It has been a long road toward legal sports betting legislation for the state of Virginia but the day finally arrived last week when Governor Ralph Northam signed off on three bills paving the way for a legal sports betting platform in the state. As it stands, House Bill 896, House Bill 4, and Senate Bill 384 will be enacted July 1 with the Virginia Lottery having until September to draw up its final set of rules. Ideally, hopes in Virginia are that the sports betting platform will be fully operational by the start of the NFL season.
There is still one legislative hurdle to clear. VA HB 4 requires a change to Virginia's Constitution and will need a public vote that will take place in November. That vote addresses the approval of the land-based sportsbook locations in Portsmouth, Richmond, Norfolk, Danville, and Bristol. But as it stands, Virginia is poised to become the second US state to welcome in legal sports betting in 2020.
The Virginia Lottery has been tabbed with drafting up the rules for legal sports betting in the state and will be tasked with overseeing and regulating the platform once it goes live. As of now, there Lottery will support both retail and mobile sportsbooks and will license up to 20 providers.
That makes room for up to 12 mobile and internet sportsbook, five brick-and-mortar casinos and up to three professional sporting venues (if and when one arrives in Virginia) that will be allowed to take bets. Included in that are Martinsville Speedway and Richmond Raceway. Sportsbooks will pay $250,000 for a three-year license and the industry will be taxed at 15%.
There will be no betting on in-state colleges and operators in the state will forced to use official league data to settle all in-play betting.
One head-scratching provision
Licensing fees for potential operators has raised a few eyebrows amongst Virginia legislators and those in the sports gambling industry. Governor Ralph Northam, in addition to a $250,000 three-year licensing fee and $200,000 renewal fee has come up with a $50,000 fee for FBI background checks regarding any principal.
A principal in this case is anyone on a casino operators' payroll with a 5% ownership stake in the company that "has the power to vote or cause the vote of five percent or more of the voting securities or other ownership interests of such entity." This could mean that larger sportsbooks, which commonly have a range of people in management positions with more 5% stake, could be forced to pay millions just to have their applications approved.
Sportsbooks operating in Virginia will have to make that money up somewhere, leaving the consumer to absorb the higher holds casinos will be forced to take and robbing bettors of the generous bonus structures that online books have become known for. Simply put, operating a casino in Virginia may become a whole lot less attractive.
Down to the wire
It took some work to get the final legislation before Governor Northam but to legislators’ credit, they managed to do so albeit after an overtime session after a bill was discarded on the last day of the legislative session. Without an extra day, sports betting would not have become legal in the state.
Even at that it wasn't a certainty as the Governor added a few late amendments into the wash.
With the major lifting over with, the way has been paved for Virginians to commence betting on their favorite teams later this year. There is still a little work to do although legislators don’t seem overly concerned about it all getting done. With all of the T’s crossed and I’s dotted, Virginia is expected to bring in nearly $90 million in revenue each year for an economy that could certainly use it right now.