There was likely a collective sigh of relief released by sports betting operators across the country on Wednesday morning when Virginia Lottery Executive Director Kevin Hall said these words: “It’s safe to say that we won’t.”
The “won’t” refers to requiring prospective operators to keep a 10% hold on sports betting revenue, similar to what neighbor Tennessee will do. Hall referred to the practice as “controversial” and said “that by guaranteeing a 10% hold, it makes the odds worse” and encourages consumers to continue to bet offshore.
Hall spoke at a Virginia Lottery Commission meeting after which the Lottery planned to release its proposed sports betting regulations and continue its sprint to Sept. 15, the date on which law mandates regulations be approved. During the meeting Hall shared an updated timeline for getting from legal to live with sports betting, the highlights of which are the regulation-approval date of Sept. 15 and a goal of being prepared for operators to go live by January 2021.
Proposed regs will come in two parts
Ahead of the release of the proposed regulations, Hall said they will come in two parts. Today’s draft regulations will include most of the nuts and bolts, including the timeline, how the application process will work, a clear definition of what sports will be available to bet on, advertising guidelines, and the Consumer’s Bill of Rights that is required by law.
On Aug. 10, the Lottery projects it will release supplemental proposed rules that will include financial controls, operational and technical requirements, and internal controls.
Besides sports betting, Hall gave an update on the status of the five proposed retail casinos that the state legislature approved. All five require vote approval via referendum. The cities of Bristol, Danville, Norfolk, and Portsmouth were all notified that their casino partners were pre-approved by the Lottery. The fifth city, Richmond, Hall said, is on a different timeline and it did not request approval for a casino partner.
In Tennessee, which approved sports betting a year ago, the Tennessee Education Lottery will require operators to hold back 10% of handle and cap payouts to bettors at 90%. It is the only state to have such a cap, and will translate into some less attractive odds. There was some concern among stakeholders that with the lottery running sports betting in Virginia, that it, too would consider a payout cap.
What’s in the new law
Virginia lawmakers in April approved legal sports betting in the commonwealth, which has no existing casino infrastructure. It took plenty of wrangling between not only both legislative chambers, but also Gov. Ralph Northam before an agreement was reached. Highlights of the new law:
- Operators will be taxed at 15% of gross gaming revenue;
- The application fee is set at $250,000 for a three-year license;
- Sports betting will be legal statewide via online/mobile platforms and at bricks-and-mortar locations at the proposed casinos and two professional sports facilities; and
- Consumers will be able to bet on professional and college sports, but not Virginia college teams.
Most sports betting in Virginia will be online/mobile, and lawmakers are requiring a minimum of four mobile licenses and a maximum of 12, though that number could fluctuate based on the text of the law, which allows for casinos and professional sports venues to host sports betting and for the latter to not count against the maximum number of licenses.
