The Commonwealth of Virginia is off to a hot start with regard to their legal sports betting industry. Launched on January 21, Virginia’s current online-only sports betting platform didn’t set a national record for the first full month of operation, but their sportsbooks performed admirably and currently sits seventh in the country, right behind Colorado, with Illinois, which is expected to land in the “Top-4” still to report.
The Virginia Lottery expected a robust sports betting environment, but February’s numbers actually exceeded expectations. February is generally a down month for the legal sports betting industry, but a rash of welcoming promotions shot the Virginia handle to “better-than-anticipated” territory.
A Brief History of the Virginia Scene
The Commonwealth of Virginia voted to allow legal sports betting on the November 2020 election ballot and moved quickly to launch its own platform with a state-friendly 15% tax rate. There was widespread support for legal sports betting in all sectors in Virginia, making regulation and implementation rather easy for lawmakers.
Five sportsbooks went live on January 21 – BetMGM, BetRivers, the two national DFS giants, and William Hill and right away and produced respectable numbers in their first 11 days.
The idea for a quick launch was for Virginia sportsbooks to take advantage of the biggest betting day of the year – the Super Bowl and regulators managed to facilitate a pre-February launch day, so sportsbooks had ample time to do so. The Super Bowl managed to generate a $19.5 million handle which amounted to about 7% of the February overall handle.
A Peek at the Productivity
Launching on January 21, Virginia’s sports betting operators gave us a glimpse of what to expect in February when they released their handle for the first 11 days of operation. January’s total handle was $58.9 million, respectable considering the lack of promotional time the platform had.
Virginia sportsbooks followed that up with a $265.8 million in February, a number that put the Commonwealth in some rarified air and obviously set a record for that jurisdiction. Only Michigan did better in their first full month of operation and Michigan was buoyed by a retail component as well as a broader mobile platform.
Operators generated more than $12.2 million in gross gaming revenue during the month.
But adjusted gross revenue fell short of expectations however and landed in the “minus category” (-$3.2 million) for the month thanks to bettors winning $253.5 million of the $265.8 million handle, good for a disappointing 4.6% hold and because of the estimated $13.2 million in promotions and bonuses that is customary with the launch of a new platform.
Another $2.3 million in “other” deductions was reported by the Commonwealth’s sportsbooks.
Sportsbook losses meant that just $300,594 in taxes was collected for state and local coffers.
The Future Looks Bright
The Virginia market looks as though it is on solid footing already. Not only did bettors turn out in droves during the first full month of legal sports betting in Virginia, but new operators are lining up to be added to the Virginia family.
WynnBET launched March 12, in time to take advantage of March Madness, and Golden Nugget, Bally’s Corp. and Penn National Gaming’s Barstool Sportsbook have all been approved by the Virginia Lottery and are waiting in the wings for an official launch date.
Casinos are on their way for the previously retail-betting void Virginia market and with them, more sportsbook licenses will follow. All will lead to a healthier, more mature, competitive and eventually profitable market. March, with the NCAA Basketball Tournament should be the first sign of that.
The Next Step
The next step for the Virginia legal sports betting industry is posting profits, something they didn’t see in their first six weeks of operation. We will know March’s contributions in about a month’s time, but expectations are for Virginia ‘s sports betting operators to turn a profit in March and continue the upward trajectory up to the NFL season, when wagering should go through the roof.
By all accounts, Virginia’s first full month of legal sports betting has been a success. March Madness, NBA and NHL playoffs and the expansion of the betting market will be themes in the Commonwealth in the upcoming months. It all points to a mature market sooner than later and for Virginia to maintain a legitimate “Top-10” spot on the “bet-friendly states” list.