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Virginia bill would remove bonus deduction for betting taxes


A bill that aims to remove the opportunity to deduct bonus spending from sports betting taxes in Virginia, effectively increasing the amount of tax that operators will pay, has been introduced to the state House.

House Bill 1103 aims to prohibit sports betting operators in Virginia from disregarding promotions and bonuses from taxed revenue, after the first 12 months of betting activity has passed.

The bill looks to do this through amending sections 58.1-4030 and 58.1-3037 of Virginia’s state code, clarifying that from 12 months after launch, operators will be taxed on revenue without deducting bonuses.

In addition, the bill will remove the permission to carry over a negative adjusted gross revenue to the following month and deduct it from the operator’s tax liability for that month.

This applies as long as the negative amount is not carried over to a month more than 12 months after it was generated.

The tax rate for sports betting will continue to be 15% of revenue.

If the bill is passed, negative adjusted gross revenue will no longer be able to affect future operator taxes.

The bill was prefiled and introduced on January 12, and is pending a committee referral.

It is sponsored by Delegate Mark Sickles.

Sports betting was first launched in Virginia in January 2021, after FanDuel launched its partnership in the state through a deal with the Washington Football Team. It was legalized the year before in April after bill amendments from Governor Ralph Northam were put in place.

In November, operators in Virginia paid $4.2m in taxes in November. The revenue for the month was $29.9m, while the total promotional spend came to $15.0m. A total of $1.7m was paid in October, when promotional spend was $15.8m.