A New Virginia House Bill Gives Hope for Sports Betting in 2019
Delegate Mark Sickles (Dem) has pre-filed House Bill 1638 in Virginia, which would place oversight of sports betting under the state lottery. Legislators there believe this would not only help to provide the state some revenue, but it would also allow Virginia to rely less on the federal spending while also creating many jobs.
About House Bill 1638
Virginia House Bill 1638 is a partisan bill (Democrat 1-0) that was introduced on November 20th. It discusses problem gambling treatment, sports betting, and a Sports Betting Operations Fund, among other things. It directs the Virginia Lottery to regulate sports gambling.
Although the state does not have any racetracks or casinos, lawmakers there are looking to gain access to this relatively new taxable resource since the Supreme Court overturned the federal ban on sports gambling earlier this year. Since SCOTUS overturned PASPA 1991, or the Professional and Amateur Sports Protection Act that prohibited sports gambling outside of Nevada, several states have made the move to introduce legislation to make the activity legal, and to date, seven states other than Nevada have fully implemented sportsbooks: Delaware, New Jersey, Pennsylvania, West Virginia, Mississippi, Rhode Island, and New Mexico. Virginia’s bill, though, differs a bit compared to other states.
VA HB1638 defines sports betting as “a website, app, or other platforms accessible via the Internet or mobile, wireless, or similar communications technology that sports bettors use to place sports bets.”
The bill would exclude bettors from placing bets on any and all pro and collegiate sporting events that involve Virginia teams. It would also prohibit from making a sports bet any “competitor, coach, trainer employee, or owner of a team in a professional sports event or any referee for a professional sports event.”
The pre-filed bill would limit sports betting licenses to five, each for three-year terms. The initial cost would be $250,000 for a license, and the renewal fee for the same would be $200,000. The tax on revenue would be set at 15 percent. Two and a half percent of that would go to the Lottery as an administration fee.
Compare this with Rhode Island’s recent regulations that set the net revenue tax at 51 percent, which is the most in the U.S. to date.
Of the income from sports betting, the bill would suggest that 95 percent of the income would go to fund research projects at universities in the state via the “Major Research Project Sub-Fund.”
Oxford Economics Study
A study carried out by Oxford Economics projects that sports betting in Virginia will amount to a handle of at least $5 billion per year, working out to $380 million in net revenue each year. This means the 15 percent tax rate would bring in almost $60 million annually to the state.
Virginia State Lottery
The Lottery will benefit from this deal even more than the 2.5 percent it would receive via tax. When a web-based betting service opens, the Lottery would also be able to sell lottery tickets online, which will result in an increase of lottery sales.
Royalty or Integrity Fees
The bill doesn’t address integrity or royalty fees that would be paid to sports leagues. An integrity fee was publicly lobbied by professional sports leagues to get states to pay a percentage of their sports betting revenue to leagues like the NFL or MLB in order for the leagues to “protect the integrity” of the game.
Sickles’ pre-filing is the only official proposal put forward. However, he’s not the only lawmaker with aspirations of legalized sports betting in the state. Virginia Democrat Senator Chap Peterson has said he wants to propose legislation similar to this one, but with a different tax revenue plan. He calls his plan the “Virginia Sports Gaming Tuition Reduction Act.” His proposal would provide aid to community colleges instead of the universities discussed in HB1683. He also wants sports betting to be available to brick-and-mortar locations rather than via just online platforms.
He explained this during a recent interview with the Virginia Mercury:
“I’m not interested in people sitting in their parents’ basement with their pyjamas on betting on a ‘Monday Night Football’ game, I want this to be part of a social entertainment package where people get out and spend money.”
Next Session for Virginia Legislature
The opening legislative session will take place on January 9, 2019; HB1683 will be sent to a committee for debate at that time. The legislature managed to pass a law and set regulations regarding another issue in 2018 in less than six months. We’ll see how fast lawmakers are willing to work in order to get sports betting legalized in Virginia.
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