Virginia lawmakers close sports gambling loophole that was limiting tax revenue – GoDanRiver.com

The new Virginia state budget, which will go into effect on July 1, closes a loophole that allowed sports betting operators to avoid paying millions of dollars in taxes over the first year and a half of legal wagering in the state.

The issue was raised in a front-page story in The Times-Dispatch on May 2, which showed that sports betting companies were allowed to deduct certain promotional expenses from their pre-tax revenues. Among those expenses are "free bets" offered to players to entice them to sign up or continue gambling.

Those freebies ultimately negated as much as 43.7% of the revenue Virginias government could tax, or a potential $26.7 million in collected tax revenue.

As a result, of the 12 companies currently taking sports bets in the state, only five have paid any taxes since launching.

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Del. Mark Sickles, D-Fairfax, was an early champion of eliminating the tax break, and was ultimately able to get it written into the new state budget.

The revised legislation allows companies to deduce promotional incentives for the first 12 months in the market, but after that requires all such revenues to be reported and taxed.

The four largest betting companies in Virginia FanDuel, DraftKings, BetMGM and Caesars have all been live for more than a year.

Meanwhile, Virginia's sports betting market continues to be robust. The Virginia Lottery, which regulates companies offering legal betting, is expected to report next week that the state has now taken $5 billion in sports wagers.

The most recently available data showed just how much of an impact closing the loophole will have.

Virginia has taken $4.98 billion in sports bets, with the operators "holding," or winning, 8.5% of that money.

That has led to the state collecting $29.8 million in tax revenue over that time.

Tennessee has taken $4.405 billion in sports bets, with the operators holding 8.6% of that money.

That has led to the state collecting $62.8 million in tax revenue over that time.

The original logic was that allowing promotional expenses to be written off would help build up the betting market faster. However, other states, including New York, have launched to eye-popping numbers without allowing the write-off.

According to a February study by the Tax Foundation, of the 30 states with legalized sports betting, eight currently offer companies the ability to write off promotional expenses a number that is about to decrease by one.

In a less-consequential sports betting decision during this year's General Assembly, providers are no longer allowed to use the term "Virginia is for Bettors" in their marketing materials.

The phrase plays off of the "Virginia is for Lovers" marketing slogan. The bill was passed by the General Assembly and signed by Gov. Glenn Youngkin.

Another bill proposed legalizing wagers on state college sports teams, but that was defeated in the General Assembly, meaning wagering on VCU basketball or Virginia Tech football remains illegal in the state for at least another year.

The cost to attend an NFL game is the most expensive among the major four sports leagues with an average cost of $157.07. The cheapest NFL team to watch live is the Cincinnati Bengals with an average cost of $105.69. Here are the five most expensive.

The Las Vegas Raiders moved into Allegiant Stadium prior to the 2020-21 season. Among NFL teams, the Raiders have the most expensive general admission ticket ($153.47), most expensive beer ($13) and most expensive hot dogs ($7.50).

Levi's Stadium opened in 2014. To attend a San Francisco 49ers game is the second-most expensive among NFL teams and third-most expensive among all four major sports leagues.

The parking at AT&T Stadium is the most expensive of all the four major sports leagues. It costs more for parking at a Dallas Cowboys game ($75) than attending a Los Angeles Dodgers game ($70.66).

The Los Angeles Rams moved into SoFi Stadium prior to the 2020-21 season. The Rams sell the most expensive hot dogs among NFL teams with an average price of $7.50.

The Green Bay Packers are the only franchise owned by stockholders. The average price for a Green Bay Packers fan to attend a game at Lambeau Field with two beers, a hot dog and parking is $192.93.

The average cost to attend an MLB game with two beers, a hot dog and parking is $67.39, which is the cheapest of the major four sports leagues.

Watching the Chicago Cubs comes at a hefty price. Wrigley Field is the most expensive MLB game for fans to attend with an average price of $109.78.

Among all the MLB teams, the Boston Red Sox have the priciest general admission ticket. The average ticket price at Fenway Park is $60.09.

At $29, the parking at Yankees Stadium is the most expensive of all MLB stadiums.

The most expensive hot dog of all MLB stadiums can be found at a Washington Nationals home game. Hot dogs cost fans $7.25 at Nationals games.

The average price for Houston Astros fans to attend a game at Minute Maid Park with two beers, a hot dog and parking is $89.83.

The NBA is the second-most expensive league in terms of attending a game with an average cost of $120.13.

An average New York Knicks game at Madison Square Garden will cost fans $260.38, the most expensive of all of the four major sports leagues. Among NBA teams, the Knicks have the most expensive general admission tickets ($180.78), most expensive parking ($45) and most expensive hot dog ($8.50).

The Golden State Warriors moved into Chase Center before the 2019-20 season and became the second-most expensive NBA game to attend with an average cost of $230.30. The Warriors sell the most expensive hot dogs in the NBA with an average cost of $8.50.

It's no surprise that attending a Los Angeles Lakers game is expensive. The average cost for Lakers fans to attend a game at Staple Center with two beers, a hot dog and parking is $190.76.

The TD Garden has been the home of the Boston Celtics since 1995. The average price for a Boston Celtics fan to attend a game at TD Garden with two beers, a hot dog and parking is $167.16.

Even though the Chicago Bulls missed the playoffs with a 22-43 record during the 2019-20 season, the United Center was still the fifth-most expensive NBA stadium to attend a game with an average cost of $154.01.

While it's not as cheap as the average price to attend an MLB game, an NHL game is still reasonable compared to an NFL or NBA game. The average cost for a NHL game with two beers, a hot dog and parking is $114.47.

Even though an average New York Rangers game at Madison Square Garden isn't as expensive as a New York Knicks game, it's still the most expensive game to attend in the NHL with an average cost of $182.43. The Rangers also sell the most expensive beer in the league, which will set a fan back $15.

The parking at TD Garden for a Boston Bruins game will cost an average of $29, the most expensive among NHL teams.Including a ticket, two beers, a hot dog and the parking, a Bruins game will cost an average of $162.36.

The Toronto Maple Leafs are the most popular hockey team in Canada, and the ticket prices prove it. Scotiabank Arena offers the most expensive general admissions ticket in the NHL with an average ticket costing $128.69.

Even though the Chicago Blackhawks finished last in the Central Division during the 2019-20 season, the United Center still sets a fan back $153.63 to attend an NHL game.

The newest addition to the NHL is the Las Vegas Golden Knights and T-Mobile Arena where the average price to attend a game is $153.36. The Golden Knights are home to the most expensive hot dog in the NHL, which will cost a fan $7.

mphillips@timesdispatch.com

(804) 649-6546

Twitter: @michaelpRTD

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Virginia lawmakers close sports gambling loophole that was limiting tax revenue - GoDanRiver.com