With two outs, two strikes and in extra innings, the Virginia General Assembly on Sunday morning passed amended bills in both the House and Senate. HB 896 and SB 384 would allow for state-wide sports betting for mobile players and a limited number of physical sportsbooks, set the tax rate at 15% on gross revenue, require the use of “official league data,” and prohibit betting on Virginia collegiate sports and prop bets on any individual collegiate athlete.
It took two tries for a conference committee of bill sponsors to agree to terms for legal sports betting, and while neither side was completely happy, compromise ruled the day. On the House side, sponsor Mark Sickles was disappointed to have to give up a complete prohibition on betting on college sports and on the Senate side, sponsor Jeremy McPike grudgingly allowed for the Virginia-team ban. The original Senate bill allowed for betting on all college sports.
The bill will now go to Governor Ralph Northam for signature. Should he ink it, Virginia would join West Virginia and Washington, D.C. with legal sporting wagers in the region. West Virginia has state-wide mobile and operators have been live in that state since 2018, while Washington, D.C. has legalities approved, but it’s not yet live. The Maryland General Assembly is currently considering a referendum bill that would send the decision to the voters. The bill could come up in the Senate this week.
With Sunday’s approvals in Virginia — by a margin of 59-35 in the House and 29-10 in the Senate — Virginia’s General Assembly also became the second legislative body in two days to approve in some fashion. On Saturday, the Washington House offered concurrence on an amended bill that will legalize tribal-only sports wagering with no mobile once Governor Jay Inslee signs it.
Number of online VA sportsbooks to be determined
The Virginia Lottery would be tasked with regulatory authority, required to promulgate rules by Sept. 15, 2020. The bill reads, “The [Lottery] Director may issue from four to twelve permits at one time and is directed to issue an amount of permits that would maximize tax revenue collected pursuant to the bill.”
Thus there is the opportunity for predominately online sportsbook operators to enter the market, which means DraftKings and FanDuel and others will be aggressively pursuing a pathway into the state, but it remains to be seen what kind of tug-of-war might ensue, or how the Lottery would determine how to best maximize tax revenue. In New Hampshire, legislation allowing for legal sporting wagers gave the state lottery the ability to offer licenses to up to 10 sportsbooks, however after receiving numerous proposals, officials ultimately decided to grant exclusivity in the state to DraftKings Sportsbook alone.
The Virginia bill also allows for the opening of five Virginia casinos in four cities — none of which are built yet — as well as the Colonial Downs racetrack and pro teams with headquarters in Virginia to have access to mobile sports wagering licenses.
The General Assembly also became the fourth to require the use of official league data, behind Tennessee, Illinois and Michigan, meaning licensed sportsbooks must obtain data feeds from a sports league’s governing body, or its third-party, in order to grade and settle in-game wagers, should the sportsbook offer them. Though most operators generally push against this requirement, it was not a key component of the discussion on either floor. Rather, the focus was on colleges, taxes, and provisions for professional teams based in Virginia.
Lawmakers not totally happy
During negotiations on Saturday, the Senate voted 37-2 for a second conference. By Sunday morning, a deal had been brokered. Sickles first introduced the revamped bill in the House saying, “Virginia sports cannot be bet on … and the Senate is livid about this, by the way.” But the measure easily passed. Less than an hour later, McPike was introducing the updated bill in the Senate.
“A few things were in dispute in regards to college betting, and specifically allowing betting on colleges,” he told his colleagues. “The Committee report (now) does not allow betting on Virginia teams, and there will be no prop bets on college athletes, on any individual college athletes. They cannot be bet on anywhere. We want to make sure no college athletes are bet on anywhere. Some Virginia athletes go elsewhere — mistakenly — but we should protect them.”
McPike also shared with the Senate changes other changes, and reminded the body of how online licenses will be handled for casinos and pro teams, and within minutes, it had passed.
Winding road to an approved deal
In Virginia, lawmakers in both chambers initially passed measures in mid-February, but the differing bills meant a conference committee was ordered. Most of the details were hammered out by last Thursday. The bills were close in terms of framework, but entering the conference, the chambers were at issue on the tax rate, whether or not to allow betting on college sports, the minimum and maximum number of mobile licenses to allow, and how to handle pro sports stadiums.
After nearly an hour of conversation late Saturday afternoon, the House rejected the initial conference report, 56-40, and asked the conference committee to come back with a bill that prohibits betting on college sports.
Much of debate centered around what some lawmakers see as the hypocrisy of colleges with big-time college sports.
“Getting lectured by the college presidents about exploiting athletes is really beyond the pale,” Sickles said during the debate.
Delegate Marcus Simon pointed out that continuing to allow an illegal market to thrive is likely “more damaging” than allowing people to bet on Virginia’s teams in a legal setting.
Stakeholders will likely have mixed feelings about Virginia’s bill. The data mandate has the potential to increase operating costs, and while state-wide mobile is where the money is at, and is the most effective way to stamp out the black market, banning betting on even a portion of college sports can allow the illegal market to continue to thrive.
