Old Dominion’s April numbers are out, and although they are predictably lower than March, we find that the handle for sports betting in Virginia was nearly $426 million in accepted wagers marking the eighth straight month in which the state has topped the $400 million mark.
Also, Virginia became the 9th state to surpass $10 billion in all-time sports betting handle since it began operations back in January 2021, courtesy of the $426 million handle it experienced in April.
The metrics reveal that April 2023’s handle was over 6.6% higher than April 2022 and the hold rate (win rate) was an impressive 10.6%, resulting in $45.1 million of gross gaming revenue for the month.
Old Dom Going Strong
The upward trend in April of this year over April 2022 is illustrative of a brisk 2023 in which the $157.1 million in adjusted gaming revenue over the first four months of this year is over 156% higher than the same period last year.
Virginia imposes a 15% tax on adjusted gross revenue (AGR) which is the gross gaming revenue (GGR) minus promotional deductions. In April, we saw that the $45.1 million in gross gaming revenue equaled $38.9 million in adjusted gaming revenue which meant the state of Virginia’s tax coffers were enhanced by $5.8 million.
Promotional Deductions Sunsetting
Since the beginning of the year, sportsbook operators have paid over $24 million in taxes. And more importantly, many of the sportsbooks that are eligible for taking deductions will not be allowed to do so after they have been operating for more than 12 months in the market.
The absence of deductions will increase the take for the state, although sportsbook operators insist it will force them to curtail their promotional activities, thus limiting their outreach for wooing new customers into the fold, ultimately diminishing their earning potential, and thus that of the state.
12-Month Eligibility Rule and Tax Distribution
The four online sportsbooks reportedly still eligible to deduct promotional bonuses, and free play wagers, are Betway, SI Sportsbook, Betfred, and bet365. However, it is believed April was the last month of eligibility for the first two, Betway and SI Sportsbook, because it would have marked the one-year anniversary of both online platforms going live.
This 12-month eligibility rule was an amendment signed into law by Governor Glenn Youngkin before this fiscal year began back in June of 2022. The law expressly disallows sports betting operators “from excluding bonuses or promotions used to encourage betting from their adjusted gross revenue 12 months after they begin sports betting activity in Virginia.”
Del. Mark Sickles was the legislator driving the amendment home and stated, “I consider this a technical correction.” However, the 15% tax rate charged to sports betting operators on their adjusted gross revenue remained the same and so did the distribution of funds.
The state’s general fund earns the lion’s share of the taxes collected at a whopping 97.5% while the Problem Gambling Treatment and Support Fund administered by the Virginia Department of Behavioral Health receives the remaining 2.5%.
Calculators
