Virginia’s tax revenue from sports betting and casinos has outpaced the forecasts made by fiscal analysts four years ago, at the time when the state was considering expanding its range of legalized gambling.
Virginia Lottery figures indicate that tax revenue from sports betting more than doubled during fiscal year 2023, surging from $27 million in the previous year to an impressive $67 million, The Virginia Mercury reported. In contrast, a state gambling study conducted four years ago had anticipated annual tax revenue of up to $55 million from sports betting once the industry reached full maturity.
The substantial revenue increase can be largely attributed to a recent tax policy adjustment that disallowed established sports betting companies such as FanDuel and DraftKings from deducting the expenses associated with free bet promotions and wagering bonuses from their state tax obligations. However, the total sports betting volume in Virginia also experienced growth, rising from approximately $4.2 billion in fiscal year 2022 to $5.1 billion in fiscal year 2023.
Virginia lawmakers endorsed the legalization of sports betting in 2020, with digital sports betting platforms launching in the state early in 2021.
Meanwhile, Virginia’s nascent casino industry, still in the construction phase, also appears to be outperforming initial expectations, as per Lottery figures. Despite several casinos operating from temporary locations while their larger facilities are under construction, they have demonstrated robust financial performance.
The temporary Hard Rock Casino in Bristol, which commenced operations in July 2022, reported $157 million in net gambling revenue during its inaugural year, surpassing the $130 million initially projected by the state study for a fully established casino, the report said. This resulted in nearly $26 million in tax revenue, distributed between local governments and a state fund dedicated to school construction and upgrades.
Rivers Casino Portsmouth, which began operations in January and was initially projected to generate $167 million in annual gambling revenue, had already accrued $120 million in net revenue by the end of June, coinciding with the state’s fiscal year conclusion. The Portsmouth facility contributed approximately $17.9 million in tax revenue.
Rivers Casino Portsmouth
The recently inaugurated temporary Caesars casino in Danville recorded $31 million in gambling revenue during May and June alone. In contrast, the 2019 state study had forecasted annual gambling revenue of $190 million for a Danville casino.
Another casino project is underway in Norfolk, while Richmond is set to vote again this fall on a casino proposal after an initial ballot referendum in 2021 failed to gain approval.
As gambling opportunities expand in Virginia, policymakers have instituted regulations to allocate a portion of the revenue for assisting individuals dealing with gambling-related problems. In fiscal year 2023, nearly $2.6 million was designated for problem gambling resources, with a significant portion directed toward local community service boards already engaged in addressing addiction and mental health issues.
During Tuesday’s meeting, Virginia Department of Behavioral Health and Developmental Services Commissioner Nelson Smith estimated that approximately 2% of Virginia’s population could be affected by problem gambling.
Original article: https://www.yogonet.com/international/noticias/2023/09/25/68899-virginia-casino-sports-betting-tax-revenue-soars-beyond-initial-predictions
