Virginians have long been sidelined when it comes to gambling, but it's a safe proposition that sometime before the upcoming Super Bowl they will be able to wager from the comfort of their couches as Virginia joins a growing list of states that allow sports wagering.
The Virginia Lottery is expected to give the go-ahead next month to what will likely be more than a dozen betting sites to take wagers from Virginians on numerous types of sports. Officials predict Virginians will respond by betting as much as $400 million in 2021 and steadily increasing amounts thereafter.
The change is coming after Virginia legislators approved sports gaming for a state that had been a gambling holdout but is belatedly embracing the trend. The sports betting will precede the arrival of casinos in four cities that approved their construction in referendums last month but are not expected to be open for several years.
Sports gambling, meanwhile, is imminent. Virginia Lottery Director Kevin Hall said the state has received 25 applications from would-be players in the industry. The law requires the lottery to pick a minimum of four and a maximum of 12 providers.
In fact, Hall said, he expects that Virginia will approve more than 12 applications, because the law grants preference to professional sports organizations with a home in Virginia. So any applications submitted by the Washington NFL football team, the D.C. United soccer franchise and NASCAR could be approved in excess of the 12-vendor cap.
The football team did not respond to queries about its plans. Earlier this year, the Denver Broncos announced plans for a partnership with FanDuel — and subsequent deals with other operators — to offer a Broncos-branded betting experience. Hall said he anticipated that any sports clubs in Virginia that enter the market would do so through a similar partnership.
There will be no brick-and-mortar sportsbooks — only online options are permitted under the state law. Wagers are barred on games involving Virginia colleges. Bets on the Olympics won't be allowed, either, to the chagrin of gaming sites that tried to convince state regulators it should be permitted.
Virginia is joining 19 other states that now have legalized sports gambling, according to the American Gaming Association, part of a rush that occurred after a 2018 Supreme Court ruling that gave all states the option to allow wagering.
The states have adopted a patchwork of approaches. Virginia and Tennessee are the only two states that have adopted a strictly online approach.
States also tax gambling at very different rates, from 6.75% all the way up to 50%. Virginia's tax rate of 15% is roughly in the middle of the pack.
Jessica Feil, a lobbyist with the gaming association, said the industry believes a tax rate in the low teens is ideal. While Virginia has more vendors interested in providing gaming than it can approve, she said a higher tax rate might scare off potential operators, especially in a nascent market like Virginia.
While lottery proceeds in Virginia are dedicated to education, tax revenue from sports gambling will go to the state's general fund.
Hall said estimates show that the state will get $4 to $5 million in the first year, but that will grow in subsequent years as the market establishes itself to as much as $55 million a year.
Another unique feature included in the Virginia law is a sports bettors' “bill of rights” designed to protect the consumer. Those rules were revised after gaming companies complained. The original rules, for instance, required companies to provide the odds of a particular wager and the information used by the company to set the odds. Companies complained that their process for setting odds is proprietary, and that it's impossible to know the true odds of, say, who will win a football game.
State Sen. Jeremy McPike, D-Prince William, who sponsored the legislation establishing the sports betting program, said he's satisfied that the lottery regulations match legislators' intent to provide a level of transparency to bettors. And he complimented the lottery for getting the program to market so quickly in a state that has no history of casino-style betting.
Hall said the lottery expects to grant final approval to would-be operators sometime in January. Once that approval is granted, the companies are free to accept wagers as soon as they are ready. With NFL playoffs underway in January, companies will have a strong incentive to launch quickly to take advantage of some of the biggest weeks on the American sports calendar.