June’s report on Virginia sports betting marks the last promotional hurrah for seven sportsbook operators after new rules went into effect July 1.
That date was the start of the new fiscal year for Virginia, which set the state’s new budget into motion. That budget includes a 12-month limit on promotional spend deductions for Virginia sportsbooks after they launch.
Virginia is the second state after Colorado to amend its rules on unlimited promotional deductions.
VA sports betting promo totals
Virginia’s 13 sportsbooks have deducted $197.9 million in promo costs from taxable revenue since the market launched in late January 2021. That includes the $7.8 million deducted, according to the June report released Monday.
That dragged taxable revenue to $13 million, for $1.9 million paid in taxes.
Seven operators are no longer allowed to deduct promo costs after July 1. The group accounted for 93.2% of the $190 million deducted through May 2022, according to the Virginia Lottery’s update from late July:
- BetMGM: 37.1%
- FanDuel: 27.6%
- DraftKings: 16.5%
- Caesars: 8.7%
- BetRivers: 1.8%
- WynnBET: 1.2%
- Unibet: 0.3%
Penn National‘s Barstool Sportsbook will be the next to join the list. The brand launched Aug. 10, 2021.
Promo deductions spike in football season
It will take a few months to see a big difference in the revenue reports, as Virginia’s first report from football season will not come out until November. Promo deductions are highest during prime customer acquisition season when NFL betting and college football betting are in play.
Take last September, for example. Operators combined for $17.4 million in promo deductions for the month, which redcued taxable revenue to $10.3 million.
Operators would have paid $4.2 million in taxes last September without those deductions. That is 167.3% more than the $1.6 million the state actually received in taxes.
June report better than US sports betting trends
Virginia’s handle fell 16% from May to $295.2 million with revenue down 39%, both of which are better than average in the US.
The 23 jurisdictions that reported June results so far averaged a 22.9% dip in handle and a 44.1% drop in revenue compared to May.
Year-over-year comparisons are also better than the average in Virginia. June’s handle is up 25.7% with revenue up 18%. That tops the 6.5% handle growth and 25% revenue decline on average when stripping out New York‘s influence.
