The Virginia Lottery released its first report on sports wagering activity submitted by licensed operators for the month of January. Legal sports betting launched in Virginia on Jan. 21, and the report covers the activities of four licensed sportsbook operators.
Between Jan. 21 and Jan. 31, 2021, Virginians wagered $58,896,564 (“handle”) and won $55,310,487, for a combined 6.08% win percentage (“hold”).
Betfair Interactive US, LLC (FanDuel) in partnership with the Washington Football Team launched its Virginia sportsbook on Jan. 21. Crown Virginia Gaming, LLC (Draft Kings) and BetMGM, LLC were awarded permits on Jan. 24. Portsmouth Gaming Holdings, LLC (Rivers Casino Portsmouth) received its permit on Jan. 26, and Caesars Virginia, LLC was granted a permit on Jan. 27 but chose to launch in February. The Virginia Lottery anticipates additional sports betting operator permits to be awarded in the coming days.
State law places a 15% tax on sports betting activity based on each permit holder’s adjusted gross revenue (AGR), which is defined as total wagers minus total winnings and other authorized expenses. Virginia’s statute allows operators to deduct their customer acquisition costs from AGR, and operators reported $6.3 million in bonuses and incentives in January to inform interested players about the launch of legal online sports betting in Virginia.
January 21 – 31, 2021
• Gross sports gaming revenues: $58,896,564
• Gross winnings: $(55,310,487)
• Bonuses and Promotions: $(6,343,077)
• Other deductions $(478,612)
• AGR (Adjusted Gross Revenue): $(3,235,612)
These initial promotional expenses, combined with the limited number of operators and the limited number of days in the initial reporting period, resulted in negative AGR for three of the four operators in January.
• Total Tax: $39,710.31
• General Fund: $38,717.55
• Problem Gambling Treatment and Support Fund: $992.76
Following the successful launch of Virginia’s sports betting program, it is anticipated that bonuses and promotional expenses tied to customer acquisition will decline considerably, increasing AGR and tax revenues to a more sustainable level.
Of the 15% tax on sports betting AGR, the statute specifies 97.5 percent is to be deposited in the state’s General Fund and 2.5 percent is to be deposited into the Problem Gambling Treatment and Support Fund administered by the Virginia Department of Behavioral Health.
About Virginia Lottery
The Virginia Lottery is responsible for the regulation of sports wagering in the Commonwealth of Virginia. Monthly financial reports and other important information about legal sports wagering is posted at www.valottery.com/casinosandsportsbetting.