Sporttrade has received licensing approval in Virginia ahead of the 2024 NFL season

On Wednesday, Sporttrade announced that it received licensing approval in Virginia. This is now the fifth state they have sports betting market access in nationwide. Despite the announcement being made so close to the NFL season, Sporttrade has plans to launch in Virginia in October. The Commonwealth State is one of the only cities in the U.S. that has a team in the four major North American sports and the MLS. This past June, Virginia ranked ninth nationally with $415.4 million in a betting handle. That was $15 million more than their neighboring state, North Carolina. In 2021, Virginia went live in the online sports betting market and they have 12 licensees.

When entering a new market, a company like Sporttrade has several factors to take in. That includes the size of the market, the cost of a license, revenue-sharing expenses, and loss carryforward provisions and deductions on promotional expenses. Sporttrade will benefit from a second-mover advantage in Virginia. This is when companies enter a sports betting market later than most. However, Sporttrade has seen other sportsbooks prosper in Virginia and they plan to follow a similar blueprint. Several U.S. sportsbooks have closed their operations in Virginia including WynnBet, Unibet, SI Sportsbook, and Betway.

Why did Sporttrade choose Virginia as their next state to open a sports betting market in?

First off, Sporttrade is not your average sportsbook. They offer a unique experience to their users by bringing a stock-market-style approach to sports betting. This allows users to trade in and out of their positions just as a shareholder can with a security. Sporttrade believes they will benefit from the recent closure of smaller betting markets in Virginia. Another advantage of waiting to enter the betting market in Virginia is the newly passed amendment. In the past, Virginia allowed sportsbooks to deduct all bonuses and promotions for tax purposes. Under the new amendment, companies are now limited from deducting promotions for only their first 12 months of operation.

That means sportsbooks like FanDuel, DraftKings, BetMGM, and Betr can deduct promotions through this Friday. Afterward, the tax rate they will pay on bonuses and promotions is approximately 40% higher. After their analysis, Sporttrade decided to enter Virginia ahead of other states like North Carolina and Ohio.