RICHMOND, Va. (WRIC) — Virginians have wagered more than $1.6 billion on athletic competitions since sports betting was legalized on Jan. 21, 2021.
Some of that money made it’s way back to bettors when they won their wagers – but a lot of it didn’t. So where does the cash go?
It’s no surprise to anyone who knows how bookmaking works that a good portion of the “handle” – the total of bets placed in a given period – goes back to bettors as winnings. The remainder – known as the “hold” – goes back to the operator.
But not all of that money can be taxed by the state. Under the regulatory framework enacted on Jan. 21, companies can deduct bonuses, promotions, and some other operating expenses. These deductions, which totaled over half of the hold since January, don’t count towards the amount taxed at 15%.
The remainder is the Adjusted Gross Revenue (AGR), from which taxes are deducted – over $11 million since January.
That left operators with a cool $59 million – nothing to sneeze at.
No More Black Market Bets
State Senator Jeremy McPike (D-Prince William) was one of the patrons of the bill that legalized sports betting in the commonwealth. He said the legislation recognizes a market that’s always existed, “We know sports betting existed before this, but it’s never been legal before.”
One of the consequences of legalization has been a new source of funding for the state. A small portion of that revenue is set aside by law for the treatment of problem gambling, $276,850 in total.
That includes a program for Virginians to voluntarily exclude themselves from gambling institutions for 1 year, 5 years, or a lifetime.
The rest of the money has been deposited directly into the general fund, where it will be available during budget negotiations. McPike said he’d like to see the money go to school reconstruction – a proposal that has precedent with the Virginia Lottery.
But McPike also emphasized the importance of balancing the rate at which sports betting revenues are taxed, to ensure that bettors don’t go back to the unregulated market.