A pair of sports betting operators were tabled in the House Appropriations Committee this month. SB 1142, which was tabled Monday, would allow sportsbook operators that have operated in the state for more than 12 months to exclude promotions from taxable revenue, up to 1.75% of their monthly handle.
A bonuses or promotions from adjusted gross revenue 12 months after they begin sports betting activity in the commonwealth.
The FanDuel, have lobbied for promotional tax deductions to be reinstated in some capacity. All of those operators but Fanatics are operational in Virginia. Their argument for a legislative change is that promotions and bonuses help operators transition bettors from the illegal market onto regulated, legal betting platforms.
Bills not dead 501k5s
Since the bills were tabled in committee, they aren’t technically dead for the 2023 legislative session, which ends on Feb. 25. It’s not exactly a great sign for the bills, however, and brief discussion surrounding SB 1142 on Monday wasn’t positive.
“We gave the industry a 15 percent tax rate, pretty low tax rate,” Del. Mark Sickles said Monday. “These three companies that have 63 percent of the market really don’t want to pay their 15 percent.”
Sickles seemed hesitant to go back on the state budget amendment that eliminated promotional tax deductions after an operator’s first year of business in Virginia. Monday’s vote to lay SB 1142 on the table was 21-0 in favor of the motion. A Feb. 3 motion to lay HB 2202 on the table also resulted in a 21-0 vote.
The reduction of promotional tax breaks led to increased tax revenue for Virginia from sports betting activity, which is viewed as a major positive by some legislators.
State Sen. Jeremy Mike, who presented the bill to the House Appropriations Committee, ended his comments with a tongue-in-cheek comment about another possible change that would attract bettors to legal platforms. Mike suggested that the legislature could allow for wagering on in-state college teams, like the University of Virginia and Virginia Tech. Betting on those programs is currently banned.
“To capture that illicit market activity, we can certainly include Virginia sports in the future,” Mike said with a grin.
