It seems like the last debate if all VA sports betting operators can deduct some promotional costs will occur in a budget conference committee.
SB 1142 quickly passed the Senate but, in Mondaymet the same fate as the fellow bill HB 2202: a 21-0 vote to pass the law on House Appropriations Committee.
The conversation about allowing adult sportsbooks in Virginia to draw down to 1.75% in their monthly management from taxable income. However, the Senate has a different plan.
The VA sports betting deductions in the budget amendments
The Senate passed an amendment on the floor to include the 1.75% reduction for sportsbooks that have been on the market for more than one year in the Virginia budget.
That’s how the promotion reduction rules changed in the first place. The biennial budget limits the promotional deductions of sportsbooks in their first year of operation. Del. Mark Sickles brought the promotion reduction changes as a bill in 2022, and although it did not pass the legislature, it entered the two-year budget.
While budgets are passed in even years, there is an opportunity to change the budget in odd years. The 1.75% change was not reflected in the House amendments for the budget. That means it’s one of the topics for a budget conference committee to deal with.
Sickles spoke his mind on the proposal
Sickles is also a member of the Appropriations Committee and spoke alone Monday about SB 1142 before the unanimous vote:
There are 16 sports betting licensees. Three of them are in front of us asking for help to help support their free money, free bets that they’re giving away. We give industry a 15% tax, a relatively low tax, and these three companies with 63% of the market don’t really want to pay their 15%.
I just pointed out that New York has a 51% tax rate and zero deductibility for these free bets. Zero deductibility, 51% tax rate. We have a 15% tax rate and people want us to continue to do that even though we’ve done it well in the last six months since we changed the policy here in committee and raised that much, which was in our budget, for the last six months. we did for the first 18 months.
Sickles is believed to be referring to the latest data available from Virginia Lotteryhe even sold the market share relatively short. FanDuel (41.08%), DraftKings (23.06%) and BetMGM (18.30%) holds the top three spots for market share by handle for January 2022 to November 2022 for a joint 82.44% in the market.
Sickles is the target about the new tax revenue since the transition. from July 2022 to December 2022the state of Virginia received $36.6 million to pay taxes compared to $35.5 million more the former 18 months.
