- Virginia has seen roughly 50% of their potential sports betting tax benefits due to sportsbooks deducting promotions and bonuses.
- The budget approval requires operators that are live for 12 months to pay these taxes moving forward.
RICHMOND, Va. – Virginia is joining Colorado as the second state to remove promotion deductions for sports betting.
With a tax rate of 15%, Virginia has lost out on roughly 50% of their tax benefits from sportsbooks deducting bonuses.
With $33.7 million sent to Virginia for tax purposes, the year and a half of sports betting would have contributed nearly $70 million had the deductions not been in place.
In Year 1, the sportsbooks held the power, sending $18.6 million to the government ($11.9 million from FanDuel alone). Meanwhile, $38.2 million could have been recorded.
Regardless, Virginia’s budget requires Virginia sportsbooks that have been active for a year to pay taxes on these deductions. Currently, seven sportsbooks fit this mold.
An eighth in Barstool Sportsbook will be included, once its one-year anniversary hits on August 10.
Virginia’s Record On Deducting Promtional Dollars
While the concept was brought forth from the budget approval, this isn’t the first time Virginia policymakers attempted this change.
In the past session, HB 1103 was introduced to cap the promotional deductions at 12 months, as it was previously uncapped. However, HB 1103 barely advanced, being referred to and left in Committee on General Laws.
This measure would have also supported removing a rollover should a sportsbook end that month in the red. The budget did not include this idea while being approved, but the 12-month cap is official.
Sportsbooks in Virginia have deducted roughly $100 million from gambling bonuses and promotions. This resulted in some sportsbooks giving almost no benefit to the state.
Also included in the budget was interest-free loan availability from the Virginia Lottery. The Secretary of Finance can authorize this loan “to fund start-up costs associated with the implementation of Casino Gaming and Sports Betting activities”.