Is Online Sports Betting Legal in Virginia?
With New Jersey spearheading the effort, the Supreme Court overturned the Professional and Amateur Sports Protection Act (PASPA) in 2018, which previously banned all sports betting outside of Las Vegas. This paved the way for states to legalize and regulate betting as they saw fit. Virginia's sports betting laws took some time to adapt, though there were signs that things would be changing in the near future.
It didn't take long for Virginia's sports betting licenses to be awarded, with the first legal sportsbook launching in January 2021. The state approved HB 896 in 2020 as a way to increase tax revenue to put towards public education. According to the Virginia Lottery, sports betting activity is taxed based on a permit holder's adjusted gross revenue. Currently, several operators are interested in acquiring licenses, so we expect more to open soon.
Virginia's sports betting regulations weren't the only thing set to change for local gamblers. As part of the 2020 legislation legalizing Virginia betting sites, the state also voted to permit future land-based casinos in cities that meet specific requirements. Currently, four land-based casino properties are in the works, with more expected to be announced in the coming years.
Horse racing betting, which was once the only legal form of gambling in the Commonwealth, also saw a bit of expansion. The sports betting laws in Virginia were updated to permit the installation of historical horse racing (HHR) machines at Colonial Downs. This is the only horse racing track in the entire state.
This new technology combines instant win slot play with horse racing and has been incredibly popular since it was launched in 2018. Additionally, there are four off-track betting locations throughout the state.
However, these are located far away from most of the state's population, so most gamblers will be happy to know horse racing betting is offered at all the best legal online sportsbooks in Virginia. The betting situation is similar in the new online betting market of Maryland.
Paying Taxes on Sports Betting Winnings in Virginia
While most people consider taxes to be a nuisance, it's the main reason legal VA betting sites exist in the first place. For those who choose to wager, an understanding of the basic overview of the taxes on sports betting in Virginia is needed. All gambling winnings are subject to Virginia state tax rates, which range from 2.5 – 5%. However, any income over $17,000 is taxed at the highest rate.
In addition to sports betting taxes in Virginia, winnings are taxed at the federal level too.[2] You must pay 24% federal income tax on any gambling winnings you earn. Earnings over $5,000 are subject to withholding, and your sportsbook must send you a W2-G form to file with the IRS if you end up in the black at the end of the year.
While it can be a hassle getting all the paperwork in order, you only need to deal with it once per year. Furthermore, if you enjoy Virginia online sports betting, it helps to know that all the revenue is put to good use. According to the Virginia Lottery, taxes on sports betting go towards the state's education system.