For Virginia casinos, the revenue report from February 2023 was a bit like getting an income tax refund or when your delivery order from your favorite restaurant arrives. You knew it was going to be good even before it happened.
In the first full month of operation for Rivers Casino Portsmouth, the state saw new records for gaming revenue and taxes. While that was expected to happen, it brings more clarity to what the casino industry in the state should be worth at maturity.
Virginia casinos clear $38 million in February
According to the Virginia Lottery, the state’s two brick-and-mortar casinos claimed more than $38.3 million in revenue in February. That bests January revenue by almost $14 million or about 41.6%. January’s $22.4 million had been the state record.
While the Hard Rock Bristol temporary facility ran for all 31 days of January, Rivers Portsmouth didn’t open to the public until Jan. 23. Thus, January’s activity only contained nine days of play in Portsmouth. Appropriately, Rivers’ revenue was almost three times as high in February.
- Hard Rock Bristol February 2023 revenue – $13.7 million
- Rivers Portsmouth February 2023 revenue – $24.6 million
On that amount, Virginia collected a single-month record of $6.9 million in casino taxes. These numbers could formulate a new normal for the state for the foreseeable future, too.
Future casino openings not imminent
Plans are underway for two more casinos in the state but openings are not around the corner in either Danville or Norfolk. The best-case scenario in both of those cities involves opening a temporary facility later this year according to the Virginian-Pilot.
The permanent facilities in both cases are targeting 2024 or even 2025 for their launches. The same goes for the permanent Hard Rock in Bristol. For those reasons, $30-$40 million in revenue and $6-$7 million in taxes might represent par for the course in the state for at least the next few months.
That doesn’t represent the whole of gambling taxes that the state collects, however. Online sportsbooks also pay a portion of their revenues. The formula for determining those payments could change soon.
Sports betting promo deductions up for debate
According to Graham Moomaw of the Virginia Mercury, the state’s preliminary budget for the upcoming fiscal year has a new addendum. The provision in the budget bill would restore some of the promotional tax credit for regulated sportsbooks in the state.
Under current law, that credit wanes over time for new sports betting apps until it goes away entirely after a year of operation. The proposal would change that. Instead, the sportsbooks could deduct up their promotional spend from their taxable revenue at a rate of 1.75% of the amount they take in bets each month.
It’s unclear how much support the measure has in the state assembly. Sportsbook operators certainly wouldn’t turn it down. While 1.75% doesn’t sound like a big deal, 1.75% of the $513 million that Virginians wagered in January of this year would have amounted to $7.69 million in tax savings for the sportsbooks.
If the casino numbers continue to escalate with each new facility, the state could more than make up for that loss. It will be some time before the Virginia Lottery can ascertain that situation, though.