As Thursday, January 21, approaches, it brings with it the commemoration of Virginia’s first year of legalized sports betting, providing us with a wealth of knowledge and insights gained from the past 12 months.
In 2021, FanDuel was the pioneer in the market, but since then, 10 additional sportsbooks have entered the scene. Furthermore, Virginia is actively developing one of the most thriving sports-betting markets in the nation, with more sportsbooks on the horizon.
Virginia has experienced considerable success, with a duration of 12 months and an estimated $3 billion in wagers. However, it’s important to acknowledge that the market is not flawless, as evident from the highs and lows encountered over the previous year.
As Virginia sportsbook operators reach their one-year milestone this week, it presents an ideal opportunity to delve into the successes and challenges experienced in the Old Dominion state.
1. A first anniversary truth: As FanDuel learned, it’s good to be the first sportsbook.
FanDuel’s collaboration with the Washington Football Team enabled them to become the inaugural sportsbook to accept lawful bets in Virginia. Their widely promoted advantage lasted a mere two days before DraftKings and BetMGM also entered the market on January 24th. Nevertheless, FanDuel’s early lead turned out to be crucial.
Despite the presence of six active sportsbooks, FanDuel managed to process an impressive 53% of all wagers by March 2021. However, by November, its market share had slightly declined to 42.7%. Nevertheless, FanDuel remains determined to maintain its position as the top contender and shows no intention of relinquishing its number one status.
2. Virginia has one of the largest US sports betting markets.
By the coming weeks, the official figures for sports betting in Virginia for 2021 will be available. Unless there is a significant disappointment in December, it is highly likely that Virginia will surpass $3 billion in total sports bets for the entire year.
Virginia consistently places in the top 5 to top 10 states in terms of monthly sports betting handle in the US. This achievement was made possible by three consecutive months, from August to October, where Virginia recorded record-breaking betting activity. In addition, Virginia became the fastest state to reach a total of $2 billion in wagers. Although there was a slight decrease in betting volume for VA sportsbooks in November, operators still managed to achieve a remarkable revenue of $48.3 million, setting a new record.
3. Virginia lawmakers were wise to create a competitive sports-betting market.
Virginia lawmakers initially did a commendable job in crafting the sports betting legislation, and now, as we celebrate its first anniversary, we witness a flourishing market brimming with numerous operators and an abundance of options for customers.
There is a wide range of sportsbooks available to cater to every type of bettor. Furthermore, due to intense competition, bettors in Virginia are privileged to enjoy numerous sign-up offers and ongoing promotions.
VA lawmakers have made sports betting convenient and accessible. Unlike in-person outlets, such as casinos, wagering is not restricted to physical locations. There is no need for in-person registration at brick-and-mortar establishments to play online. Moreover, betting is not limited to specific geofenced areas, as seen in Washington, DC, but is accessible statewide in Virginia. If you are of legal age and want to place a wager, you can do so without leaving the comfort of your own couch or using your phone.
4. As with promo spend and carryover, VA lawmakers weren’t perfect.
While Virginia lawmakers achieved remarkable success in certain aspects of the sports-betting legislation, they did not attain perfection.
PlayVirginia wrote about the ban on betting on in-state colleges and universities before Virginians even placed their first legal sports bets in 2021. Additionally, we highlighted Virginia’s decision to tax adjusted gross revenue (AGR) instead of gross gaming revenue (GGR), resulting in a significant decrease in potential state revenue.
Nevertheless, in 2022, VA lawmakers have the opportunity to rectify both of these issues, despite the aforementioned missteps.
5. Speaking of competition, Caesars and BetMGM get points for creativity.
As the first VA sportsbooks to start accepting bets, it comes as no surprise that FanDuel and DraftKings, the most well-known brands in the industry, have gained a significant foothold in the market. With a combined market share of 69.5%, FanDuel (42.7%) and DraftKings (26.8%) dominate the VA sportsbook market as we approach its first anniversary.
Virginia’s dominant player has compelled other players to think outside the box, ultimately benefiting customers. For instance, BetMGM (17.8%) and Caesars (8.4%) are the only other sportsbooks in VA with a market share exceeding 2%. In an effort to compete and gain traction, these secondary books have introduced incredibly enticing promotions for players throughout the past year.
An exemplary illustration is Caesars, who took the lead in offering the top promotional deal of the year. With a mere $100 in total bets, patrons could acquire $150 worth of credit towards an original NFL jersey. Presently, the sportsbook is extending the same opportunity for NBA jerseys.
Additionally, the daily “Super Boosts” offered by Caesars are among the most favorable bargains available in Virginia.
6. Virginia’s biggest online sportsbooks spend big on promotions.
Virginia boasts a thriving market with numerous operators, offering a wide range of options. In principle, almost twelve sportsbooks currently have the chance to establish their dominance.
However, in actuality, the dominant operators spare no expense in order to retain their position at the top. Between January 21 and November 30, VA sportsbooks have allocated a significant $105.1 million towards promotional activities such as sign-up bonuses, free bets, and other exclusive offers. Out of this total expenditure, the four largest operators in Virginia accounted for an impressive $97.8 million, which is equivalent to 93%.
- FanDuel: $23.5 million
- BetMGM: $24.4 million
- DraftKings: $23 million
- Caesars: $14.9 million
Only Barstool Sportsbook, BetRivers, and WynnBet invested over $1 million in promotional spending, with Barstool Sportsbook leading the pack at $2.2 million (2% market share), followed by BetRivers at $2.2 million (1.1% market share), and WynnBet at $1.9 million (0.7% market share).
7. Virginians prefer NBA and college basketball betting.
Football is the most favored sport among sports bettors across the country, and it holds significant popularity among Virginia bettors as well. However, the region has also emerged as a hub for basketball betting within the first year of legal wagering.
During a recent meeting of the Virginia Lottery Board, we were provided with a detailed analysis of the various types of sports wagers made in 2021. While the numbers for December, which are expected to include a significant surge in bets on college bowl games and the conclusion of the NFL regular season, have yet to be revealed, it is evident that basketball is leaving a notable impact. Wagers placed on the NBA represent approximately 21.5% of all bets, while NCAA basketball accounts for 6.3%, collectively making up over a quarter of the total wagers. Additionally, if we factor in parlays that involve at least one basketball component, it is highly likely that the overall percentage is even higher.
The presence of the Washington Wizards in the vicinity is likely to enhance the NBA betting enthusiasm. Furthermore, if Virginia ever decides to remove its prohibition on betting for in-state schools like the University of Virginia and Virginia Tech, the college basketball betting activity will undoubtedly witness a significant surge.
8. One out of 10 sports bets in Virginia is on tennis.
Every US state with legalized sports betting appears to have cultivated a unique and popular niche. A prime illustration of this can be seen in Colorado, where there is a notable fascination with betting on table tennis.
In Virginia, the enthusiasm for second-tier sports and sports organizations is quite low when it comes to betting. For instance, golf, boxing, and MMA have only managed to attract 1.6%, 0.6%, and 0.6% of all bets, respectively. Even soccer and hockey, which one might expect to have more interest, have only received lukewarm wagering enthusiasm with percentages of 5.7% and a surprisingly low 2.3% in VA.
Surprisingly, tennis has become a hit in Old Dominion. As we near the one-year mark of sports betting, Virginia has witnessed tennis making up 9.9% of all wagers.
The ATP and WTA provide a consistent schedule of events and various opportunities for tennis betting. Moreover, since tennis matches often occur during non-peak hours in Virginia, bettors have the chance to place wagers when popular sports are not in action.
9. The ban on in-state collegiate betting remains shortsighted.
Although the first year of Virginia sports betting has been commendable, there is potential for it to have been significantly greater.
The inability of Virginians to place bets on their local college teams has undoubtedly impacted the handle for college football and basketball. Virginia, known for its college sports culture, boasts teams like the Richmond Spiders, VCU Rams, and Liberty Flames. Unlike having professional teams to support, college sports serve as a major sports attraction in the state.
At first glance, the ban appears to provide protection for college athletes. Additionally, it likely aided sports betting advocates in convincing those who were undecided about legalizing gambling. However, based on numerous examples from other states, college betting does not lead to corruption or scandals. Moreover, student-athletes are not exposed to excessive risks. This is evident from the recent agreement between the University of Maryland and a legitimate sportsbook, PointsBet.
In Virginia’s second year of sports betting, lawmakers must address the issue at hand. Instead of safeguarding the integrity of college sports, they are merely inconveniencing the bettors who will inevitably place their wagers on these games.
10. Retail sports betting could be a mere novelty in Virginia.
Despite efforts made by certain states, it is evident that sports bettors have a strong inclination towards the convenience offered by online platforms. In the past, individuals interested in sports betting had no choice but to make the arduous journey to Las Vegas, locate a casino, find the sportsbook, and finally exchange physical currency to place their bets.
Presently, in states such as Virginia, individuals wishing to place bets can easily download an application on their phones and conveniently deposit funds into their accounts. Additionally, with the increasing popularity of live in-game betting, online sportsbooks provide unique options that traditional physical books cannot offer.
Starting this year, Virginia sports bettors will finally have the opportunity to engage in in-person betting at the newly established casinos in Bristol, Danville, Norfolk, and Portsmouth. These resorts guarantee an experience akin to sports betting in Las Vegas. Nevertheless, it is important to note that these physical sportsbooks will most likely serve as nothing more than a novelty or an added bonus for patrons of these casinos.
Once individuals become accustomed to the convenience and swiftness of online betting, they tend to seldom engage in in-person wagering, as observed in other states.
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