A Closer Look At The Official Virginia Sports Betting Regulations

Posted on September 16, 2020 - Last Updated on October 6, 2020

The Virginia Lottery Board finalized the VA sports betting regulations this week, incorporating much of the feedback from the open comment period.

On Tuesday, VA Lottery officials approved and released the 69-page document during a virtual meeting.

The 56-day comment period included input from nearly every major sportsbook operator, as well as professional sports leagues and the general public.

As detailed in the regulations, sportsbook operators can apply for up to seven licenses that are available to online sportsbooks. An additional five licenses will be set aside for retail casinos in Virginia, which will eventually host online sports betting. Those casinos will likely begin opening in 2023.

With the regulations approved, the Virginia Lottery will take sportsbook operators’ applications from Oct. 15 to Oct. 31.

VA Lottery Director Executive Director Kevin Hall will then have 90 days to determine if an applicant receives a license. The first VA sportsbooks will likely be online in January.

So, what’s in the final version of the VA sports betting regulations? Let’s take a look.

Sports leagues get betting data

The preliminary sports betting regulations stated that sports leagues could get “real-time information sharing for wagers” at the discretion of the lottery’s executive director.

However, the NBA, MLB and PGA all pushed back during the comment period.

Ultimately, the VA Lottery granted the leagues’ wishes in the final regulations. Now, the leagues can get official league betting data (bet amount, type, time of the wager, IP address of the bet, results) whenever they request it.

However, lottery officials didn’t approve the leagues’ request to amend its definition of a “supplier.”

The change could have allowed leagues, like the NFL and NHL, to avoid needing a $125,000 supplier license. However, the definition remains the same in the final regulations:

“Sports betting supplier” or “Supplier” means a person who: (a) manages, administers, or controls wagers initiated, received or made on a sports betting platform; (b) manages, administers, or controls the games on which wagers are initiated, received, or made on a sports betting platform; or (c) maintains or operates the software or hardware of a sports betting platform, including geolocation services, customer integration, and customer account management.

No Olympic betting, no in-state college betting

Virginia’s regulations ban VA sportsbooks from taking wagers on in-state colleges and universities, as well as youth sports.

VA also bans all college sports prop bets. Wagers on “any type of possible injury, unsportsmanlike conduct, or any other officiating call” also aren’t permitted.

During the open comment period, sportsbook giant, DraftKings, pushed back on one other ban: Olympic betting.

As with other betting restrictions, the DraftKings officials argued that it would prompt Virginians to cross into states that permit such wagers.

However, during Tuesday’s meeting, VA Lottery Deputy Director for Gaming Compliance Gina Smith said the ban on Olympic wagering would remain. She argued that Olympic competitions often involve minors and that there would be no efficient way to weed out those contests.

However, Smith said the board would re-examine the topic before the 2021 Summer Olympics in Tokyo.

Virginia Sports Bettors’ Bill of Rights

Virginia was the first state to create a “Sports Bettors’ Bill of Rights,” which spells out the consumer rights and protections.

The final regulations don’t include the requirement that sportsbook operators post the text of the “Virginia Sports Bettors’ Bill of Rights” on their websites and apps. Instead, operators must link to the document on VALottery.com.

The initial regulations also called for operators to post real-time betting data. The data would include the total betting handle on available wagers and how the odds were determined.

Operators argued that it’s proprietary information. They also argued that including such detailed data could slow down app performance.

Ultimately, regulators slimmed the requirements. Now, operators must simply list the “amount wagered on the bet,” “the odds at which the wager is offered” and “the payout amounts.”

Who is a VA sportsbook ‘principal?’

Ten sportsbook companies issued feedback during the VA Lottery’s open comment period. Three of them – Caesars, DraftKings and Penn Interactive (Barstool Sports) – all requested a more succinct definition of “principal.”

After all, the VA Lottery requires a $50,000 background check and licensing fee for each company “principal.” If the definition is too broad and covers too many employees, they argued, the licensing fees could skyrocket.

The regs initially defined principals as 5% stakeholders or anyone “employed in a managerial capacity for a sports betting platform on behalf of a permit holder.”

Although still a bit vague, the final regulations more acutely define a principal as “the Chief Executive Officer of the permit holder and, if applicable, its sports betting platform supplier” as well as “any individual who has ultimate responsibility for the operation of the sports betting platform in Virginia.”

 

 

 

With the new language, most workers now probably need a simple and cheaper “sports betting employee” license. They cost $500 each. Regulators will allow sportsbook operators to request a meeting if needing clarification on specific licenses.

All licensing costs, including each sportsbook’s initial $250,000 issuance fee (and $200,000 renewal fee), cover a three-year period.

Fewer advertising and marketing hurdles

The draft regulations stated that Virginia sportsbook operators would need to submit all marketing materials to the VA Lottery for approval.

 

As a Penn National representative argued during open comments, such a requirement could prove to be “overly burdensome.” It would also slow down a sportsbook’s ability to quickly post timely promotions through traditional and social media.

Now, though, operators must simply maintain an archive of marketing materials. They must make it available upon the VA Lottery’s request.

Operators also can’t target advertising toward people younger than 21, and ads can’t feature students, schools/colleges or school settings. Additionally, endorsements can’t come from minors, college athletes, schools/universities or athletic associations. For example, the PointsBetUniversity of Colorado partnership in CO could not occur in Virginia.

Advertising also can’t “saturate” a medium to the point of excessiveness, though the regulations don’t clarify what constitutes such qualifying characteristics.

Responsible gaming and closing a loophole

Some changes focused on responsible gaming and a potential loophole in the regulations.

In VA, bettors won’t need to open a wagering app to join a self-exclusion list. Instead, they’ll be able to do so on the VA Lottery website.

Gamblers can choose two- or five-year terms. However, to join the lifetime exclusion list, customers would need to visit the Virginia Lottery headquarters in Richmond.

Additionally, regulators amended language involving third-party exclusion requests. To avoid the potential for abuse, operators must simply consider such requests. The regulations don’t mandate them to do anything specific.

The preliminary regulations also allowed bettor to add themselves to the self-exclusion list. When doing so, all pending wagers would be canceled.

Bettors could abuse that system if a bet looks like a losing proposition. The new language simply requires operators to “refund any remaining balance” to players who self-exclude.

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Dann Stupp

Dann Stupp is a longtime sports journalist who’s written and edited for The Athletic, USA Today, ESPN and other outlets. He lives in Lexington, Virginia.

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