Virginia appears poised to surpass Tennessee as the state to reach $1 billion in online wagering on sporting events the fastest, despite an April decline.
In less than four months, Virginians have wagered more than $865.17 million on sporting events, meaning just $135 million in bets during May would push the state past $1 billion within five months, according to the Virginia Lottery Board, which oversees sports gaming. The state released April figures Friday.
Online sports betting began Jan. 21 in Virginia and the state presently has seven licensed online sportsbooks, but no retail locations.
Since online sports wagering began in Tennessee on Nov. 1, 2020, residents there wagered $1.07 billion during the first six months. After four months, Tennessee’s total was $699.9 million and it passed the $1 billion mark in April. Virginians wagered nearly $100 million more than their neighbors during the first four calendar months of 2021.
Tennessee has seven sportsbooks and no retail locations.
“In most ways, Virginia and Tennessee mirror each other. Both created open markets with online betting the sole focus at launch and both created tax systems that have not inhibited operators even though rates are on the high side compared with other states,” according to Jessica Welman, analyst for the Las Vegas-based PlayUSA.com network, which includes PlayVirginia.com and PlayTenn.com.
“A key has been that both Tennessee and Virginia have enthusiastic bases of college sports fans, and they almost instantly embraced sports betting. That has really fueled the rapid growth of both states,” Welman told the Bristol Herald Courier in an email response.
Virginia levies a 15% tax on sports betting activity based on each permit-holder’s adjusted gross revenue, while Tennessee applies a 20% tax.
“If there is a major difference between the two, it is that Virginia has built a stronger regulatory framework. The Virginia Lottery is excelling as a regulator while Tennessee has had some significant challenges. This will pay long-term benefits for the state,” Welman wrote.
The Virginia Lottery reports $236.4 million was wagered on sporting events during April, a 22% decline from the $304 million bet during March. The drop was blamed on the lack of marquee events on the heels of significant wagering activity during the NCAA college basketball tournaments, according to lottery officials.
“Even with a dip in wagers, the Old Dominion’s sports betting market is still off to an incredible start, already reaching parity with more mature markets,” according to Ron Fritz, sports betting analyst at VirginiaIsForBettors.com. “After just three months of live sports betting, the state has tied Indiana for the country’s sixth largest sports betting handle. With three more sportsbooks on the way, the market will continue to show its potential right out of the gate.”
Tennessee also reported a 16% decline with $176 million wagered in April compared to $205 million during March.
Despite that, the state reports more than $18.3 million in state tax revenues since sports wagering came online last November, including nearly $13 million during 2021.
While bets were down in Virginia, the state collected a new one-month record in sports gaming tax revenues of $1.6 million during April. Virginia has collected more than $3 million in tax revenues thus far.
The gross winnings of Virginians for the month totaled $216.9 million, or a 22% “hold” or operators’ win percentage, while bonuses and promotions totaled $5.5 million.
Sports wagering is currently legal in 21 states plus the District of Columbia. Legislatures in nine other states have approved sports wagering, but it has yet to go live in those states.
Declines in wagering were common in April, according to PlayUSA.com. Indiana wagering was off by over 25% compared to March, Iowa was down 26%, and Michigan had a 30% decline. Tennessee wagering declined 13.6% compared to March.
In Virginia, seven operators split more than $11.38 million in adjusted gross revenues during April. They included Betfair Interactive, or FanDuel, in partnership with the Washington Football Team; Crown Virginia Gaming LLC, also known as Draft Kings; BetMGM LLC; Rivers Portsmouth Gaming LLC, the future Portsmouth casino operator; Caesars Virginia LLC, also known as William Hill, operators of the future Danville casino; WSI US LLC, or Wynn and Unibet Interactive, which went live in late April.
Three more, Barstool Sportsbook, also known as Penn Sports Interactive LLC, Golden Nugget and Bally’s all hold temporary permits from the Virginia Lottery Board but haven’t yet gone live, according to the state website.
Hard Rock International, the operating partner for the future Hard Rock Bristol Resort and Casino, also plans to operate a sportsbook in Virginia. The enabling legislation guarantees sportsbook licenses for the five casinos in addition to 12 sports gaming licenses.
Last month, Florida Gov. Ron DeSantis announced a deal with the Seminole Tribe, which owns Hard Rock International, to manage all mobile sports gaming in that state. The complex agreement is subject to federal approval.
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