Virginia-based Sportsbooks Prepare for NFL's Regular Season Beginning
When considering whether Virginia's sportsbooks had a good or bad July, it depends on the angle you take.
According to the Virginia Lottery, sports betting increased by more than 10% compared to July of the previous year. In July, overall wagers totaled $293.6 million, as opposed to the $266 million in July 2022. However, there was a drop of 8.8% from the $325 million wagered in June of the current year.
Despite this slight decline, the state anticipates that the NFL season kickoff on September 7 will help boost revenues and turn the corner, allowing for profitable months to close out the year.
The American Gaming Association has found that a whopping 73 million Americans plan to wager on the NFL this year, which is a nearly 60% increase from last season. What's more, 14% of these sports bettors will place their bets online, as more states legalize gambling.
Virginia legalized sports betting in 2020.
Projected Tax Revenue from Sports Betting
The primary reason for the legalization of sports betting in Virginia was to provide a new source of tax revenue. Since closing a loophole in 2022, legislators believe they are on track to reach the annual projections of about $55 million.
The state taxes operators at 15% of their total Adjusted Gross Revenue (AGR). In July, AGR added up to over $28 million, resulting in roughly $4 million in tax payments. This represented an increase of more than 4% compared to June and over 25% compared to July of the prior year.
Thus far this year, sports betting in Virginia has produced over $38.5 million in tax revenue.
Most of this tax money is directed to the state's general fund, while 2.5% goes to the Problem Gambling Treatment and Support Fund Allocation.
The Distribution of Gaming Handle
The $293.6 million sports betting handle in July was primarily driven by mobile operators with $290.9 million and casino retail contributing just $2.6 million. Mobile operators earned $27.6 million in Adjusted Gross Revenue (AGR) and casino retail contributed $579,077.
The retail sportsbooks kept 23% of their wagers, while online books held onto 11%. This slight increase in the state's monthly hold rate also contributed to the growth in tax income.
In order to meet the expected annual tax revenue of $55 million, a monthly average of $4.58 million would be necessary.
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