As known from:
VA
  • Our US Squad
  • Our Mission
  • How We Rate Betting Sites
Contains commercial content
PlayersBest.com / Virginia Limits Sportsbook Tax Deductions For Promotional Offers

Virginia Limits Sportsbook Tax Deductions For Promotional Offers

Publish Date:07/28/2022

Virginia online sportsbooks have enjoyed the ability to deduct promotional expenses from their taxable revenue since sports betting was legalized in the state in January of 2021. The new state budget has put an end to the tax break, limiting the deductions for sportsbooks to one year following their launch.

Virginia Limits Sportsbook Tax Deductions For Promotional Offers

Heavy promotional expenditures have limited Virginia’s tax revenue

Virginia Lottery Deputy Director of Gaming compliance Gina Smith announced that a state budget amendment will accomplish what the state’s legislative body could not – eliminating the ability for online sportsbooks in the state to exclude their promotional expenses from the gaming revenue they pay a 15% tax on. When sports betting was legalized in the state in January of 2021, operators were allowed unlimited deductions for free bets and other incentives offered to players. Under the new state budget, online sports betting sites will be limited to a one-year period after their launch where their promotional expenditures are tax deductible.

The new tax rules went into effect on July 1, and the timing means that online sportsbooks that launched in day one in Virginia are immediately liable for taxes on their promotional spending immediately. Seven of the state’s 14 operators, including most of the top online sportsbooks including DraftKings, FanDuel, Caesars, and BetMGM, fall into that category. An eighth, Barstool Sportsbook, will pass the one-year threshold in early August and be added to the list of companies paying up on their promo spending. Language in the budget still allows for operators to carry over monthly losses when assessing their taxable revenue for subsequent profitable months.

More than half of the state’s tax revenue lost to promotional spending

The move comes 18 months after legal sports betting in the state, and taking a look at the numbers shows why there was urgency to eliminate the tax break. Through May of 2022, the state’s online sportsbooks had taken in more than $2.1 billion in total handle, but have paid only $33.7 million in taxes on the revenue generated. Had they been taxed under the new rules, they would have been on the hook for more than $69 million in taxes during the same period. Heavy promotional spending in the large and competitive market has made a huge dent in the revenue the state would have received, with the top US bookmakers in the state battling each other for each and every new customer.

Nearly $68 million in total has been deducted from taxable revenue by the state’s sportsbook. Many of the smaller sportsbooks in the state have yet to pay any taxes at all, with the promotional expense exemption a major reason why. The flurry of offers to attract new customers and acquire market share has been common in most states as legal sports betting has become legal, but while it is tapering off slowly elsewhere, the new tax code will likely bring things to a crashing halt in Virginia. The one-year window however will afford a brief period where a handful of smaller sportsbooks in the state hold a financial advantage, and Virginia bettors could be treated to a “finale” of promotional offers from those sportsbooks as they attempt to maximize the window where their promotional expenses can be deducted.

Lining reality up with expectations

As states push to legalize sports betting, legislators and/or voters are drawn in with anticipation of huge amounts of tax revenue flowing into the state’s coiffers. While in many states these projections have proved either accurate or even too conservative, in others, tax revenue has fallen short of expectations in spite of robust handle and hold numbers. That was the case in Virginia, as well as in Colorado where the state altered their initial legal sports betting legislation to put a cap on the percentage of sportsbook revenue that would be able to be deducted as promotional expenses.

The downside for bettors in the state is that the lucrative Virginia betting bonus benefits they have received from sportsbooks in the past will likely be drastically reduced. Savvy bettors have been able to take advantage of these offers to drastically reduce their initial risk, but with the offers hitting the books’ bottom lines much harder under the new tax code, the natural step from operators is to reign in promotions and rely on other methods to bring new bettors into the fold.

Best Virginia betting sites – March 2024

Bet365
1.
Favicon
4.7/5
First Bet Safety Net up to $2000 OR Bet $5 and Get $150
Virginia
Players from Virginia accepted
Virginia (US) Lottery Board
Visit Site
At bet365 we don’t do ordinary, that’s why if you sign up now you’ll get the choice of two great New Customer Offers, the First Bet Safety Net up to $2000 or Bet $5 and Get $150 in Bonus Bets. Deposit required. Bonus Bets wager excluded from returns. T&Cs, time limits and exclusions apply. Gambling Problem? Call 1-800-Gambler 21+
BetMGM
2.
Favicon
4.7/5
Bet $5 Get $150 Instantly in Bonus Bets
Virginia
Players from Virginia accepted
PayNearMe
PayPal
Bank Transfer
Virginia (US) Lottery Board
Visit Site
T&Cs apply, 21+
FanDuel
3.
Favicon
4.6/5
Bet $5 Get $150 in Bonus Bets
Virginia
Players from Virginia accepted
Prepaid Card
PayNearMe
PayPal
Virginia (US) Lottery Board
Visit Site
T&Cs apply, 21+
Caesars
4.
Favicon
4.5/5
100% up to $1000
Virginia
Players from Virginia accepted
E-Check
PayNearMe
Skrill
Virginia (US) Lottery Board
Visit Site
T&Cs apply, 21+
DraftKings
5.
Favicon
4.5/5
No Sweat First Bet up to $1,000 + All-Customer SGP Insurance
Virginia
Players from Virginia accepted
PayPal
VIP Preferred
Play+
Virginia (US) Lottery Board
Visit Site
T&Cs apply, 21+

Read Also
New York State Passes $7 Billion In Total Handle
New York state is one of the more recent entries into the ...
Kansas Legalizes Sports Betting, Could Launch For Football Season
In latest legal gambling news, and after a contentious battle, Kansas has ...
BetMGM Promo
Sports Betting Legalized In Maine
Maine became the latest state to legalize sports betting when Governor Janet ...
Majority of Kentucky Voters Support Legalizing Sports Betting 2024
Kentucky is one of the US states that are famously still dragging ...
Arkansas online casinos unable to take Super Bowl bets
Following a last-second decision from the attorney of the Arkansas Racing Commission, ...
Latest News
How Do Sweepstakes Casinos Work? – A Brief Intro to Sweeps Casinos
Sweepstakes casinos and social casinos are big news ...
Social Casino Stocks – The Best Options Available
The casino sector has long been a favorite ...
Cincinnati Bengals Ink Their First Sports Betting Partnership
The imminent launch of legalized sports betting in ...
California Democratic Party Confirms Opposition to Online Sports Betting
The Resolutions Committee of the California Democratic Party ...
Big MLB Handle Keeps Nevada Sportsbooks From Slipping in May
The Nevada Gaming Control Board has released the ...
Top Betting Sites
Top Betting Bonuses
Bet365
Bet365
Bet365 Review
4.7/5
BetMGM
BetMGM
BetMGM Review
4.7/5
FanDuel
FanDuel
FanDuel Review
4.6/5
Caesars
Caesars
Caesars Review
4.5/5
DraftKings
DraftKings
DraftKings Review
4.5/5
Bet365
Bet365 Bonus
First Bet Safety Net up to $2000 OR Bet $5 and Get $150
T&Cs apply
4.7/5
At bet365 we don't do ordinary, that's why if you sign up now you'll get the choice of two great New Customer Offers, the First Bet Safety Net up to $2000 or Bet $5 and Get $150 in Bonus Bets. Deposit required. Bonus Bets wager excluded from returns. T&Cs, time limits and exclusions apply. Gambling Problem? Call 1-800-Gambler 21+
BetMGM
BetMGM Bonus
Bet $5 Get $150 Instantly in Bonus Bets
T&Cs apply
4.7/5
FanDuel
FanDuel Bonus
Bet $5 Get $150 in Bonus Bets
T&Cs apply
4.6/5
Caesars
Caesars Bonus
100% up to $1000
T&Cs apply
4.5/5
DraftKings
DraftKings Bonus
No Sweat First Bet up to $1,000
T&Cs apply
4.5/5
What does it take to win? Sign up now and find out!
white-paper-teaser
Winning Bettors aren’t born, they’re trained. Sign up now for our free eBook and Newsletter with the best deals on the web.

Submit your email to receive PlayersBest eBook and regular newsletters with exclusive bonus offers via email. Unsubscribe at any time.
What does it take to win? Sign up now and find out!
Winning Bettors aren’t born, they’re trained. Sign up now for our free eBook and Newsletter with the best deals on the web.

Submit your email to receive PlayersBest eBook and regular newsletters with exclusive bonus offers via email. Unsubscribe at any time.

Players must be 21 years of age or older or reach the minimum age for gambling in their respective state and located in jurisdictions where online gambling is legal. Please play responsibly. Bet with your head, not over it. If you or someone you know has a gambling problem, and wants help, call or visit: (a) the Council on Compulsive Gambling of New Jersey at 1-800-Gambler or www.800gambler.org; or (b) Gamblers Anonymous at 855-2-CALL-GA or www.gamblersanonymous.org.

This site is using Cloudflare and adheres to the Google Safe Browsing Program. We adapted Google's Privacy Guidelines to keep your data safe at all times.

21+NCPG
Close
Our Players deserve the best. Check out the best offers around, recommended by our team
×
Your Promo Code:
The bonus offer of was already opened in an additional window. If not, you can open it also by clicking the following link:
Visit Site