Virginia reports 20% loss in sports wagering revenue

On Friday, the Virginia Lottery released the gross operator sports wagering earnings for February, which amounted to $39.8 million.

The figure is 20% less than the gross revenue recorded in January and the first time the state has generated lower than $40 million since August 2022. The losses can be traced to February’s status as a month with a shorter number of days and its lack of NFL events besides the Super Bowl.

Despite the drop, the betting operators recorded a steady win rate revealing a hold of 9.2%, which moved past 9% for the 11th consecutive time in the past year.

The state announced a $433.8 million handle for February which broke its four-month streak of reaching a minimum of $500 million in accepted bets. The figure was 15.5% lower than that recorded for January and 7.9% more than February the previous year.

Virginia’s February financial report notably made the state the ninth to record over $9 billion in total handle within the post-PASPA era. While the Virginia Lottery usually does not reveal operators’ revenue and handle figures, its report stated that the nine gaming operators ended February with positive AGR, allowing them to remit 15% of their earnings to the state’s coffers.

Virginia is qualified to tax operators $28.4 million in adjusted revenue, increasing its tax coffers by $4.7 million. The state recorded over $11 million in tax revenue within the first two months of 2023, which is over two times the figure for the same period last year.

The state received $7.8 million in promotional deductions, the most since June last year. Virginia prohibits sports betting mobile operators that have been in operation in the state for over a year to debit promotions costs from their gross revenue.

The figure shows that several recently launched online sports books in the Old Dominion likely used signup offers and Super Bowl promotions while courting new players. Some of these books include Hard Rock, SI Sportbook, bet365, and Betway.

February was also the final month before the implementation of the budget amendment, which restricted sports betting bonuses and promotions. The month recorded an additional $3.6 million generated by AGR loss carryover and federal excise tax authorized by the state’s rules.

Compared to last year, Old Dominion operators saw a 44.6% increase compared to the first two months of the previous year. They recorded $89.5 million in gross revenue, 9.5% of which an increase in the win rate contributed to. Virginia taxed up to 78.8% of the figure, over twice the 39.2% levied last year.

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