Virginia doesn’t have any casinos. But that plays perfectly into Delegate Mark Sickles’ vision of sports betting in the state. While neighboring Washington, D.C. struggles with where to locate brick-and-mortar sports betting parlors, and other states without casinos mull whether to put sports betting kiosks in convenience stores or build locations dedicated to sports betting, Sickles is all about the virtual world.
“We have one racetrack (Colonial Downs) in the state,” Sickles said. “They could get a license under my bill and they do have 10 or 11 off-track betting locations across the state, … but I’d like this to work on the iPhone.”
Sickles (D-District 43), who introduced HB 1638 in November, doesn’t want his state to invest in infrastructure or see casinos dotting the landscape. Rather, his goal is to make Virginia a mobile and interactive sports betting destination. And to take the money that the government earns from sports betting and invest it in rebuilding a state that has been struggling in a tough economy. But he’s not pie-eyed about it.
Virginia Sports Betting Revenue Would Fund Research
“Our lottery in Virginia does about $2 billion of business a year, and (the state) gets $600 million in net revenue, that’s pretty good,” he said. Sports betting “would not have that. But the money would go into research projects and an economic transformation in the state. We need to become a well-rounded economy.”
Virginia has traditionally relied heavily on the military as an employer. The Pentagon is located in Pentagon City, and Crystal City is home to myriad defense contractors. But it’s lost more than 15,000 jobs since 2000, when the Naval Air Systems Command left in 2000, followed by many others when the Pentagon’s 2005 Base Realignment and Closure Commission recommended cuts. And in the southwest corner of the state, which relies on coal mining, the economy has also struggled. What Sickles is hoping for is a revenue stream to help diversify and make his state financially healthy again.
But before he can realize that dream, sports betting must first become a reality. Whether that will happen in 2019 is up for debate. Sickles isn’t the only lawmaker who will introduce legislation. Senator Chapman Petersen (D-District 34) has promised to file a bill, and Delegate Marcus Simon (D-District 53) also says he’s drafting sports betting legislation.
But Sickles cautions against planning for legalization in 2019.
“There is a chance, even though there is widespread support for this, that the Speaker (Williams James Howell) may call for a one-year moratorium on sports betting,” Sickles said.
VA Lawmakers Could Put 1-Year Moratorium On Considering Sports Betting
Why? Several reasons that have nothing to do with sports betting directly. Two lawmakers in Bristol, which is right on the Tennessee border, are looking for a way to revitalize their town, and believe building a casino would help. In fact, two lawmakers held a press conference to showcase their idea in November. A casino in Bristol would be the first commercial casino in Virginia. In addition, members of the Pamunkey tribe, which does not have land in Virginia, but has been recognized by the state, announced plans to pursue opening a casino in Virginia early this year.
It’s possible that the state legislature will want to settle both of these issues before tackling sports betting. The state and tribe must negotiate a gaming pact before the tribe could open a gaming destination.
Sickles proposed a bill with a 15 percent tax on adjusted gross revenue, a $250,000 application fee, and a cap on the number of permits that could be issued. This bill names the Virginia Lottery as the regulating body, though Sickles doesn’t envision the lottery as having its own sports betting app.
Everything in the bill, however, is up for discussion. And just a few weeks in, Sickles is already planning an amendment to increase the number of available licenses from five to 10.
“I’ve been prevailed upon to increase it,” he said. “Why limit it? The idea was to give the lottery board the maximum amount of revenue for the state. Initially, the theory was that if you have too many, you might dilute the amount of money the state can make. So, there is some argument for exclusivity. And even under the five, each applicant could have two skins. But (upping the number to) 10 will be the first amendment.”
Sickles said he’s also open for discussion on the 15 percent tax rate, which is in the middle of the pack of tax rates among states with legal sports betting, and the application fee. Operators may find the 15 percent tax to be a bit on the high side, though. At 51 percent, Rhode Island has the highest sportsbook tax rate in the nation, but three of the other states that legalized in 2018 — Mississippi (8 percent state), New Jersey (9.75 percent) and West Virginia (10 percent) — have kept their rates even lower. New Jersey taxes revenue from mobile sports betting at 13 percent.
Likewise for the application fee and renewal fees — the bill calls for a $200,000 renewal every three years. Both are on the high end, though Pennsylvania is charging a $10 million application fee of states to legalize so far.
