June 23, 2022 4 min read


Sports Betting Loopholes Addressed in Virginia, North Carolina Struggling Legalization

Sports betting in Virginia first launched in January 2021 and lawmakers are finding ways to increase tax revenue by closing a couple of loopholes. North Carolinians don’t have those problems since sports betting is still struggling to pass legalization.

Virginia Lawmakers Eliminate Freebie Loopholes

Lawmakers in Virginia took the opportunity of developing the upcoming state budget to address the deductibles loophole for promo expenses and free bets, the existence of which has allowed sports betting operators to write off dozens of millions of dollars of taxable revenue, thus resulting in missed tax income for the state. Free bets allow betting operators to attract or retain players and as per the new budget, which will be in effect starting July 1, these will be deductible only in the first year of starting operation, along with promotional expenses.

Virginia bets amount to about $4.98 billion, with operators keeping 8.5%. This means the state has collected $29.8 million in taxes, but as reported by the Danville Register and Bee, this loophole has cost the state around 43.7% of the revenue for the gaming operators in Virginia, which means the state has missed out on what would amount to $26.7 million in taxes.

Since launching, of the twelve sports betting operators in Virginia, only five have paid taxes, with the rest managing to avoid doing so entirely, mostly because of loopholes. Virginia is among the lowest taxers with a 15% tax rate, while states like Pennsylvania, which also offers similar deductions, tax at a rate of 36%.

Continuing with narrowing down lists that include Virginia, 30 states offer legal sports betting. Virginia is one of the eight states that allow for deducing promo dollars and free bets, which will decrease the number to seven as of July 1. Virginia is also joined in a list with seven other states – Connecticut, Iowa, New York, Washington DC, and Pennsylvania – that do not allow for NBA draft wagers. Betting on state college sports is also still illegal in Virginia.

North Carolina Sports Gambling Narrowly Missed Legalization

In more news about stringent gambling, North Carolina legislation to legalize sports betting faltered after a 51-50 House voting on Wednesday. The same goes for a supplemental measure, part of another bill, that would have addressed the taxation of gambling operators, which was also voted 51-50 on Wednesday. This was a blow for some proponents, as the two bills passed through the House Judiciary I Committee on Tuesday evening.

The unexpected coalition that made it happen was one between liberal democrats and social conservatives, citing the dangers of gambling. Multiple opposed parties argued that sanctioning sports wagers will lead to the population developing problem gambling and gambling addict would increase theft levels or fall deep in debt.

Between 10 and 12 interactive sports betting operators would have been expected to be licensed, with the North Carolina being home to multiple NASCAR teams and tracks, major-league sports franchises, golf, and college football. The symbiotic sports betting bills would have enabled people aged 21 and over to bet as early as January 2023, with supplementary legislation for setting aside $2 million for programs focused on problem gambling and helping gambling addicts.

Since so many neighboring states already have sports betting legalized, it’s unclear how unaffected North Carolinians are from the decisions of their neighbors. As Rep. Jason Saine, a Lincoln County Republican has reportedly said, “It could resurface depending on what happens. If not, sports wagering is going to remain an issue for the state of North Carolina because … states around us are doing it.” Furthermore, retail sports betting is already legal in not one, but two local American Indian casinos, so maybe taking the band-aid off and getting a grip on problem gambling through state-funded programs is not the worst idea.


Kyamil is a big tech fan, who loves hummus on everything and has enjoyed writing from a young age. From essays, through personal art, to news pieces and more serious tech analysis. In recent years he’s found fintech and gambling collide with all his interests, so he truly shares our core passion for the entire gambling scene and furthering the education of the mass citizen on these topics.

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