Virginia lawmakers concurred Wednesday with Gov. Ralph Northam’s tweaks to a pair of sweeping gaming bills. Sports betting will be legal in the commonwealth and, assuming further approval by local officials, Virginia will approve legal casino gaming for the first time since its founding as a colony more than 400 years ago.
The General Assembly agreed with minor adjustments to HB4, which will allow five jurisdictions to hold local voter referendums this fall to approve brick-and-mortar casinos, and SB384, which allows mobile sports betting. The final bills will agree to Northam’s recommendations to permit the state’s two NASCAR tracks to open digital sportsbooks and reallocate gaming tax revenues toward school construction projects.
Northam still needs to sign the final version of the two bills before they pass into law, but this is effectively a formality after the General Assembly overwhelmingly agreed to his recommendations. Lawmakers Wednesday were also set to support a more narrow bill that legalizes and taxes previously unregulated slot machines.
Wednesday’s votes were part of a regularly scheduled extra session to consider the governor’s vetoes and recommendations. Lawmakers met outside the capital building in response to the coronavirus outbreak.
Gaming backers in the Democrat-controlled General Assembly were confident they would approve changes to the gaming bills from Northam, also a Democrat. With the final approval by lawmakers, Virginia can now begin work on its first-ever casinos and sportsbooks.
Sports Betting Details
Virginia regulators will still need to approve rules for sports betting operators – and the vast majority of global sports league will need to resume their seasons in wake of the coronavirus outbreak – before wagering can begin in earnest. But wagering on sporting events is now legal in Virginia.
The bill allows up to 12 digital sportsbooks, not counting licenses given to the two tracks as well as professional sports teams that are headquartered or playing home games in the state. Those sports organizations will be given first priority for licenses. The five casinos, all of which would likely open sportsbooks if approved, will also be given priority.
For bettors this means top sports betting brands such as DraftKings, FanDuel, William Hill, PointsBet, BetMGM and other digital leaders in other states will likely apply to operate in the state. A 15% tax rate on gross gaming revenues is higher than the median average of around 10%, but industry officials believe it will still be competitive enough to attract a diverse group of applicants.
Bettors will be able to wager on a wide range of foreign and domestic professional sports leagues, but it contains some of the strictest limitations of any U.S. sports betting bill on college events. Wagers on in-state college teams, including popular programs such as Virginia Tech and the University of Virginia, are prohibited. So are proposition bets on any college team.
The Virginia cities of Danville, Bristol, Richmond, Portsmouth and Norfolk will now be able to hold voter referendums on the November 2020 ballot to permit the construction of brick-and-mortar casinos. The referendum caps decades of work for casino backers for these respective jurisdictions, which touted casinos as a way to create jobs and spark economic revival. Backers are bullish a majority of voters will support the casinos, and several municipalities have already struck deals with casino companies to operate these facilities.
All five present enticing opportunities for casinos. Portsmouth and Norfolk are in the densely populated Hampton Roads area of Virginia. Richmond is one of the commonwealth’s largest cities. Danville and Bristol are along Virginia’s borders with North Carolina and Tennessee, respectively, neither of which have commercial casinos.
But the opportunity to run the commonwealth’s first casinos will require a high cost. Each operator will have to invest a minimum of $300 million in the casino and pay an initial licensing fee of $15 million.
Taxes will also be steep. The law taxes the first $200 million in annual gaming revenue at 18%. Revenues between $200 million and $400 million will be taxed at 23%, and anything above $400 million will be at 30%.
Groundbreaking could begin soon after Election Day, and casinos could open their doors as early as 2021. Once operational, the casinos will be offered a full array of “Las Vegas” style games, including slot machines, table games and poker.
Both sports betting and casino gaming are likely months, or years, from fruition, and that’s not considering the impacts of COVID-19. But Wednesday’s approval is the final legislative step for the largest legal gaming expansion in several centuries of Virginia history.