NFL Season Results May be Eating into Virginia Sports Betting Revenue

Virginia sports betting is officially busier than ever. But it is not as profitable as ever.

The Virginia State Lottery, which oversees sports betting in Virginia, recently released their revenue reports for October 2024. The results prove that sports betting interest in Old Dominion is at an all-time high. 

“Handle for October was 21.8 percent higher than the $571.4 million wagered in Victoria during the same month last year,” writes Robert Fletcher of iGaming Business. “It also surpasses September’s $622.1 million handle by 11.9 percent, the Virginia Lottery reports. The existing monthly record in Virginia was $652.9 million, which was set in January this year. October’s new record surpassed this by 6.6 percent.”

All-time handle records prompt people to assume similar directions for the state’s tax revenue. But this is not always the case. Sports betting handles are simply the total amount of money spent on wagers. Gross gaming revenues represent sportsbook profits after they pay out winning wagers. States then get a cut of that number depending on their sports betting tax rate.

In this case, Virginia sports bettors fared pretty well on their wagers. Sportsbooks in Virginia reported a $49 million combined gross gaming revenue for October. That amounts to just 7.5 percent of the total money accepted on wagers. This total falls 13.1 percent shy of October 2023 and 25.6 percent behind September’s $65.9 million, according to the Virginia Lottery.

While the root of this cause cannot (yet) be determined, the belief is that NFL online betting results played a huge role in the deflated gaming revenue.

Operators Say Virginia Sports Betting Results on NFL Wagers are ‘Going the Customers’ Way’

It turns out that betting on the NFL is proving to be a rosier experience for Virginia sportsbook customers. Heck, online sportsbooks in the United States such as DraftKings even issued a statement noting as much. As Fletcher writes;

“However, a year-on-year decline in adjusted gross revenue suggests evidence of player-friendly results in the NFL hitting operators’ performance is emerging. It comes in the wake of operators, most notably DraftKings, warning of NFL results going customers’ way in early quarter four. Total tax from the 15 percent adjusted gross revenue levy on sports betting was $7.3 million in November, with 97.5 percent of this going to the state’s General Fund. The remaining 2.5 percent is sent to the Problem Gambling Treatment and Support Fund.”

Frankly, this qualifies as a revelation. And that also means it may just be a market correction.

Back in September, many operators of online sports betting in the United States experienced record-setting revenue because upsets in the NFL were occurring at a torrid pace. Twenty-six favorites ended up losing outright for the month, the most in the opening month of a season since September 2002, according to ESPN.

Underdog victories tend to play out well for sportsbooks. Point spreads are a different storyline, but moneyline wagers often tend to gravitate towards the favorites. This is especially true when the favorites are given a touchdown-or-better edge.

To that end, it is interesting that bettors overall seem to be performing well overall. Perhaps DraftKings’ statement is reflective of action both in October and November. That may be enough to offset what was a tough September for customers.

Virginia’s Yearly Returns on Sports Betting are Still Trending Upward

Despite seeing monthly revenue recently fall, Virginia is on pace for year over year upticks in revenue overall. 

Following October 2024 reports, Virginia sports betting tax revenue sits at $66.2 million for the year to date. That amounts to around $6.6 million per month. If this average holds through November and December, the final tally for 2024 will reach $79.4 million. 

This would mark yet another significant increase compared to the previous 12 months. In 2023, Virginia sports betting tax revenue checked in around $58.4 million. All in all, this puts Old Dominion on course for a 36 percent year over year increase in total revenue. It would also mark a 62.7 percent increase over revenue from 2022. That was the first full year in which Virginia sports betting was live. 

File this one under a financial victory for the state. Growth is expected in the onset years following sports betting launches. But reaching nearly 63 percent in two years is a big deal.

Of course, Virginia sports betting could fall short of projections over the final two months of 2024. The DraftKings statement of NFL betting performance, specifically, could reference another downtick in November. 

Even if that is the case, Virginia will still be coming out ahead in the aggregate. Let’s assume they don’t make another dollar off sports betting this year. That definitely isn’t going to happen, but for argument’s sake, let’s say it does. Virginia sports betting revenue for 2024 already sits higher than it did for all of 2023. If it remains the same, the market will have still grown over 13 percent.

Is that as impressive as 36 percent in a single year? Not at all. But smaller growth is still growth. So while Virginia’s revenue stream may be slogging through a tough couple of months, this will not prevent the state from having an overall net positive year.

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