The 20% drop in revenue from January was not surprising, as handle is normally lighter in February due to it being a short month and the Super Bowl being the only NFL action. Operators did have a solid win rate, posting a hold of 9.2% as they collectively surpassed 9% for the 11th time in the last 12 months. The Virginia Lottery did not disclose specific Super Bowl figures.
The $433.8 million handle for the month represented a 15.5% decline from January and ended a run of four straight months with at least $500 million in accepted wagers. February’s handle, though, was enough to make Virginia the ninth state to surpass $9 billion total handle in the post-PASPA era and represented an increase of 7.9% compared to February 2022.
The state was eligible to tax $28.4 million in adjusted revenue, resulting in an inflow of $4.7 million into its tax coffers. The $11 million-plus in tax revenue through the first two months of the year is more than double the comparable period from 2022.
Running Top 10 #SportsBetting handle for February by state:
1 New York $1.47B
2 New Jersey $847.4M
3 Nevada $659.4M
4 Pennsylvania $599.5M
5 VIRGINIA $433.8M <-NEW
6 Michigan $357.2M
7 Indiana $356.2M
8 Maryland $339.4M
9 Tennessee $327.3M
10 Louisiana $197.7M#GamblingTwitter
— Chris Altruda (@AlTruda73) March 31, 2023
An uptick in promotional spend for some
Virginia does not allow mobile operators to deduct promotional spend from gross revenue if it has been operating in the state for more than 12 months, but some of the newer online books in the Old Dominion eligible to do so — which include bet365, Hard Rock, Betway, and SI Sportsbook — appear to have aggressively courted bettors during February, likely with Super Bowl and introductory offers.
Promotional deductions statewide totaled $7.8 million, the highest amount since June 2022. That was also the last month before the budget amendment placing restrictions on promotions and bonuses took effect. Additional deductions, including the federal excise tax and AGR loss carryover permitted by state rules and regulations, accounted for another $3.6 million.
The Virginia Lottery does not disclose handle and revenue figures by operators in its monthly reports, but did state nine operators finished with positive AGR, making them eligible to pay taxes at a 15% rate.
Operators in the Old Dominion have gotten off to a strong start compared to last year, with the $89.5 million in gross revenue a 44.6% increase versus the first two months of 2022, thanks in part to a 9.5% win rate that’s nearly two full percentage points higher. The state has been able to levy taxes on 78.8% of that amount, more than double the 39.2% from last year, when it was eligible to tax $26.1 million of the $66.5 million in gross revenue generated.