Virginia doesn’t have a professional sports team to call its own, but in the year since sports betting in the state was legalized, that seemingly important detail hasn’t deterred sports bettors from wagering more than $3.2 billion.
Sportsbook operators in the state have earned more than $130 million in adjusted gross revenue, after paying out winning bets, according to a report released by the state today. Additionally, state coffers have been filled with $19.8 million in taxes, and $508,000 has gone toward problem gambling initiatives.
But it could be a while before proponents can say for certain sports betting is the economic driver they claimed it would be.
Rob Mcnab, a professor of economics at Old Dominion University, said it’s too early to tell if the cash cow will be a permanent windfall or just a temporary firehose.
The first sports bets in the state were wagered on Jan. 21, 2021. Since then 10 sportsbook apps have gone live. But the last 375 days have seen much of the state, along with the rest of the country, significantly impacted by COVID.
Mcnab said it’s too soon to tell if it’s a lasting phenomenon or if the attraction will subside once life returns to some level of pre-COVID normalcy. It’s not yet clear whether this revenue is being taken from existing entertainment options or if this is an entirely new revenue stream.
“COVID has created a significant amount of economic uncertainty around all the data,” Mcnab said.
How Successful Has Virginia Sports Betting Been?
FanDuel has accounted for 43% of betting handle in Virginia’s first year of legal wagering, followed by DraftKings at 27%, according to state data released in January. Bettors have split their bets between professional basketball (21.5%), professional football (17.4%), and parlays (18.5%), according to state data.
Kevin Hennessy, director of publicity for FanDuel, told 13NewsNow in Norfolk that Virginia’s launch was the best one the company had ever had.
“When Virginia launched, it was our most successful launch to date with more users on the first weekend than any state before it,” he said at the time.
But mobile betting revenue and enthusiasm don’t translate to sustained economic growth and job development, Mcnab cautioned.
A 2019 study indicated tax revenue from sports betting in the state was expected to be between $22 million and $55 million, so with around $20 million in tax revenue generated in year one, the state has a ways to go before reaching the high end of that projection.
Also, the jobs created by the rise in sportsbook apps, are created by those companies, which are not based in Virginia.
“There is no job creation in these apps. Most are handled algorithmically and not by individuals. Casinos are mostly local markets, but the sportsbooks are most likely not located in the state,” Mcnab said.
More Sports Betting Rules To Come
Virginia lawmakers have proposed various pieces of legislation to tweak the program.
In an effort not to leave money on the table, lawmakers hope to begin including the bonus dollars companies offer to entice bettors as taxable income.
This afternoon, a House committee is slated to discuss House Bill 1127, which would open the door to bets on Virginia collegiate events. As the law stands now, bets are not allowed on games involving in-state schools such as the University of Virginia or Virginia Tech.
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