NASCAR tracks could get sportsbooks in Virginia.

  • Virginia Gov. Ralph Northam sent recent sports betting bills back to the state Legislature with proposed amendments that would increase licensing fees for sportsbooks.
  • The most impactful change would require a $50,000 background check fee for all “principals” of a sports betting operator—this could cost up to $1 million.
  • Northam also requested that provisions be added to issue a sports betting license to NASCAR tracks in the state.
  • Sports betting in Virginia, if done properly, should be worth upwards of $1.2 billion per year

RICHMOND, Va.Virginia Gov. Ralph Northam sent recently passed sports betting bills back to the Legislature last week with a set of proposed amendments. Northam’s proposed amendments could greatly increase licensing costs for Virginia sportsbooks.

The most contentious amendment would require a $50,000 background check fee for anyone defined as a “principal”, or someone who owns or controls, directly or indirectly, at least 5% of a company. This could theoretically apply to up to 20 people at a single company, for a maximum total of $1 million.

This background check fee would be added on to the existing $250,000 three-year licensing fees and triennial $200,000 renewal fees for companies.

Most operators likely would not pay the full $1 million, as most will not have a full complement of 20 principals. Northam’s amendments could be interpreted as heavily favoring consolidated ownership models.

While these proposed fees are obviously far from ideal for sportsbooks, they aren’t unprecedented. Illinois and Pennsylvania, for example, each charge several million dollars. Pennsylvania also taxes sports betting revenue at 36% on top of that, but Pennsylvania sportsbooks have still been highly profitable.

Outlook For Virginia Sports Betting Now

Sports betting in Virginia appeared to be on the horizon after the passage of HB 4, HB 896, and SB 384 back in March. Northam’s proposed amendments could potentially kill these bills, but the Virginia Legislature would likely be willing to reach a compromise.

Northam’s request that the Legislature add NASCAR to the list of sports franchises that would be eligible for a sports betting license suggests that this is not an attempt to block sports betting, but rather an effort to maximize the state benefit derived from it.

The NASCAR circuit currently includes two tracks in Virginia: Martinsville Speedway and Richmond Raceway. The two venues have a combined capacity of over 110,000.

The bills already passed by the Legislature include stipulations that would allow the state to issue a sportsbook license to an NFL franchise—seemingly a gesture to help lure the Washington Redskins to relocate to Virginia from Landover, Maryland.

The Virginia Legislature will reconvene next week to consider Gov. Northam’s proposed amendments. If all goes as planned and a revised bill passes, Virginia could issue up to 19 different sportsbook licenses by late 2020 or early 2021:

  • 12 online-only sportsbooks
  • 5 retail casino sportsbooks
  • 1-3 in-stadium sportsbooks for “major league” franchises

Sports Betting Projections In Virginia

Here is a look at Virginia’s annual sports betting revenue potential, using a Legal Sports Betting per capita projection model. Virginia’s population is 8,536,000.

  • Handle: $1.28 billion
  • Revenue: $89.0 million
  • Tax Collections (15%): $13.4 million

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