Virginia is joining an increasingly large group of states with online sports betting, likely going live in early 2021.
As the state gets ready to launch its sports betting industry, how does it stack up against other states that have legal sports betting?
Virginia sports betting launch and basics
First, here’s what you should know about sports betting in Virginia:
- The state passed a law in the spring of 2020 legalizing sports betting.
- An early 2021 launch currently looks like the most likely scenario.
- The state lottery oversees sports gambling in the state.
- There could be as many as 12 sports betting apps authorized in the state; some can be operated by future physical casinos, others by online-only operations.
- The state taxes gross revenue at a rate of 15%.
Other states with sports betting
Virginia is far from the only state with sports betting. After the fall of the federal ban in 2018, there’s a been gold rush in terms of states legalizing sports gambling.
Here are the states (and jurisdictions) that have statewide online sports betting:
- Colorado
- Illinois*
- Indiana
- Iowa*
- Michigan**
- New Hampshire
- New Jersey
- Nevada*
- Oregon
- Pennsylvania
- Rhode Island
- Tennessee
- Washington DC
- West Virginia
- Virginia**
*In-person registration required
**Pending launch
States with betting only at physical sportsbooks and locations:
- Arkansas
- Delaware
- Mississippi
- Montana*
- New Mexico
- New York
* Betting can take place online while on property
How big will the Virginia sports betting market get?
Virginia should feature a robust sports betting industry once it reaches maturity.
Any type of estimate of what the Virginia industry will be mostly an educated guess. No market in the US is truly “mature,” not even Nevada, which is still growing with online betting and which still requires in-person signups.
But by five years after launch, PlayVirginia estimates there could be as much as $7 billion or more wagered annually in Virginia. That figure could result in $400 million in gross gaming revenue for operators.
The state is bordered by two other states with legal online betting, Tennessee and West Virginia. But that should not materially affect the industry.
There is also a sports betting app in Washington DC, called Gambet, which will have some impact on Virginia. If there weren’t a legal option in DC, Virginia would have that market all to itself (outside of offshore sportsbooks). However the early returns for that monopoly sports betting operation in DC have been poor, so the impact on the Virginia betting industry could be muted.
Maryland legalizing sports betting might also attract market share away from Virginia, but that state is not imminently ready to legalize sports betting.
How many Virginia sportsbooks will there be vs. other states?
Virginia can have up to 12 online sportsbooks and will have at least four sportsbook apps available statewide, per the law. How many there will be ultimately depends on how many casinos received referendum approval in the fall.
There is also the potential for up to five Virginia casinos, all of which seem like they will eventually move forward with construction. All of those casinos can have online sportsbooks.
Other possibilities for physical sportsbooks:
- The Washington Football Team (if it ends up moving to Virginia)
- NASCAR tracks in Richmond and Martinsville can also have sportsbooks. More on the potential for Martinsville NASCAR betting and Richmond NASCAR betting.
All in all, it means there should be a lot of options for Virginians to bet.
Will bettors have it good with legal Virginia sportsbooks?
If you’re gambling in Virginia, you will have it just as good as many other states. But without a truly open market, the competition will not be quite as robust as some states.
Advantages of Virginia sportsbooks
- You will have a number of choices for sportsbooks. Some states have monopolies with only a single sportsbook app.
- Taxes and fees are lower in Virginia than many states. This should allow sportsbook to reinvest money in their product and marketing, which will make for a better user experience.
- You will be able to sign up for apps anywhere in the state. Some states have put in temporary (Iowa) or permanent (Nevada) requirements for in-person registration. If you had to go to a casino to sign up, that’s obviously going to slow a lot of people down.
Disadvantages of Virginia sportsbooks
- With a limited number of licenses available, the industry will be short of a fully open and competitive market. That is less than ideal for the consumer. States like New Jersey, Colorado and Tennessee do or will have more online sportsbooks than Virginia.
- Bettors will be throttled on what they can bet on as far as college sports. You can’t bet on Virginia college teams, nor can you place in-game wagers on any. Similar restrictions exist in other states, but this is not the norm. Also, offshore sportsbooks operating illegally in Virginia will still take this action.
- The lottery is in charge. This has not been a recipe for success in other states, but it is a bit different here, as the lottery acts as a regulator rather than an operator. Still, lotteries traditionally are not ideal for sports betting industry oversight because it is different from their core competency.
Virginia sports betting tax and fees vs. other states
Virginia’s fees and taxes and fees for sports betting operators are reasonable but fall on the higher end among the states that have legalized.
Still, the 15% tax rate on gross sports betting revenue in Virginia and $250,000 initial licensing fee (for three years) are more than fair and shouldn’t hinder sportsbooks wanting to operate in the state. As stated earlier, this should help the Virginia sports betting industry grow.
Here are the numbers for the states around the country in regards to online sports betting revenue and licensing fees:
| State | Tax rate (on gross gaming revenue) | Initial licensing fee |
|---|---|---|
| Virginia | 15% | $250,000 |
| Colorado | 10% | $135,000 |
| Illinois | 15-17% | $10 million; 3 online online-only licenses $20 million |
| Indiana | 9.5% | $100,000 |
| Iowa | 6.75% | $45,000 |
| Michigan | 8.4%-9.65% | $150,000 |
| New Hampshire | NA, revenue share | NA, competitively bid |
| New Jersey | 13% | $100,000 |
| Nevada | 6.75% | $500 |
| Oregon | NA, state-run monopoly/revenue share | NA, state-run monopoly |
| Pennsylvania | 36% | $10 million |
| Rhode Island | NA, state-run monopoly/revenue share | NA, state-run monopoly |
| Tennessee | 10% | $750,000 |
| Washington DC | NA, state-run monopoly/revenue share | NA, state-run monopoly |
| West Virginia | 10% | $100,000 |