The Virginia Lottery awarded three mobile sports betting licenses to Betway, PointsBet and the UK’s 888 Holdings in late November, bringing the total number of operators allowed to operate in the Old Dominion to 13.
888 formed a joint venture with the parent company of Sports Illustrated (SI), Authentic Brands Group (ABG), in June. The partnership was designed to launch an SI-themed sportsbook in the US.
Virginia will be the second US state with SI Sportsbook, after launching in Colorado in September.
“We are delighted to have been awarded our license by the Virginia Lottery,” said 888 Holdings’ Senior Vice President and Head of US Yaniv Sherman. “This is an important milestone for 888 which enhances our foothold in the US online sports betting and iGaming market.”
“There is a growing sports betting fanbase in the state and I firmly believe that SI Sportsbook, supported by our partners at SI, will offer a unique and differentiated experience to our customers which will be well-received.” 888 plans to launch SI Sportsbook in Virginia sometime in 2022.
The Lottery could award one or two more mobile sports betting licenses before the end of the year.
Lucky 13
With the addition of Betway, PointsBet and 888, the Virginia Lottery has now authorized 13 sportsbooks to operate in the Old Dominion. Ten of the operators are currently live.
The Lottery awarded licenses to five operators in January. The move enabled BetMGM, BetRivers, Caesars Sportsbook, DraftKings and FanDuel to take bets on Super Bowl LV in February.
Four additional operators—WynnBET, Golden Nugget, Bally Bet and Barstool Sportsbook—were awarded licenses in March and were followed by Unibet in April. The group launched at different times between Super Bowl LV and the start of the 2021 NFL season: WynnBET in March, Unibet in April, Barstool in August, Golden Nugget in October and Bally Bet in November.
A changing regulatory landscape
Sports betting became legal in Virginia in April 2020, after the General Assembly passed legislation empowering the Virginia Lottery to regulate the practice. The Lottery initially received 25 applications from sports betting operators for licenses, but did not disclose who the operators were. VA online sportsbooks didn’t launch until January 2021.
The initial legislation from 2020 allowed the Lottery to award a minimum of four mobile-only licenses and a maximum of 12. The 2020 legislation also stipulated that four brick-and-mortar casinos under construction in Virginia—in Bristol, Danville, Norfolk and Portsmouth—could also be awarded mobile licenses, and that those four licenses would not count against the minimum of four imposed by the state. But the 2020 legislation established that any mobile licenses awarded would count against the cap of 12.
Operators were also allowed to partner with racetracks, and with major league sports franchises that either have their headquarters in the state, or that build a new stadium in Virginia. The 2020 legislation said the latter partnerships would not count against the cap of 12 mobile-only sportsbooks, either.
Virginia Gov. Ralph Northam signed revised legislation in March 2021 that removed the verbiage where mobile sports betting licenses awarded to land-based casinos counted against the cap. The Lottery received an additional 18 applications in May 2021. At the time, the Lottery said they could add up to an additional five licenses in 2021, meaning one or two may still be awarded in December.
Hard Rock is developing a casino in Bristol, while Caesars is building a casino in Danville. Meanwhile, BetRivers’ parent company, Rush Street Gaming, is building Rivers Casino Portsmouth and the Pamunkey Indian Tribe is developing the HeadWaters Resort & Casino in Norfolk. While it’s unclear who the Pamunkeys would partner with for an online sportsbook, Hard Rock is likely to develop their own in-house.
FanDuel is partnered with the Washington Football Team, while PointsBet is partnered with Colonial Downs Group, which operates the Colonial Downs Racetrack in New Kent.
While the Virginia Lottery has not identified any of the operators to have sought licenses, Virginia regulatory town hall records show three additional operators — Handle 19, theScore Bet and US Bookmaking — submitted public comments on the state’s gaming regimen in September 2020. The three operators are still likely to be interested in obtaining a license in the Old Dominion.
Record handle in October
Data from the Lottery show Virginians wagered a record $427.3 million in October, up 45% from September. The Lottery said the record handle was tied to five weekends of college football and NFL action during the month. Year-to-date, the handle totaled about $2.4 billion, according to the Lottery.
After subtracting gross winnings to players, as well as costs for bonuses and promotions, adjusted gross revenue was about $9.8 million in October. Year-to-date adjusted gross revenue totaled $90.8 million. Operators spent $15.8 million on bonuses and promotions in October, and $90 million to date – nearly the same amount that operators made in adjusted gross revenue.
Virginia levies a 15% tax on sports betting activity, of which 97.5% of the tax revenue is deposited in the state’s general fund while the remaining 2.5% is allocated to its Problem Gambling Treatment and Support Fund, which is administered by the state Department of Behavioral Health.
According to the Lottery, the state took in $1.7 million in tax revenue from online sports betting in October, about $44k of which is earmarked for the problem gambling fund. Year-to-date, online sports betting has generated $14.4 million for the state, including $359k for the problem gambling fund.
