Thursday, Jan. 21, marks the first anniversary of sports betting in Virginia, and we’ve learned a lot over the past 12 months of legal wagering.
Since FanDuel was first to market in 2021, 10 other sportsbooks have joined the mix. And others are on the way as Virginia continues building one of the nation’s most robust sports-betting markets.
After 12 months and approximately $3 billion in wagers, Virginia has seen plenty of success. But the market isn’t perfect, as we’ve learned through the ups and downs of the past year.
As VA sportsbook operators turn one year old this week, it’s the perfect time to take a deeper look into what’s working and what’s not in Old Dominion.
1. A first anniversary truth: As FanDuel learned, it’s good to be the first sportsbook.
Thanks to its partnership with the Washington Football Team, FanDuel became the first sportsbook to begin accepting legal wagers in Virginia. That heavily publicized headstart lasted just two days, and DraftKings and BetMGM subsequently launched on Jan. 24. But that headstart proved pivotal for FanDuel.
By the end of March 2021, FanDuel had processed an astounding 53% of all wagers despite six sportsbooks being active. By November, its market share had slipped to 42.7%. But for the time being, FanDuel shows no signs of giving up its No. 1 status.
2. Virginia has one of the largest US sports betting markets.
Within the next few weeks, we’ll have the official tallies for 2021 sports betting in Virginia. However, barring a massive letdown in December, Virginia should easily eclipse $3 billion in total sports wagers for the calendar year.
Virginia consistently ranks in the top 5 to top 10 among all US states in monthly sports betting handle. To get there, it tallied three consecutive months of record handle, from August-October, while Virginia also became the fastest US state to reach $2 billion in total wagers. VA sportsbooks experienced a small dip in betting volume in November. However, operators still posted record revenue of $48.3 million.
3. Virginia lawmakers were wise to create a competitive sports-betting market.
When Virginia lawmakers initially put together the sports betting legislation, they did a lot of things right. On the first anniversary of sports betting in Virginia, we now see a competitive market with multiple operators and lots of choices for customers.
There’s now a sportsbook for just about every type of bettor. Additionally, with lots of competition, Virginia bettors get to benefit with countless sign-up offers and ongoing promos.
More importantly, VA lawmakers made sports betting easy. Wagering isn’t limited to retail, in-person outlets such as casinos. There’s no required in-person registration at brick-and-mortar establishments just so you can play online. Additionally, betting is available statewide, not just in small geofenced areas as in Washington, DC. If you’re of legal age and want to place a wager in Virginia, you don’t need to leave your couch or your phone to do it.
4. As with promo spend and carryover, VA lawmakers weren’t perfect.
Despite Virginia lawmakers excelling in some parts of the sports-betting legislation, they weren’t perfect.
Even before Virginians placed their first legal sports bets in 2021, PlayVirginia wrote about the unfortunate decision to ban betting on in-state colleges and universities. We also paid special attention to Virginia’s decision to tax adjusted gross revenue (AGR) rather than gross gaming revenue (GGR), which has taken a chunk out of potential state revenue.
However, despite those missteps, VA lawmakers could fix both of the issues in 2022.
5. Speaking of competition, Caesars and BetMGM get points for creativity.
FanDuel and DraftKings were the first VA sportsbooks to begin accepting wagers. Perhaps not surprisingly, FanDuel (42.7% market share) and DraftKings (26.8%), the industry’s most recognizable brands, also now control more than two-thirds of the VA sportsbook market as we approach the first anniversary.
That dominance has forced Virginia’s other players to get creative. As a result, customers benefit. Take, for instance, BetMGM (17.8%) and Caesars (8.4%), which are the only other VA sportsbooks that have registered more than 2% market share. As those second-tier books look to gain ground, they’ve rolled out some absolutely killer promos for players over the past year.
Caesars, for example, was responsible for the year’s best promo. With just $100 in cumulative wagers, customers earned $150 toward an authentic NFL jersey. Now the sportsbook is offering the same deal with NBA jerseys.
Plus, Caesars’ daily “Super Boosts” are some of the best deals in Virginia.
6. Virginia’s biggest online sportsbooks spend big on promotions.
Virginia has a robust market with multiple operators. In theory, nearly a dozen sportsbooks currently have the opportunity to reign supreme.
In reality, though, the biggest operators spend mightily to maintain their perch on top. From Jan. 21 through Nov. 30, VA sportsbooks had registered $105.1 million in promo spending in the form of sign-up bonuses, free bets and other specials. Virginia’s four biggest operators were responsible for $97.8 million, or 93%, of the total spend:
- FanDuel: $23.5 million
- BetMGM: $24.4 million
- DraftKings: $23 million
- Caesars: $14.9 million
Barstool Sportsbook ($2.2 million promo spend for 2% market), BetRivers ($2.2 million, 1.1%) and WynnBet ($1.9 million, 0.7%) were the only other sportsbooks to spend at least $1 million.
7. Virginians prefer NBA and college basketball betting.
Nationwide, sports bettors dig football more than any other sport. It’s also immensely popular among Virginia bettors. However, the region has also proven a hotspot for hoops betting through the first anniversary of legal wagering.
In a recent Virginia Lottery Board meeting, we got a breakdown of sports wagers by type in 2021. Although we don’t yet have December’s numbers, which should include a flood of betting on college bowl games and the end of the NFL regular season, basketball is clearly making its mark. Betting on the NBA (21.5% of all wagers) and NCAA basketball (6.3%) account for more than a quarter of all wagers. And when including parlays that have at least one basketball leg, the total is likely even higher:
The nearby Washington Wizards likely contribute to the NBA betting interest. And if Virginia ever lifts its betting ban on in-state schools such as the University of Virginia and Virginia Tech, that college-basketball betting handle will undoubtedly increase, as well.
8. One out of 10 sports bets in Virginia is on tennis.
It seems that each US sports betting state has developed some type of popular niche interest. Perhaps the most obvious example is Colorado’s infatuation with table tennis betting.
Many of these second-tier sports and sports organizations rarely garner 1% of a state’s handle. In Virginia, for example, there’s been only modest interest in golf (1.6% of all bets), boxing (0.6%) and MMA (0.6%) betting. Even soccer (5.7%) and hockey (a surprisingly low 2.3%) have garnered lukewarm wagering enthusiasm in VA.
Tennis, on the other hand, has been a surprise hit in Old Dominion. As we approach the first anniversary of sports betting, Virginia has seen tennis account for 9.9% of all bets.
The ATP and WTA offer a steady stream of events and tennis betting options. Additionally, because the global sport often has matches taking place in non-primetime hours back here in Virginia, bettors have wagering options when more-mainstream sports aren’t active.
9. The ban on in-state collegiate betting remains shortsighted.
As good as the first year of Virginia sports betting has been, it could’ve been better. Possibly much, much better.
With Virginians unable to bet on in-state schools, the handle for college football and basketball has undoubtedly suffered. From the Richmond Spiders to the VCU Rams to the Liberty Flames, Virginia is a college sports destination. After all, it’s not like we have any pro teams for which we can pledge our allegiance.
On the face of it, the ban seems to protect college athletes. It probably also helped sports betting proponents to win over folks who were on the fence about legalizing wagering in the first place. But as we’ve seen in countless other states, college betting isn’t a gateway to corruption or scandals. And student-athletes aren’t put at undue risk. (After all, the University of Maryland just signed a deal with an actual sportsbook, PointsBet.)
As we enter Year 2 of sports betting in Virginia, it’s time for lawmakers to make the fix. They’re not protecting the sanctity of college sports; they’re simply annoying the bettors who are going to wager on the games, one way or another.
10. Retail sports betting could be a mere novelty in Virginia.
Although some states seem determined to prove otherwise, sports bettors clearly prefer the convenience of an online marketplace. In days long ago, sports bettors would have to physically travel to Las Vegas and then enter a casino and find the sportsbook and then hand over hard cash to place a wager.
Now, in states like Virginia, would-be bettors simply need to download an app and fund their accounts from their phones. Plus, with the growth of live in-game wagering, the online sportbooks offer options physical books can’t.
However, as soon as this year, Virginia sports bettors will have in-person betting options at the new casinos in Virginia. Those resorts in Bristol, Danville, Norfolk and Portsmouth promise to offer Vegas-like sports betting experiences. However, those brick-and-mortar sportsbooks will likely be little more than a novelty or a “nice to have” at those casinos.
As we’ve seen in other states, once bettors are used to the speed and ease of online betting, they rarely make the effort to do in-person wagering.