Virginia Sports Betting Handle Hits $696.1M Record in October

October 2024 marked a notable achievement for Virginia’s sports betting industry as it set a new record for the state’s betting handle, reaching an impressive $696.1 million.

This figure represents a 21.8% increase compared to the $571.4 million wagered in the same month in 2023. Not only does this reflect the ongoing popularity of sports betting in the state, but it also underscores the continuing growth of Virginia’s regulated sports betting market. The record-breaking handle for October even sured September’s total of $622.1 million by 11.9%, further showcasing the robust momentum of the market heading into the final quarter of the year.

The previously held record for the highest monthly handle in Virginia was set earlier in 2024, at $652.9 million in January. October’s performance exceeded this by 6.6%, indicating the potential for further growth as the state’s sports betting sector matures. Much of this increase can be attributed to the sustained interest in online betting, which continues to dominate the sports betting landscape. Online platforms ed for the vast majority of the wagers placed, contributing $692.2 million to the overall total. By contrast, retail betting, which remains a smaller segment of the market, brought in just $3.9 million for the month.

A Decline in Adjusted Gross Revenue

While the total handle in Virginia showed impressive growth, the state’s adjusted gross revenue (AGR) revealed a significant dip. The AGR for October 2024 amounted to $49.0 million, which marks a decline of 13.1% compared to October 2023, when operators earned $56.4 million.

Moreover, the total revenue for October 2024 is down 25.6% from September 2024, which recorded a much higher AGR of $65.9 million. The decrease in AGR suggests that while more money was wagered, operators retained a smaller share of those wagers compared to earlier months, a trend that could point to less favorable outcomes for sportsbooks.

A large portion of the AGR came from online betting, which generated $48.8 million in revenue. In comparison, retail betting contributed just $232,925 to the total. While the Virginia Lottery does not release specific figures for individual operator performance, it confirmed that 11 of the 13 licensed mobile operators and three casinos reported positive AGR for the month. This indicates that despite the overall revenue drop, the state’s licensed operators are still performing well, albeit less profitably than in previous months.

The Impact of NFL Results on Betting Performance

The decline in AGR can be attributed, in part, to player-friendly outcomes in NFL games during the early part of the fourth quarter. Operators, including prominent sportsbook DraftKings, had warned that the results of NFL games, which favored bettors more than expected, could negatively impact their earnings.

The high level of success for players during NFL matches appears to have influenced the operators’ performance, contributing to the lower hold percentage seen in October.

The hold, or the percentage of wagers that sportsbooks retain after paying out player winnings, was reported at 7.04% for October. This is a notable drop from September’s hold of 11.5% and also represents a significant decrease compared to the 11.2% hold recorded in October 2023. Breaking it down further, the online betting hold stood at 7.05%, while retail betting had a hold of 5.93%. These figures highlight a shift in betting results, which had a direct impact on the sportsbooks’ profitability.

Virginia’s sports betting tax revenue also reflected the growth in wagering, although the decline in AGR slightly tempered the expected increase in tax contributions. The 15% AGR tax rate generated $7.3 million in state taxes for the month of November. The bulk of this amount, 97.5%, was directed to Virginia’s General Fund, which s various state programs and services. The remaining 2.5% was allocated to the Problem Gambling Treatment and Fund, a crucial resource aimed at helping individuals affected by gambling addiction.

As Virginia’s sports betting market continues to break records, the fluctuation in adjusted gross revenue highlights the unpredictable nature of sports betting, particularly when outcomes in major leagues like the NFL shift in favor of bettors. While the state’s total handle reflects strong market demand, the challenge for operators will be navigating these variable results to maintain profitability.

Virginia’s sports betting landscape will likely continue to evolve as new trends and factors influence the market. Whether the AGR returns to previous highs or continues to face downward pressure from player-friendly outcomes remains to be seen. Operators, however, will likely adapt by adjusting their strategies to for these fluctuations, ensuring the long-term sustainability of the industry in the state.

Source:

”Virginia sports betting handle hits new record in October, weak hold hits revenue”, igamingbusiness.com, November 28, 2024.