Virginia Sports Betting Bill Filed Ahead of 2019 Session

Virginia on Tuesday became the latest state to make an earnest move toward legalizing sports betting in 2019 when Delegate Mark Sickles (D-District 43) prefiled HB 1638 ahead of the opening of the legislative session on Jan. 9, 2019. The bill, which will be referred to committee for discussion, calls for a 15 percent tax rate on sports betting adjusted gross revenue, and a $250,000 licensing fee. There is no mention of a “royalty” or “integrity fee” to be paid to the professional sports leagues.

Lawmakers in Tennessee and Kentucky have also prefiled bills ahead of their sessions and several other states, including Michigan, Maryland and Massachusetts have publicly discussed sports betting recently.

Since the Supreme Court struck down the Professional and Amateur Sports Protection Act in May, seven states states outside of Nevada have either legalized or seen its authorized licensees begin accepting sports bets. Although Virginia is very much not a gaming state as casinos are prohibited by law, apparently sports betting may be on the table.

Bill to Legalize Virginia Sports Betting Pre-filed For 2019: Would Allow Up to Five Operators, Calls for 15 Percent Tax and  $250K Application Fee

Chapter 40 of HB 1638 is called the “Virginia Lottery Law,” and one section deals specifically with sports betting. The bill calls for the Virginia Lottery to become sports betting’s regulatory body and, according to Article 2, Section D, the state will issue up to only five sports betting permits.

D. The Director shall issue no more than five permits pursuant to this section; however, if a permit is revoked, expires, or otherwise becomes not effective, such permit shall not count against the limit. If there are more than five applicants, the Director shall issue permits to those five applicants who he determines will be best able to meet the duties of a permit holder, as specified in §58.1-4034, and maximize tax revenue pursuant to §58.1-4036.

At a 15 percent tax rate, very reasonable compared to some other states, expect there to be lots of applicants if the opportunity to apply arises.

Virginia is home to a handful of live horse-racing tracks, as well as off-track betting establishments. But should sports betting be legalized, key to the decision will be where it will take place — in person, over the internet, or both?

The bill appears to allow betting on mobile devices and on the internet (called “sports betting platforms“), limited of course to those within state borders.  The bill does not address where bettors would register for these platforms.

Of course, absent sportsbooks at casinos or any casinos period where patrons could register, in a relatively large state, it seems likely regulators would allow residents across the state to register online or via apps, as is the case in New Jersey and soon in Pennsylvania. Such technology certainly exists.

VA Sports Betting Bill Would Prohibit Betting on Local Sports Teams, Including University of Virginia and Virginia Tech

Among other key points:

• Sports betting permits are valid for three years and then subject to a $200,000 renewal fee;
• Apparently the state lottery itself could get in the mix by “establishing a program, to be directed by the Director, under which the Department operates a sports betting platform.”
• Bets may not be placed on Virginia college sports teams (for example, University of Virginia and Virginia Tech); and
• Any “competitor, coach, trainer, employee, or owner of a team in a professional sports event, or any referee for a professional sports event” will be prohibited from placing a sports bet.

In general, there is nothing out of the ordinary about the bill, and the 15 percent tax rate falls within the bounds of what many states have been doing. Nevada taxes at a nationwide low of 6.75 percent while Rhode Island’s 51 percent on net revenue is the highest. Rhode Island’s Twin River Casino, which is in partnership with the state lottery, is projected to open this week.

Virginia lawmakers are likely beginning to feel some pressure to at least discuss sports betting, since the District of Columbia appears on the cusp of legalizing sports betting, neighboring West Virginia began rolling out sports betting late summer, and western neighbor Kentucky seems poised to legalize sports betting sooner than later. In addition, a recent Washington Post poll in Maryland showed that the majority of residents there favor legal sports betting.