Virginia’s highly lucrative sports gambling market officially opened Thursday when, shortly after 2 p.m., a cellphone user placed a $25 bet on the Golden State Warriors to beat the New York Knicks.
Sports betting was approved by the General Assembly in 2020, and the Virginia Lottery was tasked with vetting interested companies.
That law included a provision that stirred controversy this week, though, as FanDuel was able to beat the other interested players to market by affiliating with the Washington Football Team.
Under the regulations, pro sports teams based in Virginia were given “substantial and preferred consideration” in opening a sports book, and were allowed to partner with an established operator to do so.
The NFL team, which is based in Ashburn and pays about $14 million a year in state taxes, is considering locations for a new stadium and headquarters facility, and the gambling perk is intended to be another reminder that Virginia is interested in building the new stadium in the commonwealth.
By partnering, FanDuel was able to take advantage of that provision, and get a leg up in what is projected to be a $400 million market.
National companies MGM, Draft Kings, Barstool Sports and Wynn, among others, have also applied for licenses but, as of Thursday morning, at least one of those companies had not received word on its status, according to a source who did not want to be named so as not to anger the lottery and jeopardize his company’s chances.
The race to launch sportsbooks is particularly urgent because the biggest sports betting day of the year, Feb. 7 for the Super Bowl, is less than three weeks away.
Virginia Lottery spokesman John Hagerty said the awarding of more permits is imminent.
“We anticipate more than one sportsbook will be in position to begin accepting legal wagers from Virginians in time for the Super Bowl,” he said.
All sports betting will be done on mobile devices at launch, though physical sportsbooks are expected to follow. Gambling on Virginia college sports teams is prohibited.
Companies are required to verify their customers are located in the state before allowing a bet to be placed.
FanDuel Chief Marketing Officer Mike Raffensperger said being live for the Super Bowl, as well as this weekend’s conference title games, is a massive opportunity.
“It’s humongous,” he said. “There really is no other day throughout the year where we can get more people to try our sportsbook than the Super Bowl.”
Raffensperger said the company will aggressively court the market and is offering a “risk-free” bet of up to $1,000 to new customers — if the bet is a loser, the company will refund the money as credit to the player’s account.
The operating permit will be jointly held by FanDuel and the WFT, and while the team will promote the site, at the moment the mobile interface remains under the FanDuel brand, with some Washington Football imagery.
The NFL has made an abrupt shift on gambling in the past decade. The league once rejected all sponsorships and instructed players and employees to stay away from even fantasy football. But as betting on sports has entered the mainstream, that stance has softened.
Virginia has made no secret of its desire to land a new stadium for the team, and providing it a head start into a lucrative new market is the latest effort to court that project.
Del. Mark Sickles, D-Fairfax, who was a sponsor of the betting legislation last year, said Thursday morning that no deal has been struck for a new stadium; rather, the preferential treatment is a “sign of good faith on our part.”
Sickles added that FanDuel submitted a thorough and impressive application to the lottery that contributed to its approval.
Gov. Ralph Northam’s administration is not actively pursuing a stadium project for the Washington Football Team in Northern Virginia or considering direct taxpayer incentives to attract it to the state, sources said.
However, the administration has discussed with the NFL franchise its potential infrastructure needs — such as land, road access and utilities — for a larger “live, work, play” entertainment district around a new stadium.
The governor’s office also is talking to the team about keeping its preseason training camp in Richmond after the expiration of its lease with the city.
Separately, the House General Laws Committee approved legislation on Thursday to make clear that casinos licensed in up to five cities, including Richmond, will be entitled to a sports betting license in addition to the dozen that the lottery will award.
“Everything in here is what we thought we were passing last year,” Sickles told the committee, which voted 17-4 to approve the bill.
The committee adopted a separate bill to clarify the casino law enacted last year, after first amending it to make clear that the General Assembly expects casino operators to make a significant effort to include minority investors in the projects, as well as in goods and services they procure.
House Appropriations Committee Chairman Luke Torian, D-Prince William, had asked for similar language in the casino legislation adopted last year, but he pushed for stronger assurances that operators will include Black and other racial minorities as equity investors in projects licensed by the state.
Torian, an African American minister from Woodbridge, said it is unfortunate that the state cannot require minority investment, but he suggested that casino operators be “deliberate in seeking minority ownership.”