Virginia Introduces Online Lottery & Sports Betting Bill

On Tues., Nov. 20, two Virginia legislators announced separate plans to legalize sports betting within the state. They are Delegate Mark Sickles and State Senator John Chapman “Chap” Petersen, both Democrats.

Sickles’ Bill

Mark Sickles actually took the proactive step of pre-filing his proposed sports betting legislation. Its text is already available to read online, and it will be officially introduced on Jan. 9, 2019, when the next legislative session begins. This bill is designated by the number HB 1638.

The piece of legislation calls for the Virginia Lottery to exercise oversight over a sports betting industry, and permit up to five license-holders to accept bets on sports over the internet within state borders. At the same time, the Lottery will be allowed to expand its own online sales activities too. Commenting on his proposal, Sickles said that it would:

“Provide the assurance of a trusted brand while allowing the private sector to flourish. This legislation provides a framework for an open, transparent and responsible market for legal sports betting.”

Money Matters

The system envisioned by Sickles would see up to five sportsbook operators licensed for three years at a time at a cost of $250,000 per license fee. At the end of the three-year period, they would be able to renew their license for $200,000.

Furthermore, they will be required to turn over 15% of their gross gaming revenue to the state. This tax money would be split up as follows:

– 95%: Major research projects fund
– 2.5%: Gambling addiction treatment programs
– 2.5%: Retained by the Virginia Lottery to cover its expenses

Delegate Sickles believes that up to $41 million per year could be generated for the state by adopting his sports betting plan.

Other Rules

Only people aged 21 and older who are physically located within the borders of the Commonwealth of Virginia will be allowed to place bets. Prohibited from placing bets on sporting events, however, will be any “competitor, coach, trainer, employee, or owner of a team in a professional sports event, or any referee for a professional sports event.” Furthermore, operators will not be allowed to accept action on the results of Virginia collegiate athletic matches or youth sports.

Online Only?

Although HB 1638 doesn’t say so explicitly, it appears that it would create an internet-only environment for sportsbooks. It defines “sports betting platform” thus:

“A website, app, or other platform accessible via the Internet or mobile, wireless, or similar communications technology that sports bettors use to place sports bets.”

This clearly indicates that only online sports betting sites are foreseen as existing in the state. Assuming this is a correct interpretation of this definition, Virginia would become the only state in the country to have online sportsbooks while having no brick-and-mortar ones.

Expanded Role for Lottery

Sickles’ bill would enable the Virginia Lottery to add to its current roster of online products. At present, it only offers an online subscription service to account holders that lets them participate in three lottery games. The part of the legislation dealing with this aspect of the Lottery’s operations is very vague, so presumably, the details of any possible expansion will be left to the discretion of the Lottery and its director.

Curiously, HB 1638 states that the Virginia Lottery Board “may establish a program, to be directed by the Director, under which the Department operates a sports betting platform.” It could be that the Virginia Lottery will become an active participant in the sports betting market rather than just an overseer and regulator.

Petersen’s Competing Plan

State Senator Chap Petersen hasn’t yet released his full bill to the public, but we do know its title: “Virginia Sports Gaming Tuition Reduction Act.” As its name implies, it would use the cash generated by sports betting to fund tuition grants for local community colleges rather than the research projects sponsored by Sickles’ proposal.

The other major difference is that rather than putting all sportsbooks under the watchful eye of the Lottery, Petersen thinks it best that cities and counties be able to issue their own licenses. The voters in these localities would first have to pass a referendum permitting sports betting within their jurisdictions, though. In addition, Petersen sees a definite role for terrestrial betting as opposed to online wagering, and as he explained:

“I’m not interested in people sitting in their parents’ basement with their pajamas on betting on a ‘Monday Night Football’ game. I want this to be part of a social entertainment package where people get out and spend money.”

Background Info

This entire debate was sparked by the May 2018 Supreme Court decision in Murphy v. NCAA, which ended the decades-long ban on most sports betting at the federal level. Several states have opted to institute legalized sports betting in the wake of this ruling.

Particularly relevant to Virginia is the fact that sportsbooks have already been permitted to open in neighboring West Virginia while the District of Columbia and Kentucky appear to be willing to legalize them in the near future. Rather than seeing Virginians head across the border to bet in these areas, state leaders in Richmond probably prefer that they keep their money at home in the Old Dominion.