RICHMOND, Va. (AP) — Sportsbooks actually lost money in Virginia in their January debut taking wagers on athletic events thanks to the aggressive promotions offered to court customers. As a result, the state collected a paltry $40,000 in taxes.
The Virginia Lottery on Monday released revenue and tax figures for sports gambling from Jan. 23 — when the first provider, FanDuel, was approved for operation — to Jan. 31.
The lottery says $58.9 million was wagered, with $55.3 million in winnings. But an additional $6.3 million in bonuses and promotions was also paid out.
That, along with about $500,000 in other deductions, resulted in negative adjusted gross revenue of $3.2 million.
It is the adjusted gross revenue that the state taxes at a 15% rate.
Only one of the four operators who were active in January had a positive adjusted gross revenue. As a result, Virginia collected only $39,710 in tax revenue for the month.
Lottery officials say they expect the figures to improve significantly in upcoming months as more operators enter the market and the promotions for new customers fade away.
Sportsbooks are advertising heavily in the state and offering promotions that can be worth hundreds or even thousands of dollars to first-time customers.
A legislative study projected Virginia would net up to $55 million annually in tax revenues once the market is fully developed.