When the D.C. Council in December 2018 approved legal sports wagering, it did so with the idea that it would capture the regional market well ahead of neighbors Virginia and Maryland. More than a year after that vote, D.C. is still a few months away from having live sports betting, and it might be time for the District to start looking over its shoulder.
Twice in the last two days, Virginia lawmakers have taken action on sports betting bills — one each on the House and Senate sides. Both would legalize only mobile sports betting and require the use of official league data.
On the Senate side, Jeremy McPike’s SB 384 moved out of the General Laws and Technology Committee to the Appropriations Committee on Wednesday. The bill, which makes the Virginia Lottery the regulator, caps the number of mobile licenses at 10, but also requires a minimum. From the bill: “The Director shall … issue an amount of permits that he determines will be most likely to maximize tax revenue collected pursuant to § 58.1-4037. ”
Lawmaker trying to avoid a monopoly?
Calling for a minimum number of licensees could be in response to how other state lotteries have acted when tasked with regulating sports betting. For example, in New Hampshire, where the lottery was also named regulator, DraftKings won a monopoly on retail and mobile sports betting late last year. Under the new law there, up to 10 retail and five mobile licenses could have been issued.
During Wednesday’s subcommittee meeting, the tax rate in the bill on gross gaming revenue was lowered from 20% to 15%, which is considered by operators to be at the very top edge of what’s manageable from a business perspective.
SB 384 also includes a mandate for the use of official league data. As is also found in legislation around the country, the bill calls for official league data to be available for “commercially reasonable terms,” though no state has yet defined what that means. So far, three states — Tennessee, Illinois and Michigan — have legalized sports betting with a data mandate, but the concept hasn’t been put into practice, although Michigan has given some contours for reasonableness standards. No state with live sports betting has the data requirement.
House bill resembles Senate version
On the House side, the Gaming Subcommittee on Tuesday voted to combine HB 896 and 911 and refer the combined bill to the General Laws Committee, which sent it to Appropriations with a 14-3 vote on Thursday.
HB 896, which is the bill that would be moving forward, would legalize mobile sports betting only, and is similar to a 2019 bill, which was also authored by Democrat Mark Sickles. At the time, Sickles said Virginians want sports betting online and didn’t want casinos popping up around the state. This version of the bill would allow for wagering on pro sports only, includes a data mandate, sets the betting age at 21, sets a 20% tax on gross gaming revenue, and makes the Lottery the regulator. HB 911, which will no longer stand alone, called for a 10% tax rate, so it’s likely the tax rate will be negotiable throughout the legislative process.
The bill would also make it legal for the Lottery to sell tickets via the internet.
Virginia lawmakers weren’t able to move sports betting forward last year during a short session. This time around, they’ll have about a month longer to act. The session ends on March 8.