Virginia could become the seventh US state with an online lottery

Fingers Crossed; Virginia Online Lottery Bills Passed In Each Chamber

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There’s no such thing as a sure bet when it comes to gambling legislation, but the odds of Virginia getting an online lottery are looking pretty good.

A bill which would repeal the prohibition against online ticket sales passed the House on Monday, while a similar proposal cleared the Senate the very same day.

HB 896 from Del. Mark Sickles and SB 384 from Sen. Jeremy McPike passed their respective branches of the legislature by votes of 70-27 and 27-12. Each bill covers both online lottery and sports betting.

The two bills are identical in the first regard, simply adding the phrase “…including the sale of tickets or shares over the Internet” to a list of the powers of the Virginia Lottery.

Online lotteries are all the rage

At the moment, most state lotteries are limited to selling physical tickets at retail outlets. A few also have video lottery terminals (VLTs) at bars, restaurants, gas stations and the like. Only six currently have an online component to their lottery:

It now appears likely that Virginia will become number seven.

Not all the states with online lotteries provide a breakdown of online versus conventional ticket sales. Michigan does, however, and its numbers show that online lottery sales are growing faster than any other category of product. It’s not alone, either. Georgia, which has had an online lottery since 2012, reported that sales for its Diggi online scratch tickets more than doubled from 2017 to 2018.

Virginia looks like a strong contender in the race to build the best US online lottery for a few reasons. The state has no land-based casinos, most notably, though efforts are underway to change that, perhaps paving the way for VA online casinos some day. For now, though, that means no slot machines, and online casino gaming is therefore unlikely until the situation changes.

Other states’ iLotteries often include products with gameplay resembling that of slot machines. Assuming Virginia’s is the same, there will probably be quite a bit of demand given the lack of equivalent options. There are also multiple bills on file in the Senate which could allow the possibility of VLTs for land-based play in Virginia.

Legislative wrinkles regarding sports betting

There were originally three bills all seeking to allow sports betting and online lottery — the two which passed Monday, plus HB 911. The latter differed from HB 896 in setting a lower tax rate and licensing fee while prohibiting betting on college sports. The two bills have since been merged.

HB 911’s taxes and fees were abandoned in favor of HB 896’s, which include:

  • a 20% tax on adjusted gross revenues
  • a $250,000 application fee
  • a $200,000 renewal fee once every three years.

As a compromise, however, the new version of HB 896 includes a prohibition on in-play betting for collegiate sports and on all betting on teams from the state’s own colleges. That, of course, includes some major D-I schools like the University of Virginia and Virginia Tech.

The Senate bill is quite similar to HB 896, with the main differences being a 15% tax rate and no restrictions on betting on college sports. It also specifies a narrower range in the number of licenses to be issued and allows professional sports teams to operate the only venues where retail sports betting could be offered.

Virginia, it should be noted, does not currently have any professional sports teams across the four major US leagues.

Both bills also mandate the use of official league data in their current posture. something the gaming industry objectively considers bad policy.

What’s next for VA online lottery bill?

When similar bills pass the House and Senate simultaneously, the next step is to reconcile the two.

Fortunately in this case, the differences aren’t extreme. It should be possible for senators and representatives to agree on a tax rate somewhere between 15% and 20%, and come to terms on the question of college sports. The other differences between the bills are trivial.

As far as a Virginia online lottery goes, both bills stand in full agreement. Both passed by wide margins, so there’s broad support for such an expansion in both halves of the legislature.

Should a compromise bill pass both the House and Senate, it would go to Gov. Ralph Northam for the final action. Although not a gung-ho gambling advocate, Northam has previously indicated that he is open to the topic. He signed a bill last year to allow state officials to begin working toward regulated casino gambling.

The primary threat to passage at this point seems to be the calendar.

Virginia’s legislative session comes to a close on March 7, giving lawmakers less than four weeks to reconcile the bills. That shouldn’t be a problem, but there’s still some risk of a deadline stalemate over tax rates or college sports.

Even that scenario would likely just mean more waiting, however. There’s enough support for an online lottery that it should happen sooner or later.

- Alex is a journalist from Dartmouth, Nova Scotia, Canada. Now site runner for Online Poker Report, he has been writing about poker and the online gambling industry in various capacities since 2014.
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