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Virginia became the seventh state in the post-PASPA era to surpass $1 billion in gross sports wagering operator revenue Friday after the Virginia Lottery reported that sportsbooks claimed $48.1 million in gross revenue for May.
The Old Dominion reached the milestone in 29 months of legal wagering after launching in late January 2021. Virginia joins New Jersey, New York, Nevada, Illinois, Pennsylvania, and Indiana in the $1 billion club, with the Hoosier State reaching the 10-figure mark in April.
Virginia has shown itself to be a state where the house performs consistently well. Its all-time hold on more than $10.4 billion handle is just over 9.6%, and operators statewide have had a win rate of 9.1% or higher for 10 months running. The revenue total from $403.7 million in accepted wagers for May was in line with a historic nationwide rout by sportsbooks for the month, as Virginia’s 11.9% hold — the third straight month in double digits — currently ranks 12th among 25 states to report figures.
The state was able to levy its 15% tax rate on $42.5 million in adjusted gross revenue, resulting in an inflow of nearly $6.3 million to state coffers. Last year’s budget amendment, which drastically curtailed promotional credit deductions for operators, has contributed to a dramatic rise in tax receipts for both Fiscal Year 2023 and the first five months of the calendar year.
The state has raised $67.1 million in sports wagering taxes in the first 11 months of FY 2023, while the $30.5 million collected in the first five months of 2023 is $17.2 million ahead of last year’s pace and currently ranks ninth nationally. Virginia collected $35.5 million in tax receipts in the first 18 months of legal wagering prior to the budget amendment taking effect last July.
Year-over-year and YTD metrics show growth
Running Top 10 May #SportsBetting handles by state:
1 New York $1.36B
2 New Jersey $778.9M
3 Nevada $527.4M
4 Pennsylvania $495.6M
5 Massachusetts ~$455M
6 VIRGINIA $403.7M <-NEW
7 Maryland $320.2M
8 Michigan $305.3M
9 Indiana $283.4M
10 Tennessee $279.8M#GamblingTwitter— Chris Altruda (@AlTruda73) June 30, 2023
The Virginia Lottery does not disclose handle and revenue figures by operator in its monthly release, but it did note that 11 operators finished with a net positive adjusted gross revenue that allowed the state to levy taxes. It did not specify if the state’s two retail sportsbooks were among the 11 that paid taxes, but based on previous Freedom of Information Act requests fulfilled by the Virginia Lottery, the lion’s share of the nearly $3.8 million in allowable deductions for May likely came from bet365.
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The outfit entered Virginia in January and is able to deduct promotional credits against its gross revenue for a total of 12 months. Heading into May, bet365 had an overall AGR of nearly minus-$4.8 million despite reporting close to $10.5 million in gross revenue since launch, while posting a healthy 16.9% hold.
Statewide, handle was up nearly 15% compared to May 2022, while gross revenue rose 13.2%. Adjusted revenue, however, was up 54.6% versus last year, with the 2023 total more than $15 million higher. May’s handle was 5.2% lower than April, but gross revenue ticked 6.7% higher.
Virginia sportsbooks have accepted nearly $2.3 billion worth of wagers in 2023, an 8.6% increase from the first five months of last year. Gross revenue is up nearly one-third to $238 million, aided by a 10.4% hold that is nearly two full percentage points higher than last year. Adjusted gross revenue in the 2023 calendar year has soared 125% to $199.6 million, as the state has levied taxes on 83.9% of revenues this year compared to 49.5% in the first five months of 2022.
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