Virginia legislators last year passed a budget amendment prohibiting sports betting operators “from excluding bonuses or promotions used to encourage betting from their adjusted gross revenue 12 months after they begin sports betting activity in Virginia.”
The move was made to help the state better take advantage of potential tax revenue from legal sports betting, as the state’s collections were significantly reduced by the volume of promotions prior to the change.
Operators weren’t thrilled with the change, and some legislators are pushing to reinstate the promotional tax deductions in some capacity. A bill recently passed through the Virginia Senate that would allow sportsbook operators that have operated in the state for more than a year to exclude promotions from taxable revenue, up to 1.75% of their monthly handle.
The bill, SB 1142, is expected to be discussed in detail in the Virginia House in the near future.
The Virginia House General Laws Committee quickly referred the bill to the House Appropriations Committee on Thursday. It’s unclear when the Appropriations Committee will discuss the bill, although the state’s legislative session only lasts through Feb. 25, creating a time crunch to analyze the bill.
Operators are hoping to be permitted again to deduct some level of promotions from tax revenue, citing promotions and boosts as a way to lure customers away from the illegal, unregulated sports betting market.
“We were pleased to see the bill overwhelmingly pass the Senate and look forward to continuing working with the House of Delegates,” Nathan Click, spokesperson for the Sports Betting Alliance, told Sports Handle via email. “Promo credits help legal sports betting operators compete with the illicit market, and we are glad to see this progress in the state capital.”
Virginia’s mobile sports betting market includes major national operators such as BetMGM, DraftKings, and FanDuel. Those three have been operational in Virginia for over 12 months, and they’re all members of the Sports Betting Alliance along with Fanatics Sportsbook.