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Governor Northam Proposes Major Changes to Sports Betting Bill

Virginia legislators passed an online sports betting bill back at the beginning of March, and it seemed like a foregone conclusion that the bill would be signed into law. Governor Ralph Northam has been in favor of legalizing sports betting, but he was unhappy with a few aspects of the bill, and has made some amendments and sent it back to lawmakers.

Initially, it was believed that Northam simply wanted more sports betting tax revenue to help fund education, but a closer look at his amendments paint a different picture.

One of the major points that Northam wants included in any law is that NASCAR be defined as a major league sports franchise. They would join the current list, which includes the NBA, NFL, NHL, MLB, and Major League Soccer.

All major league sports franchises can apply for a sports betting license to take bets at their home stadiums. In the case of NASCAR, sports betting could be offered at Martinsville Speedway and Richmond Raceway.

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Another major change that Northam is proposing is under the licensing fees proposal. Northam is suggesting that operators pay a $50,000 background check fee so that the state can check on anyone labeled as a “principal” in the operations department.

This would include anyone that is a part of the management team for sports betting companies looking to break into the industry in Virginia.

The current licensing fees call for a $250,000 payment for an initial three-year license, and then renewal fees cost $200,000. Those, while still being expensive, are much cheaper than other states in the US.

The problem is that some of these companies have close to 20 people defined as a principal person, which could take their initial fees over $1 million just to apply for a license.

Sports betting revenue is set to be taxed at a rate of 15% in Virginia, and the bill calls for 18 online sportsbooks licenses to be handed out. Up to five licenses will go to licensed casinos, while 12 licenses will be issued to online-only companies.

The final license is set aside for a relocating major sports franchise. This is in an effort to get the Washington Redskins to play their home games in the state of Virginia, and Maryland is also using sports betting as a bargaining chip as well.

Could “Gray Machines” Fund COVID-19 Relief Package?

The state of Virginia is looking to ban unregulated gaming machines in the state, but Governor Northam is hoping that can be delayed. Governor Northam is hoping that the legislature will agree with his amendment to delay the shutting down of these machines to bring in close to $150 million in relief money to help the state recover from the coronavirus pandemic.

The bill in question is Senate Bill 971, and Northam also sent it back to lawmakers on Saturday night. The legislature is set to reconvene on April 22, and he hopes that they will take his recommendations and approve his amendment.

Gray machines will still be banned under this proposal, but it would not happen until July 1, 2021. The initial bill called for the suspension of these machines to happen on July 1, 2020.

Northam is proposing that companies pay $1,200 for each of the machines that are in operation at their business. Businesses include convenience stores, truck stops, liquor stores, and restaurants.

Almost 85% percent of this fee would go directly into the COVID-19 relief package if the amendment is passed. The state of Virginia estimates that there are close to 15,000 gray machines currently in operation in the state.

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