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Figures recently released by the Virginia Lottery show that $4.5 million in sports betting taxes were paid to the state in August, compared to $3.1 million collected in July and $1.4 million one year earlier.
Tax changes to sports betting in Virginia have sent state revenues skyrocketing in recent months from previous levels as veteran operators now have to hand out more of their winnings.
Figures released Friday by the Virginia Lottery confirm this recent upward trend in tax revenue, with nine online sportsbooks reporting positive revenue in August and paying out $4.5 million to the state.
August tax receipts topped the $3.1 million collected in July and also topped the $1.4 million reported for August 2021.
The recent increase in tax revenue in Virginia is tied to changes made during the state’s budget process earlier this year, which caps the amount of free bets and other promotions operators can deduct from their winnings. Operators can now only make these deductions for one year after they begin taking bets in the state, which means major legal sportsbooks in Virginia must pay all of their earnings.
For example, in August, Virginia’s 15% tax rate on sports betting income and Commonwealth restrictions on promotion-related deductions generated $31.4 million in adjusted revenue (subject to the tax), up from the $8.7 million reported a year earlier. That’s partly because in August 2021, operators made $6.9 million in premium-related deductions from their gross revenue, while in August only $1.1 million was removed.
Room for one more?
Virginia’s legal sports betting industry is also growing.
Thirteen licensed operators handled $284.7 million in bets in August, up 56% from a year earlier, when there were just eight legal books taking action. The August handle was also up slightly from July, when betting reached $266 million.
Bettors won nearly $247.7 million in August in Virginia, leaving operators nearly $37 million in gross revenue and giving the books a hold of around 13% for the month. The August 2021 win rate for Virginia sportsbook was around 9.8%.
Virginia’s sports betting industry also continues to add new faces, with a bet365-linked company receiving a temporary betting license in August.
