Virginia’s new sports betting industry is set to grow into one of the largest markets in the country, according to research released this week.

Analysts PlayVirginia say that the market could ultimately generate more than $5 billion in annual wagers, and as much as $400 million in revenue, with $60 million going to state taxes.

Last month, Virginia became the 20th US state to offer sports betting. And early indications are that the state is in the position to become one of the most lucrative markets, with forecast revenue of almost $1 billion and $125 million in state taxes by 2024.

Virginia’s likely strength as a betting hub is due to a number of factors. The state has a large number of sports fans, and is also in a strong position to draw customers from Washington DC, where there has been some dissatisfaction with the state of the sports betting sector, and the city of Baltimore, at least until the state of Maryland launches its own sports betting market. Virginia may also be able to draw some business from North Carolina.

The state launched as a solely online market, which is relatively rare in the new US betting sector, and puts Virginia in a strong position compared to states that require in-person betting. Virginia also has a tax structure that is considered favourable for the growth of the sector. The state’s regulatory framework imposes a 15% tax rate on sports betting revenue. Although this is a higher rate than most states, it is below both Tennessee and Pennsylvania and both of those territories have generated considerable revenue from their sports betting industry.

The launch of Virginia sports betting has also happened at one of the busiest times of the year in sport, with the Super Bowl taking place last weekend.

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