Sports betting launched in Virginia last month, but analysts project it will grow into one of the largest markets in the country.
According to PlayVirginia.com, over the next three years, bettors in the state will make $13 billion in sports wagers.
By the third year, analysts estimate Virginia will see more than $5 billion bet annually, $400m in annual operator revenue and $60m each year in state taxes.
Virginia launched as a solely online market, but regulators have allowed for the building of brick-and-mortar sportsbooks. Although online betting should account for close to 90% of all bets even when the market matures, Eric Ramsey, analyst for PlayVirginia.com, said retail sports betting will be a key differentiator between Virginia and neighboring Tennessee, which launched as the nation’s first online-only market.
“Virginia is well-positioned, not only because it is a relatively large market, but because it will likely capitalize on Washington DC, a legal market that has left some bettors frustrated,” Ramsey said in a statement.
In addition to DC, Ramsey said Virginia may also draw bettors from neighboring North Carolina and the Baltimore area, at least until Maryland launches sports betting.
“Having so many large markets so close by has been a boon for states such as New Jersey, the nation’s largest sports betting market, and Indiana,” Ramsey explained.
Dustin Gouker, another analyst at PlayVirginia.com, said Virginia’s tax structure should not impede the growth of the market. The state has a 15% tax rate on sports betting revenue, higher than New Jersey’s 13%, but lower than the 20% rate in Tennessee and well below Pennsylvania, which has the nation's highest tax rate at 36%.
“Virginia has undergone one of the greatest transformations in history by going from a state with few gambling options to a wide-open state that will allow for online betting and retail casinos,” Gouker said. “Virginia had the benefit of seeing what has worked in other states, which has resulted in a regulatory framework that should foster its long-term success.”
When online sportsbooks began taking bets in January, Virginia joined 19 other states and Washington DC, to launch some form of legal sports betting.