• About Us / Contact
  • Responsible Gambling
This site contains commercial content
SportsHandle
  • US Sports Betting
    • Arizona
    • Arkansas
    • Colorado
    • Connecticut
    • Delaware
    • Illinois
    • Indiana
    • Iowa
    • Kansas
    • Louisiana
    • Maine
    • Maryland
    • Massachusetts
    • Michigan
    • Mississippi
    • New Jersey
    • New Mexico
    • New York
    • Ohio
    • Oregon
    • Pennsylvania
    • Tennessee
    • Virginia
    • West Virginia
    • Wyoming
  • Pending States
    • California
    • Florida
    • Georgia
    • Missouri
    • North Carolina
  • Canada
    • Ontario
    • British Columbia
    • Alberta
  • Sportsbook Apps
    • FanDuel
    • BetMGM
    • Caesars
    • PointsBet
    • BetRivers
  • Tools
    • Sportsbook Bonuses Explained
    • Sports Betting Revenue Tracker
    • Sports Betting Podcasts
    • Partnership Tracker
    • Expected Value
    • Sports Scores And Odds Apps
    • Sports Betting Twitter
  • News
No Result
View All Result
SportsHandle
  • US Sports Betting
    • Arizona
    • Arkansas
    • Colorado
    • Connecticut
    • Delaware
    • Illinois
    • Indiana
    • Iowa
    • Kansas
    • Louisiana
    • Maine
    • Maryland
    • Massachusetts
    • Michigan
    • Mississippi
    • New Jersey
    • New Mexico
    • New York
    • Ohio
    • Oregon
    • Pennsylvania
    • Tennessee
    • Virginia
    • West Virginia
    • Wyoming
  • Pending States
    • California
    • Florida
    • Georgia
    • Missouri
    • North Carolina
  • Canada
    • Ontario
    • British Columbia
    • Alberta
  • Sportsbook Apps
    • FanDuel
    • BetMGM
    • Caesars
    • PointsBet
    • BetRivers
  • Tools
    • Sportsbook Bonuses Explained
    • Sports Betting Revenue Tracker
    • Sports Betting Podcasts
    • Partnership Tracker
    • Expected Value
    • Sports Scores And Odds Apps
    • Sports Betting Twitter
  • News
No Result
View All Result
SportsHandle
No Result
View All Result

FanDuel Dominates In Virginia

Change in rules regarding promotional revenue should lead to more tax revenue

Chris Altruda by Chris Altruda
October 11, 2022
in Analysis, Industry
Virginia FOIA sports wagering

Shutterstock

Share on FacebookShare on Twitter

A banner 2022 for FanDuel can include Virginia, where it is the only mobile sports betting operator to generate more than $1 billion handle and claim more than $100 million in gross revenue through the first seven months of the year.

The Virginia Lottery fulfilled a Freedom of Information Act request fromΒ Sports Handle that included monthly revenue reports spanning January through July. The state recently changed its rules regarding deductions for promotional revenue, which has already proven to have a notable impact on monthly adjusted revenue totals subject to a 15% tax rate.

The Virginia Lottery does not provide handle and revenue information by operator or by sport category in its monthly public report, with the most important second-level information provided being the number of operators that finished with a positive AGR eligible for taxation.

The request did not include the most recent report for August, which was being compiled at the time the FOIA request was made, but the promotional revenue total showed a dramatic falloff similar to July compared to when operators were allowed to claim substantial amounts. Additionally, operators were permitted to carry over negative adjusted revenue totals from month to month that lessened tax receipts.

BetMGM handle could be biggest surprise

Given FanDuel’s popularity and first mover status regarding same-game parlay wagering, there is little surprise at the separation it achieved in Virginia this year. The sportsbook cleared $109 million handle each of the first seven months of the year and surpassed $21 million in gross revenue in both April and May. FanDuel’s 10.1% hold on gross revenue was also the highest among the 10 operators that have accepted wagers throughout 2022, edging out BetMGM for that top spot.

OperatorHandleGross RevenueGross Revenue Win RateAdjusted RevenueAdjusted Revenue Win Rate
FanDuel$1,092,218,260$110,580,50210.12%$79,390,3457.27%
DraftKings$598,644,647$43,234,8637.22%$21,006,5483.51%
BetMGM$528,944,316$52,025,7599.84%$17,824,4633.37%
Caesars Sportsbook$229,808,350$11,713,7685.10%$1,046,8460.46%
Barstool Sportsbook$80,444,134$5,142,1746.39%$3,005,0313.74%
PointsBet$66,459,477$4,470,0136.73%$577,3470.87%
BetRivers$31,813,462$1,597,5075.02%$48,8340.15%
WynnBET$25,845,148$1,536,3475.94%$303,5511.17%
Unibet$5,774,519$242,8504.21%$84,8061.47%
Bally Bet$3,614,660$93,4992.59%($277,393)-7.67%
Hard Rock*$2,947,374$160,8185.46%$25,1970.85%
SI Sportsbook*$1,137,744$128,59311.30%$2,9510.26%
Betway*$351,004$71,73020.44%$20,9845.95%

Keeping with BetMGM, Virginia may be its strongest showing as a No. 3 book to FanDuel and DraftKings. BetMGM was actually second in gross revenue at more than $52 million, and its $528.9 million was $70 million less than the $598.6 million in accepted wagers by DraftKings.

Caesars was a comfortable fourth with close to $230 million in accepted bets, while Barstool Sportsbook rounded out the top five for handle with more than $80.4 million. PointsBet was further back at $66.5 million, but the Australian-based book did double the handle of BetRivers, which was next in the pecking order at $31.8 million.

DraftKings rounded out the podium spots for revenue with more than $43.2 million, while Caesars was the only other operator to reach eight figures for the calendar year at $11.7 million. Barstool and PointsBet had close to $9.6 million in gross revenue between them.

A fabulous foursome for tax receipts

Of the 10 operators that started the 2022 calendar year accepting wagers in Virginia, only four of them — FanDuel, DraftKings, BetMGM, and Barstool Sportsbook — paid taxes in each of the first seven months. More importantly, there was never a month where any of the four carried over a loss to the following month that would have lowered the monthly taxable adjusted gross revenue. Barstool had the ability to do so in February, but no carryover amount was listed in its report.

Mobile OperatorJanuary-July 2022 Cumulative HandleJanuary-July 2022 Gross Gaming RevenueJanuary-July 2022 Monthly Noncash WinningsPercentage of Noncash Winnings from Gross Gaming RevenueJanuary-July 2022 Taxable Adjusted Gross RevenueJanuary-July 2022 State Tax Payments
FanDuel$1.1 billion$110.6 million$22.2 million20.0%$79.4 million$11,908,551
DraftKings
$598.6 million$43.2 million$12.3 million28.5%$21.0 million$3,150,978
BetMGM$528.9 million$52.0 million$27.4 miliion52.7%$17.8 million$2,673,669
Barstool Sportsbook$80.4 million$5.1 million$1.7 million33.3%$3.0 million$450,754
PointsBet$66.5 million$4.5 million$3.2 million71.5%$577,347$62,556
WynnBET$25.9 million$1.5 million$883,86857.5%$303,551$5,713
Caesars Sportsbook$229.8 million$11.7 million$6.4 million54.3%$1.1 million$0
BetRivers$31.8 million$1.6 million$1.4 million85.6%$48,834$0
Unibet$5.8 million$242,850$237,69497.9%$84,806$0
Bally Bet$3.6 million$93,499$331,462354.5%($277,393)$0

Of the four books paying taxes each month, BetMGM stood out as the outlier in terms of promotional revenue, which was a line called “Monthly Noncash Winnings” in examining the line-by-line deductions provided by the Virginia Lottery. BetMGM’s gross revenue was nearly $9 million more than DraftKings thanks in part to a 9.8% hold, but it also deducted $27.4 million as “noncash winnings.”

As a result, DraftKings finished with more cumulative monthly taxable adjusted revenue with $21 million compared to BetMGM’s $17.8 million when including the additional deductions of voided and canceled wagers, resettlements, adjustments, and the federal excise tax. The last of those deductions impacts high-volume operators more. As an example, FanDuel’s excise tax for the month of July was $268,198, while Bally Bet‘s was less than $550.

The other two sportsbooks among the 10 in full-year operations that paid taxes, PointsBet and WynnBET, did so in just one month. PointsBet’s levy in June was $62,556 after its best month since launching operations last December, and the nearly $685,000 in adjusted revenue outpaced the carryover from May to allow the Australian-based book to finish in the black. WynnBET made its lone payment of $5,713 in July, the most visible effect of the change in law which took effect in July prohibiting operators from claiming promotional deductions once they’ve conducted wagering for more than 12 months.

Carryover rules also play a big role

Most states that conduct wagering have some sort of rule regarding negative taxable revenue carryover, which allows an operator to “carry” a negative adjusted revenue amount into the following month to zero out the tax it would have paid the previous month. For example, if a sportsbook in Virginia finished with a -$100,000 adjusted revenue total for a given month, the 15% tax rate means there would be $15,000 in outstanding taxes. Should the sportsbook finish with a positive AGR the following month, the first $100,000 or less would go against that amount to zero out the taxes owed.

In the case of Virginia, operators are allowed to carry over negative AGR in perpetuity, which was a key reason four operators did not pay any state taxes the first seven months of the year, and why PointsBet and WynnBET paid relatively paltry amounts. Of the four operators that did not pay any taxes, only Bally Bet finished with a negative cumulative AGR before monthly carryovers.

Caesars, which generated close to $230 million handle from January through July, totaled slightly more than $1 million in AGR in that span. However, it also carried over a negative AGR from the end of 2021 and finished with a negative AGR in both January and February to further inflate that loss. By the end of February, Caesars was sporting an AGR of more than -$4.7 million — the largest deficit of any of the 10 operators.

From March to July, Caesars generated close to $8.8 million in gross revenue, but more than $2.7 million of that was classified as monthly noncash winnings and nearly $3.6 million were classified as additional deductions. Caesars finished with positive AGR each of those five months, but that revenue was not taxed, as it was put against the carryover of negative AGR Caesars had accrued since launch in February 2021.

Caesars ‘net AGR dropped under negative $2 million entering August, thanks in part to not being able to claim promotional deductions in July. The sportsbook finished with a monthly AGR of $733,240, or 64.7% of the more than $1.1 million in gross revenue for the month. Its total AGR of $313,606 for the first six months of the year accounted for less than 3% of the nearly $10.6 million in gross revenue.

Expect higher tax receipts going forward

As the months move forward, existing operators will continue to zero out their balances, though the pace will largely depend on how they fare as opposed to how much they can claim in monthly noncash winnings. The state record 13% hold for gross revenue reported for August may have accelerated the pace for operators to reach the break-even point, with nine operators finishing with positive adjusted revenue eligible for taxation.

Through the first seven months of 2022, that total never exceeded seven, and even that could be taken with a grain of salt, as some books — including Hard Rock, Betway, and SI Sportsbook — that finished with positive AGR beyond the “Big 4” were in their first months of operation.

Promotional revenue fell off the proverbial cliff when the new rules took effect, plunging from $7.8 million in June to less than $400,000 in July. It increased nearly three-fold in August to $1.1 million, but that figure will take a notable decline in October when Barstool crosses the 12-month threshold, and again in December when PointsBet does likewise.

The early returns, however, are encouraging for Virginia’s coffers. The nearly $4.5 million in tax receipts collected in August was an all-time monthly high and marked just the second time the total exceeded $4 million. There have been more than $7.5 million in tax receipts the last two months, and that accounts for 17.5% of the overall $43.1 million collected since launching in late January 2021.

ShareTweetShare
Chris Altruda

Chris Altruda

Chris Altruda has been a sportswriter with ESPN, The Associated Press, and STATS over more than two decades. He recently expanded into covering sports betting and gambling around the Midwest. His Twitter handle is @AlTruda73 and can be reached via email at [email protected]

Related Posts

Virginia 2023 February revenue report
Industry

Virginia Sports Wagering Revenue Dips Under $40 Million For February

March 31, 2023
Arizona January 2023 revenue report
Analysis

Arizona Puts Bow On Record-Setting January For U.S. Sports Wagering

March 27, 2023
Load More

Top Stories

taylor mathis

Taylor Mathis Got Sacrificed At The Altar Of Responsible Gambling

March 20, 2023
fanduel baseball wall

Premade Same Game Parlays Are Sucker Bets

March 13, 2023
maginfier-over-small-print

Read The Fine Print: A Proposed Federal Rule Could Change Everything For Indian Gaming

March 6, 2023
roman reigns wwe

Colorado Denies Report Stating That It’s Considering WWE Wagering

March 8, 2023

State Sports Betting Guides

Ohio (U.S. state) flag waving against clear blue sky, close up, isolated with clipping path mask alpha channel transparency, perfect for film, news, composition

Ohio Sports Betting – All Online Sportsbooks, Bonus Offers, and News 2023

by Brian Pempus
March 31, 2023

Downtown Detroit at twilight (Shutterstock)

Michigan Sports Betting – Where To Play, Online Sportsbooks, And FAQ

by Brett Smiley
March 27, 2023

VA captial

Virginia Sports Betting – Where To Play, Online Sportsbooks And Bonus Offers

by Brett Smiley
January 17, 2023

nj flag

New Jersey Sports Betting — Where To Play, Online Sportsbooks, And FAQ

by Brett Smiley
March 22, 2023

pa online sportsbooks

Pennsylvania Sports Betting – Where To Play, Online Sportsbooks And Bonuses

by Brett Smiley
October 6, 2022

Canada Sports Betting Guides

Canada Sports Betting – Best Sportsbook Apps & Bonus Offers

British Columbia Sports Betting – Legal Update, Available Sportsbooks, and FAQ

Ontario Sports Betting – Legal Status And Where To Play

SportsHandle

  • Analysis
  • Casino
  • Features
  • Horse Racing
  • Industry
  • Legal
  • Legislation
  • Opinion
  • Podcasts
  • Poker
  • Politics
  • Promotions
  • Regulation
  • Sports
  • Uncategorized

Better Collective

This website is owned and operated by Better Collective USA. Trademarks and copyrights referenced on this website are and shall remain the exclusive property of their respective owners and/or licensors. Please be sure to visit the operator’s website(s) to review their terms & conditions. We advise you to read these carefully as they contain important information. Copyright Β© 2023 USBets.com | Better Collective USA
21 Play Responsibly
Gamble Aware West Virginia
Gambling Problem? Call 1-800-Gambler.
GameSense

Search Sports Handle

No Result
View All Result
  • About Us / Contact
  • Responsible Gambling

No Result
View All Result
  • US Sports Betting
    • Arizona
    • Arkansas
    • Colorado
    • Connecticut
    • Delaware
    • Illinois
    • Indiana
    • Iowa
    • Kansas
    • Louisiana
    • Maine
    • Maryland
    • Massachusetts
    • Michigan
    • Mississippi
    • New Jersey
    • New Mexico
    • New York
    • Ohio
    • Oregon
    • Pennsylvania
    • Tennessee
    • Virginia
    • West Virginia
    • Wyoming
  • Pending States
    • California
    • Florida
    • Georgia
    • Missouri
    • North Carolina
  • Canada
    • Ontario
    • British Columbia
    • Alberta
  • Sportsbook Apps
    • FanDuel
    • BetMGM
    • Caesars
    • PointsBet
    • BetRivers
  • Tools
    • Sportsbook Bonuses Explained
    • Sports Betting Revenue Tracker
    • Sports Betting Podcasts
    • Partnership Tracker
    • Expected Value
    • Sports Scores And Odds Apps
    • Sports Betting Twitter
  • News