Virginia is on the verge of launching its online sports betting market in a matter of weeks. PlayVirginia recently interviewed writers in our network who specialize in covering sports betting in various states. Our aim was to gain insights on the effective strategies implemented by these states, their shortcomings, and the valuable lessons Virginia’s regulators and initial sportsbook operators can learn from their experiences.
Welcome to the inaugural edition of our three-part series, “States of Sports Betting.” In this series, we delve into the successful endeavors of Pennsylvania, New Jersey, Colorado, Indiana, and other states in cultivating prosperous sports betting markets and satisfying their customers.
Is it possible for Virginia to achieve the same level of success? Have Virginia lawmakers and regulators established a system that promotes a competitive and prosperous marketplace? Let’s examine the experiences of other states to find out.
In 2018, the Professional and Amateur Sports Protection Act (PASPA) was invalidated by the US Supreme Court, paving the way for a fresh era of legalized sports betting in the country. Notably, the states that embraced this new legal market from the outset have frequently enjoyed significant success.
As more states enter the market, the legal sports betting industry has witnessed an impressive $33 billion in wagers since the significant SCOTUS ruling.
Although Nevada once held a legal sports betting monopoly until PASPA was repealed, it has still managed to maintain its leadership position, with a staggering $11.5 billion in wagers since 2018. Nevertheless, other states like New Jersey ($10.9 billion), Pennsylvania ($4 billion), and Indiana ($1.9 billion) have been steadily narrowing the gap.
What factors have contributed to the emergence of those specific states as the frontrunners in the early stages? It is not attributed to a single factor, but rather the opposite.
According to Jake Garza of PlayIndiana, Indiana sports betting excels in every aspect. He believes that if one were to create an ideal sports betting market from the ground up, modeling it after the Hoosier State would be a fantastic choice.
According to PlayNJ’s Bill Gelman, New Jersey is not an exception. This is why numerous places are closely monitoring the Garden State’s progress as they make preparations for their own launch.
According to Gelman, New Jersey appears to have established a system and regulations that other jurisdictions aspire to emulate or at least consult with NJ about.
Can Virginia sports betting draw customers?
In order for Virginia sports betting to flourish, it requires a solid customer base. To attract these bettors, it must present itself as a more appealing option compared to other alternatives, whether they are legal or not.
Virginia is situated amidst states that have paved the way for sports betting. West Virginia and Pennsylvania have established and successful markets, while Tennessee is also live and gradually establishing itself. However, Washington, DC, has launched its sports betting market with noticeable restrictions. Furthermore, neighboring states like North Carolina and Maryland have also legalized sports betting and are preparing for future market launches.
In order to prevent Virginia sports bettors from going to other states or resorting to illegal and unregulated offshore sportsbooks, the market must cater to their desires. And based on our observations in other states, it is evident that most of the things that sports bettors want are universally desired.
Online sign-ups
Do you want bettors to utilize your online sportsbooks? Avoid the unnecessary hassle of making them go anywhere, especially during these challenging times of a pandemic. Remember, sportsbooks possess the necessary tools to verify players’ identities without requiring them to leave the comfort of their homes.
Colorado ranked sixth in the US with a $210.7 million sports betting handle in October, largely attributed to the ease of the sign-up process.
Ian St. Clair of PlayColorado praised the brilliant decision to enable mobile sign-ups from a user standpoint. While it was impossible to anticipate the arrival of a worldwide pandemic at the time of its approval in Colorado, the convenience and accessibility of being able to register for apps from the comfort of one’s couch is truly commendable. Simplifying processes for users ultimately enhances their experience.
This is great news for Virginia as the market will initially be exclusively available online.
Easy online betting
After verifying players, ensure that the process of placing a wager is straightforward. This is another valuable lesson we have discovered.
The current market leaders in New Jersey’s sportsbook industry are FanDuel Sportsbook and DraftKings Sportsbook, and it’s easy and instinctive to utilize their applications.
Gelman stated that although retail-based betting provides an additional attraction to casinos and racetracks, the true future of this industry lies in mobile sports betting. He further mentioned that approximately 90% of monthly wagers in New Jersey are placed through mobile apps, and it is highly probable that there will be more than 20 available options by early next year.
Wide variety of betting options
Sportsbooks can rely on NFL betting to either make or break their businesses. Additionally, the NBA, NHL, MLB, and major NCAA sports such as football and men’s basketball play a crucial role in determining their overall success. However, it’s important to note that bettors have diverse preferences, and therefore, both sportsbooks and regulators must be prepared to meet their demands.
Garza stated that the Indiana Gaming Commission has maintained a receptive attitude towards betting choices. He mentioned that there is a wide range of options available for betting, which is quite enjoyable. From popular sports like football and basketball to lesser-known activities such as professional bowling and candy-eating contests, one can place bets on almost anything.
Take a glance at the extensive range of approved betting options in New Jersey. The NJ Division of Gaming Enforcement permits betting on an array of sports, including sailing, volleyball, handball, and lawn bowling. Notably, it was also the pioneering state to legalize betting on Oscars winners. As the saying goes, variety adds zest to life. And for states to maintain vibrant sports betting markets, they must ensure the spice is always there.
Betting on in-state schools
When it comes to fulfilling players’ desires, one thing is clear: Allowing bettors to place bets on their beloved teams.
For instance, consider West Virginia. Despite having a population of 1.8 million, this state falls in the lower 25% among all US states in terms of population. Furthermore, it lacks any professional sports teams. Nevertheless, West Virginia boasts immensely popular college teams, particularly the West Virginia University Mountaineers and Marshall Thundering Herd.
Kimberly Yuhl of PlayWV stated that having a wide range of college betting options is advantageous, particularly when several states are contemplating bans on college betting. Highlighting West Virginia as a prominent college sports state, Yuhl acknowledged that although college football may not surpass NFL betting, it still contributes significantly to the overall betting numbers during the fall and spring seasons.
Regrettably, Virginia, lacking major professional sports teams, faced the ban on VA sportsbooks accepting bets on local colleges and universities. Although unfortunate, this condition was deemed necessary to legalize sports betting in the commonwealth.
Reasonable tax rate
States should prioritize creating business-friendly markets on the regulatory side. According to numerous writers from different states, one crucial aspect to achieve this is by implementing a reasonable tax rate. This is particularly important for sportsbooks as they face competition from offshore operators who are exempt from paying state taxes.
The majority of states fall within the range of 10-20% in terms of their rates. It is not surprising to note that the states with the lowest rates are witnessing operators invest a significant portion of their savings into extensive marketing and promotional campaigns.
“The 6.75% tax rate is the most favorable aspect of the Iowa market,” stated Derek Helling, a representative from PlayIA. “It is the lowest in the country, second only to Nevada. With a relatively small population and the absence of prominent sports teams in the state, it was crucial to establish a competitive market.”
In Colorado, operators were enthusiastic about entering the market, and this strategy proved successful.
St. Clair mentioned that the tax-friendliness of the state is a significant factor for operators. The 10% tax rate is a primary reason why numerous sportsbooks, including those based in California, are interested in relocating to Colorado.
The launch of its own market in Michigan is imminent. According to Matt Schoch from PlayMichigan, the favorable 8.4% tax rate has piqued the interest of almost every major operator in the state.
Virginia continues to be an appealing choice for operators, thanks to its relatively low 15% tax rate.
Virginia vs. offshore sportsbooks
Legalizing sports betting in the US not only generates more revenue for states, but it also shifts the industry away from illegal offshore books that cater to the US market.
Even in states where cannabis is legalized, certain individuals still prefer to choose international options. Despite the limited options available in case of conflicts or the potential bankruptcy of operators, these players are willing to take risks. What are some of the reasons behind their decision?
- Better lines and odds
- Deposit and reload bonuses
- Promotions, contests and giveaways
The mentioned features are not unique to offshore books. However, legal operators do not always have the motivation to provide them unless they face a competitive market. In Illinois, where there are numerous operators, players have been continuously presented with one promotion after another.
Joe Boozell of PlayIllinois stated that there was an abundance of free money being distributed by popular companies like DraftKings, FanDuel, PointsBet, and BetRivers, particularly in September. He also mentioned that these bookmakers continue to send appealing offers through email on a regular basis.
The presence of abundant competition in this market is advantageous for users, ultimately benefiting them. Additionally, I believe users value such offerings and are more likely to continue using legal books in the future rather than resorting to offshore alternatives.
Offers have been pouring in for Tennessee since it started its market last month.
Alec Cunningham of PlayTenn stated that the sportsbooks are striving to establish their presence in the market and enhance customer loyalty. As a result, bettors are enjoying the benefits.
In VA, the Virginia Lottery is set to grant between four to twelve sports betting licenses, which is promising news for the availability of sportsbook promotional deals.
Don’t forget the brick-and-mortar sportsbooks
Initially, all sportsbooks in Virginia will exclusively function online.
In 2022 and 2025, Virginia will witness the opening of its casinos, allowing them to operate brick-and-mortar sportsbooks. The same applies to NASCAR racetracks, as well as any professional sports teams that choose to relocate to Virginia, such as the Washington Football Team.
While online sports betting is expected to dominate wagering in Virginia, there is still value in embracing a traditional approach.
According to Katie Kohler from PlayPennsylvania, the majority of Pennsylvania’s casinos have significantly improved their brick-and-mortar sportsbook offerings. What initially began as a temporary setup has now transformed into state-of-the-art sportsbooks in many instances.
Las Vegas will likely continue to be regarded as the hub of sports betting by bettors. Despite not having the highest monthly handle, the association between Sin City and sports betting remains strong due to its vibrant atmosphere and offerings. The existence of physical sports betting establishments plays a significant role in this connection.
Marc Meltzer from PlayNevada expressed that the tradition and people associated with sports betting in Nevada are the greatest aspects. He believes that no other state can compare to the classic sportsbooks like Westgate, Mirage, and now Circa. Additionally, the staff at these sportsbooks are enthusiastic about discussing everything from odds and lines to the overall experience of visiting their establishments.
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