After a truncated application period, Virginia received 25 applications for sports betting licenses. The state’s regulators will now have some exceedingly difficult decisions to make, as, by law, they can hand out up to 12 online sports betting licenses.
The Lottery Board now has 90-days to decide on each licensee.
With far more applicants than licenses, there are going to be a lot of unhappy companies. If past is prologue, you can expect accusations of impropriety and backroom dealing, and possibly lawsuits when the dust settles.
The Next Steps on the Road to Licensing = Tough Choices
The interest in Virginia sports betting is easy to understand. The state passed an industry-friendly law that extended to its regulations and is one of the most populous and highest-earning states in the US.
So how will regulators decide which companies make the cut?
Priority to Land-Based Casinos
Virginia’s law requires regulators to give preferential treatment to the state’s yet-to-be-built land-based casinos. That means that four of the 12 licenses are already spoken for:
- Bristol = Hard Rock International
- Danville = Caesars Entertainment (William Hill)
- Portsmouth = Rush Street Gaming (BetRivers)
- Norfolk = Pamunkey Indian Tribe
A fifth casino proposed by the Pamunkey Indian Tribe in Richmond will go before the voters next year. It’s unclear if Virginia regulators will hold a license for the Pamunkey Tribe’s second casino project.
That means there could be as few as seven possible licenses up for grabs and some 20 applicants to choose from. As such, some big sports betting names will be left out in Virginia.
The list of applicants won’t be revealed until licenses are issued. Still, regulators will likely be picking from a list that includes many big names in the US sports betting industry like FanDuel, DraftKings, BetMGM, Penn-Barstool, and Churchill Downs-Bet America, as well as lesser-known (in the US) and smaller companies.
According to regulators, they will judge each application on “a number of factors, including their past experience and success with sports betting in the United States, their efforts to solicit minority investors and the number of new jobs and tax revenues they expect to generate in the commonwealth.”
Expect Bitterness after the Selection Process Ends
A recent example of what happens when the state selects winners and losers is found in Massachusetts.
Despite having one of the most transparent processes in gaming history, the Massachusetts Gaming Commission came under extreme fire before, during, and after it selected the state’s casino licensees (here, here, here, and here).
Virginia can expect the same from the snubbed sports betting applicants. Big companies left out in the cold will cry foul, and small companies will complain that they never had a chance against the major players.
What effect that might have on the state’s launch timeline is an open question.