Mobile sports wagering operators in Virginia broke the $40 million mark in gross revenue in May — just the second time they did that in the 17 months since launch — with a high hold offsetting the cyclical drop in betting handle.
The Virginia Lottery reported the state’s 14 operators combined to claim more than $42.5 million in gross revenue for May, which trails only the $48.3 million amassed last November. The 17.3% month-over-month increase in gross revenue came despite a 12% drop in handle to $351.5 million, compared to $399.5 million in accepted wagers during April.
Operators posted a 12.1% hold for gross revenue, which trailed only last July’s 12.3% win rate. It is the fifth time Virginia sportsbooks cleared 10%, and the third occasion it was higher than 12%. The Old Dominion remains a state with high promotional play, though May marked the first time in nine months credits awarded by operators added up to less than $10 million — but just barely, coming a mere $33,000 shy of eight figures.
Other deductions, including carryover, subtracted another $5 million from the revenue eligible for taxation. The state claimed 15% of the $27.5 million eligible to be taxed, resulting in an inflow of nearly $3.9 million into Virginia coffers. Despite slightly more than half of the $179.1 million in operator gross revenue going untaxed as promotional credits or other deductions through the first five months of 2022, Virginia still has accumulated more than $13.3 million in tax receipts — nearly $7.8 million more than the corresponding period in 2021.
A handle milestone and revenue notes
All-time Top 10 #SportsBetting handles post-PASPA by state (May in CAPS):
1 NEW JERSEY $27.93B
2 NEVADA $24.66B
3 PENNSYLVANIA $14.81B
4 Illinois $12.26B
5 INDIANA $8.09B
6 NEW YORK ~$7.9B
7 COLORADO $7.31B
8 MICHIGAN $6.28B
9 VIRGINIA $5.33B <–NEW
10 TENNESSEE $4.67B
— Chris Altruda (@AlTruda73) July 1, 2022
Virginia also became the ninth state to surpass $5 billion in handle since launch, joining New Jersey, Nevada, Pennsylvania, Illinois, Indiana, New York, Colorado, and Michigan in that select group. The Old Dominion, which conducts sports wagering exclusively online, has seen a 93% year-over-year rise in handle with more than $2.1 billion wagered in the first five months of the year.
That surge has led to both gross and adjusted year-to-date revenue totals running more than double versus the same period in 2021. The adjusted revenue of $88.7 million is 157.7% higher than last year, contributing to tax receipts more than doubling.
May marked the first time this year that adjusted revenue represented more than 60% of gross revenue and only the fifth time overall. The 64.7% ratio is third-best overall and the highest since the all-time high of 67.7% last June. Some of that revenue is driven by aggressive promotional spend by operators, which has totaled nearly $68 million this year — a 65.6% increase versus the same five-month span in 2021.
The Virginia Lottery does not disclose handle and revenue figures by operator or sport but did note five operators — the same number as in April — finished with a net positive adjusted revenue that made them eligible to pay taxes.