Virginia Sportsbooks Post 10% Hold For Fourth Straight Month

The Virginia Lottery reported that state sportsbooks posted a 10% hold for the fourth consecutive month in June, narrowly clearing the benchmark with close to $32.7 million in gross revenue.

The Old Dominion has long been a state where the house has flexed its collective muscle in sports wagering, as June marked the 16th consecutive month that operators collectively finished with a win rate above the 7% industry standard. In the recently completed 12-month period starting in July 2022, Virginia operators had a hold just shy of 10.7%, claiming 546.9 million in gross revenue from $5.1 billion in handle.

June’s handle was close to $325.5 million, up 10.2% from the same period last year. Gross revenue was up 25.8%, but the adjusted revenue of more than $26.4 million after accounting for promotional credits and permissible deductions was more than double the $13 million for June 2022.

That resulted in an inflow of $3.9 million into Virginia’s tax coffers, lifting the total for the calendar year to $34.5 million. That is nearly $19.3 million ahead of last year’s pace, when all operators were allowed to deduct promotional credits through the first six months.

Promotional spend down, total deductions up

Running June Top 10 #SportsBetting handles by state:

1 New York $1.17B
2 New Jersey $591.1M
3 Nevada $479.9M
4 Pennsylvania $373.2M
5 Ohio $363.1M
6 Massachusetts $332M
7 VIRGINIA $325.5M <-NEW
8 Colorado $310.7M
9 Maryland $254.5M
10 Michigan ~$236M#GamblingTwitter

— Chris Altruda (@AlTruda73) August 1, 2023

Operators who were eligible to deduct promotional credits against gross revenue reported just over $1.3 million in such credits for June. That was an 83.2% drop compared to last June, which was the last month operators who had conducted wagering for more than 12 months were eligible to deduct those promotions. This June’s figure was also down 27% from May.

There was $17.4 million in promotional credits deducted by operators in the first half of this year, a steep decline of 77.1% from the $75.8 million in the opening six months of 2022. Monthly deductions by carryover — allowed in perpetuity when an operator finishes with a negative adjusted gross revenue for the month — increased 11.4% from May to more than $6.2 million.

The Virginia Lottery does not disclose operator handle and revenue figures in its monthly releases, but previous Freedom of Information Act requests fulfilled by the state agency point to bet365 as the operator with the bulk of this amount. It entered June with $4.2 million in negative AGR, while Betfred was a distant second with nearly $215,000 in negative AGR.

Since an amendment was inserted into Gov. Glenn Youngkin’s Fiscal Year 2023 budget that limited promotional deductions, tax revenue has totaled more than $71 million in the ensuing year. That’s an increase of 156.3% from the previous 12-month span, though it also has been aided by operator gross revenue surging 42.5% in the comparable period.

The Virginia Lottery reported that 12 operators finished with positive adjusted gross revenue for June that’s eligible for the state’s 15% tax levy, but did not specify which those were among the state’s 16 mobile and retail operators.