June marks the final month of the fiscal year in West Virginia. And by all accounts, it’s been a successful one for West Virginia online casinos.
Through May 13, online casinos have generated more than $18 million in taxes and are on pace to hit $20 million for the fiscal year.
All forms of gambling, including retail casinos and sports betting, have generated $53.3 million in taxes in FY ’23. Sportsbooks reported $4.9 million in taxes. The state’s brick-and-mortar venues accounted for the remaining $30.4 million.
WV online casinos eye 50% growth in a year
West Virginians have wagered over $3.5 billion on iGaming apps and websites in FY ’23, resulting in $120.4 million in revenue. West Virginia online casinos are taxed at 15%, resulting in the $18 million mentioned above.
These numbers show increases from the full FY 2021-22 reporting period. With six weeks left of reporting, West Virginia online casinos already have year-over-year growth in all three categories.
- Handle: Up 36.6% YoY (from $2.6 billion in FY ’22)
- Revenue: Up 39.7% YoY (from $86.2 million in FY ’22)
- Taxes: Up 39.7% You (from $12.9 million in FY ’22)
As the final six weeks of FY ’23 play out, these percentages could eclipse 50% YoY gains and set new highs to start chasing in July.
Tremendous growth becoming a trend in all sectors
Online casinos’ 50% growth in FY ’23 will come after more than 100% YoY growth in FY ’22.
- Handle: Up 118.6% YoY (from $1.2 billion in FY ’21)
- Revenue: Up 147.3% YoY (from $34.9 million in FY ’21)
- Taxes: Up 158.6% YoY (from $5 million in FY ’21)
West Virginia sports betting has also increased its YTD revenue totals and tax contributions as the state’s gambling economy matures.
Through mid-May, it has already outperformed last year by generating $48.7 million in revenue and $4.9 million in taxes. Sportsbooks had $44.8 million in FY ’22 revenue, resulting in a $4.5 million tax bill.
Where does gambling tax money go?
- Division of Tourism
- Division of Natural Resources
- State Park Improvement Fund
Online casino revenue has a 15% tax rate, while retail casino and sports betting revenue is taxed at 10%.
A portion of that money goes toward WV Lottery administrative needs and pensions, while the rest goes to tourism and state parks. Here’s a tax breakdown for FY ’23 to date:
- iGaming ($18.1 million): $15.2 million state share; $2.9 million administration share and pension
- Sports betting: ($4.9 million): $4.2 million state share; $739,000 administration share
The West Virginia Lottery came into existence in 1986 and has invested more than $1.3 billion into tourism-related projects in its 37-year history.
iGaming could surpass $20 million in FY ’23 taxes
West Virginia casinos enter the final month of FY ’23 with iGaming already having set new records. However, they could reach more landmarks before the fiscal year’s end.
With $18.1 million in total taxes, the state only needs to collect another $1.9 million to reach $20 million for the fiscal year. This equates to a little over $300,000 per week, which has been an easy task all year.
YTD online casinos’ handle totals $3.52 billion, meaning casinos would need to average around $80 million per week to hit $4 billion in FY ’23.
Of these milestones, the $20 million in taxes is more likely. If casinos hit $4 billion in total wagers, however, they will blow the tax landmark out of the water in the process.