Virginia seeks to ban bonus deduction for betting taxes

Legislators have introduced a bill that seeks to eliminate the opportunity to deduct bonus payouts from Virginia’s sports betting tax.

US.- A bill introduced by representative Mark Sickles seeks to prohibit sports betting operators in Virginia from discounting bonuses from promotional and tax revenue after the first 12 months of gaming activity. It would amend Virginia Code Sections 58.1-4030 and 58.1-3037, clarifying that from 12 months after rollout, operators must tax their income without deducting bonuses.

The bill would also remove an allowance to carry forward adjusted negative gross income to the next month and deduct it from the operator’s tax liability for that month. This currently applies as long as the negative amount is not carried over to more than one month within 12 months of being incurred.

According to the new bill, sports betting will continue to be taxed at 15 per cent of revenue. House Bill 1103 is awaiting a committee referral.

Sports betting launched in Virginia on January 2, with FanDuel’s sportsbook the first sportsbook to go live. Sports betting was legalised last April following the implementation of governor Ralph Northam’s amendments to the bill.

Virginia’s sports betting volume reached $427.3m in October, setting a new state record and making Virginia the quickest US state to reach $2bn in lifetime wagers. However, gross gaming revenue slipped 2.5 per cent to $30.2m, down from a record $30.9m in September. In November, operators in Virginia paid $4.2m in taxes. Revenue for the month was $29.9m, while the total promotional spend was $15m.

Focusgn.com