The Virginia Lottery announced Wednesday that their retail and online sports betting sites accepted $503.1 million in wagers to finish off the 2022 calendar year.
December saw a 3% decrease in wagers, down from the $518.8 million reported in November, as sports betting in Virginia continues to fall after hitting an all-time high in October.
The good news for legal sports betting operators was that, despite the drop, the commonwealth’s handle still stayed above $500 million for the third straight month. The good news for Virginians was that the sportsbooks saw their hold percentage move from 11.1% to 10%, as the state's adjusted Gross Revenue clocked in at just over $47 million.
Eight of Virginia’s 14 operators in December reported a profit, leading to a tax bill of $7 million, the majority of which goes to the state's General Fund.
More sportsbooks launch in 2023
When sports betting started in January 2021, the commonwealth saw a consistent increase in the number of sportsbooks. From January 2021 until May 2022, three months was the longest period before a new operator entered the market.
While it appeared that Virginia’s landscape was too competitive for new companies, 2023 is seeing new life, and both Betfred and bet365 launched in Virginia this week giving bettors new brands (and promos) to take advantage of.
One of the remaining mobile-only licenses was claimed by bet365, while Betfred partnered with Loudoun United F.C., a Virginia-based team in the USL.
Tax changes floated in Virginia
It has become apparent recently that the tax structures each state passed when they welcomed sports betting are quite fluid and there is an ongoing tug-of-war to change the amount of money operators must pay.
Sportsbooks are trying to lower their tax burden in New York. The government in Colorado passed a bill to increase its sports betting tax bill.
For Virginia? It’s a bit of both.
The state's newest legislative proposal — Senate Bill 1142 — would allow all sportsbooks to deduct a small percentage of their promotions even after a year of taking bets in the state, which they are currently prohibited from doing.
This would benefit larger sportsbooks that are no longer able to deduct promotions from their revenue, because they've been operating in Virginia for more than 12 months.
How 2022 broke down
From January to November, the large sportsbooks in the Commonwealth did not shy away from promotions.
The Top 3 operators (FanDuel, DraftKings, and BetMGM) comprised 76% of Virginia’s promos, with BetMGM leading the way with 34%.
In terms of overall market share, those three brands unsurprisingly dominate the market (FanDuel 41.1%, DraftKings 23.1%, BetMGM 18.3%) — and as a result, there is a large pool of sportsbooks struggling to make an impact.
Of the 14 operators in the state during that time, eight of them individually accounted for less than 2% of Virginia’s overall wagers.
When it came to Virginia bettors, pro basketball was the most popular with 22.3% of bets. Football was second with 15.7% and tennis came in third with 11.9%, while 20.7% of all wagers went towards parlays.