VA sports betting operators are one step closer to getting some level of promotional deduction after riding a fast track in the Senate.
SB 1142 passed the Senate Friday afternoon by a vote of 31-7 with no conversation on the floor before it.
“We were pleased to see the bill overwhelmingly pass the Senate and look forward to continuing working with the House of Delegates,” said Sports Betting Alliance spokesperson Nathan Click. “Promo credits help legal sports betting operators compete with the illicit market, and we are glad to see this progress in the state house.”
Under the state’s current budget, Virginia sportsbooks cannot deduct promotional dollars from taxable revenue after their first year active in the state. SB 1142 would let operators deduct promotional costs up to 1.75% of their monthly handle.
Bill moving slower in the House
Companion bill HB 2202, meanwhile, was tabled by a 21-0 vote in the House Appropriations committee on Friday.
That is not because of any pushback, though, according to one source.
Instead, the sports betting legislation was tabled so some technical issues could be fixed.
VA sports betting taxes thrive under new rules
One thing is clear: Virginia makes a lot more money without those deductions.
From July through December 2022, operators paid $36.6 million in taxes. Compare that to the $35.5 million paid over the entire 18 months prior, dating back to when the market launched in January 2021.
Given there was $2.5 billion bet over those six months, there could have been up to $44 million deducted from the $270.7 million in sports betting revenue. That ~$227 million in taxable revenue would have led to $34.05 million in taxes, more than $2.5 million lower than what was paid.
The ban on promo deductions has not slowed the market down, either. Operators reported $50 million or more in revenue for September through December, the first time that mark has ever been crossed. October, November and December were also the first months that handle topped $500 million.