Gaming Compliance update report dated 20 July, 2022.
