The Virginia Lottery reported sports wagering handle of more than $520.3 million for the month of September on Wednesday, the second-highest total in 33 months of wagering in the Old Dominion.
It was a year-over-year increase of 26.5%, as bettors in Virginia wagered more than one-half billion dollars for the sixth time since launching in January 2021 — all coming in the last 12 months. Handle in that one-year span is $5.3 billion and accounts for nearly half of the $11.9 billion in all-time wagers.
Though only seven operators finished with a net positive adjusted gross revenue to be eligible to be taxed, operators collectively won $54.1 million in gross revenue. That was up only 0.5% compared to September 2022, as the 10.4% hold was 2.7 percentage points lower versus last year.
Virginia’s sportsbooks have combined to fashion a double-digit hold for seven consecutive months, ranging from just over 10% in June to over 11.9% in May. It was also the 15th straight month the hold was at least 9.1% — more than two percentage points above the 7% industry standard.
The state was able to levy taxes on $45.6 million in adjusted gross revenue. The ratio of AGR to gross revenue was above 80% for the 14th time in 15 months since a budgetary amendment passed that prevented deductions for promotional play by companies that had been operating in the state for longer than 12 months.
The state claimed slightly more than $7 million worth of tax receipts, lifting the calendar-year total to $49.8 million. That is $19.8 million ahead of last year’s pace after three quarters.
Higher adjusted revenue = more tax dollars
Running 2023 YTD Top 10 #SportsBetting handles by state (thru Sept in CAPS)
1 NEW YORK $13B
2 NEW JERSEY $7.77B
3 Illinois $6.69B
4 NEVADA $5.68B
5 OHIO $5.23B
6 PENNSYLVANIA $4.99B
7 Arizona $3.91B
8 VIRGINIA $3.75B
9 Colorado $3.17B
10 MASSACHUSETTS $3.08B#gamblingtwitter— Chris Altruda (@AlTruda73) November 1, 2023
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In the 15 months since the budgetary amendment was inserted, the state has been able to tax nearly 85% of the $665.8 million in gross revenue generated by Virginia sportsbooks. That is substantially higher than the 47.4% of the $490.9 million taxed during the first 18 months of play.
There was always going to be a notable gap considering the aggressive nature of operators upon entering a new market, but that percentage was also dragged down by mobile operators being allowed to carry over losses in perpetuity.
The Virginia Lottery does not disclose handle and revenue information by operator in its monthly releases, but it did report $3.7 million in promotional credits offered to bettors — the most since March — and an additional $4.8 million in other deductions. The combined total of $8.5 million in deductions was the second-highest total of the calendar year, trailing only the $11.4 million accrued in February.
It stands to reason bet365 substantially upped its promotional offers with the start of NFL season. The England-based sportsbook has already lavished $19.7 million in credits to bettors since launching in January. It has been slow going to get to a zero AGR for bet365, which entered September with a negative AGR of -$3.2 million.
Betfred is also eligible to deduct promotional credits following its December 2022 launch but has not done it to bet365’s scale. Betfred entered September roughly $238,000 in the red, but also has yet to have a monthly promotional outlay reach six figures.
Year-over-year adjusted gross revenue has made the biggest separation from 2022, surging 61.5% to $327.8 million through the first nine months of 2023. Gross revenue is up 21% to $389.6 million, and handle is up 11.3% to $3.75 billion.
Running September #SportsBetting Top 10 states by handle:
1 New York $1.77B
2 New Jersey ~$1.3B
3 Nevada $811.2M
4 Pennsylvania $726.3M
5 Ohio $691.7M
6 Virginia $520.3M
7 Massachusetts $512.2M
8 Michigan $475.8M
9 Maryland $442.5M
10 Tennessee $418.1M#SportsBettingTwitter— Chris Altruda (@AlTruda73) November 1, 2023
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