Virginia Sports Betting Revenue
Now that sports betting is up and running in Virginia, there is the important matter of keeping track of how the business is doing. The Virginia Lottery is responsible for releasing monthly revenue figures from both online and retail sportsbook action. Key numbers in this report include:
Handle: The handle is the amount of money wagered across all sportsbooks. So, if the total handle for a month is $100 million, that means collectively the sportsbooks accepted $100 million in wagers.
Revenue: Revenue in sports betting is a little different than the business term revenue. Gross gaming revenue (GGR) represents the amount of money left from handle after sportsbooks pay out bets for the month. If, of the $100 million in bets, sportsbooks paid out $92 million to winners, the GGR, also known as hold, would be $8 million.
There is another category of revenue called adjusted gross revenue (AGR). This number represents the GGR minus deductions like the federal excise tax (which is .25% of handle) and promotional dollars given out in the form of deposit bonuses or free bets. In Virginia, sportsbooks make these deductions, and then the amount left is the number taxed by the state.
Taxes: The tax rate for sports betting in Virginia is 15% on AGR. Of that, 97.5% of the tax dollars go into the General Fund while the remaining 2.5% is earmarked for problem gambling support.
All-time Virginia sports betting numbers
Here is a look at the topline numbers from VA sports betting:
Total sports betting handle in VA history
Total sports betting revenue in VA history
Total sports betting taxes to date for VA
Tax money set aside for responsible gambling programs
Latest Sports Betting Revenue Reports
August 2022 Virginia Sports Bets Bring in $284.7 Million
August 2022 Virginia sports bets came in at $284.7 million, according to a Friday update from state regulators. The total is up 7% from July.
July 2022 Virginia Sports Bets Fly Past 2021 Totals
July 2022 Virginia sports bets hit $266 million, which is up from a year ago. Fall is the busy season for the VA sports betting industry.
Lifetime Virginia sports betting numbers
Last updated: April 1, 2022
|Month||Handle||GGR||Hold %||Promos||Other deductions||AGR||Taxes|
Where does Virginia sports betting tax money go?
And here is a breakdown of where the tax money goes, including how much is set aside for problem gambling support:
|Time Period||Taxes collected||Money to General Fund||Money for Problem Gambling|
Virginia sports betting: How much money will be bet annually?
The top-line number is the one that gets headlines in the growing US sports betting industry. Some states are already seeing billions wagered on a monthly basis; tens of billions have been bet on sports in the US since the fall of the federal ban in 2018.
With that being the case, we are guessing that Virginia could reach more than $7 billion dollars in annual handle, with perhaps as low as $6 billion or less on the low range of outcomes, at market maturity. The $7 billion figure would not happen immediately but instead years down the road when Virginia online sports betting verges on maturity.
How do we get there?
Virginia sports betting vs. NJ sports betting
First we look to other states to see what they have done. However, keep in mind, no state has reached maturity for online sports betting, not even Nevada, which has grown with online betting slowly over the years. And the COVID-19 pandemic resulted in the shutdown of US sports for part of 2020, making it even more difficult to project what a mature and robust market would look like.
The best thing we can do is look to New Jersey, a state with legal sports betting and just slightly more population than Virginia’s 8.5 million people.
In 2019, New Jersey checked in with more than $4.5 billion in handle. And that is certainly not the high-water mark for New Jersey. The return of sports in August 2020 saw New Jersey set a new record for monthly handle at more than $650 million. Currently, New Jersey is currently tracking to have as much as $9 billion in annual handle upon market maturity.
There are reasons that Virginia will not do quite as well as New Jersey, however:
- NJ has online casinos; cross-sell from those games help drive sports betting handle.
- NJ has a very open market, with nearly two dozen operators; Virginia will likely be about half of that at best
- New Jersey has access to the New York City market, which has generated a huge amount of NJ’s sports wagering activity. New York has not yet legalized online sports betting. (Virginia does of course, have access to the Washington DC market. While there is a sports betting app in DC called Gambet, it is a monopoly and is underperforming.)
Another interesting case is Nevada, which annually checks in at about $5 billion in handle. But that’s a smaller state that will not have as robust of online sports betting market as Virginia will feature. Nevada has in-person registration, something which has stunted Nevada’s growth; Virginia allows remote registration.
All of that would put Virginia in between the two markets, in theory.
Virginia sports betting revenue
The handle number helps us get to how much revenue Virginia can expect to see. This is fairly easy to reverse engineer from handle.
The amount of money that sportsbook operators make from sports betting is traditionally a relatively small percentage of handle, between 5 and 8%. Taking the midpoint of 6.5% and applying it to $7 billion in handle, we come up with roughly $450 million in operator revenue.
This roughly falls in line with an estimate from the commonwealth of $462 million in revenue from sports betting with a robust online industry.
Virginia’s sports betting law also compares favorably to many other states. Reasonable fees and taxes, as well as what should be a competitive landscape, should help Virginia maximize the amount. Virginia could also attract bettors from other surrounding states, if they either don’t have legal sports betting or a competitive online betting industry.