Daily fantasy sports companies FanDuel and DraftKings have been fighting to hold on to the industry as of late, as most states in the US are reviewing the gamin option. As several states such as New York and Nevada rule the activity as illegal gaming, one state is now moving forward to regulate the gaming option. A recent bill moved forward in the state of Virginia within the House and Senate to regulate fantasy sports betting. The bill now has to be signed by Governor Terry McAuliffe to become law.
The Fantasy Contests Act (SB 646) makes the General Assembly of the Commonwealth the first to have approved guidelines for the fantasy sports betting industry within the United States. With the new rules, companies such as DraftKings and FanDuel will have the opportunity to run the games but clearly state the prizes are in advance. The contests can only be based on the performance of a group of individuals and not be reliant on scores, point spreads, team performance or one player’s stats. Basically, the state of Virginia is defining how daily fantasy contests will be different from standard gambling. SB 646 even states that daily fantasy contests that use these guidelines is not ‘illegal gambling’, which is an important portion of the bill to note.
Consumer protections are also required within the bill. A company that hosts the games will need to ensure that the participants of the daily fantasy contests are not an athlete who participates in the actual sport. A third party must be hired by the DFS Company to verify that their procedures and conduct are abiding by the guidelines with an independent audit taking place every year.
If the new rules are not followed, a $1,000 maximum fine will be imposed per violation and a maximum of $50,000 can be issued. Companies must also pay a $50,000 fee to register with the Department of Agriculture and Consumer Sciences.
DraftKings released a statement on the new legislation, with the Director of Public Affairs, Griffin Finan commenting:
“Today the Virginia General Assembly took an important step toward ensuring that fans in Virginia can continue to enjoy fantasy sports contests with thoughtful and appropriate consumer protections in place. We thank Delegates Jackson Miller and Marcus Simon and Senator Ryan McDougle for their leadership in bringing a common sense regulatory framework through the legislature. We are grateful for their support and are actively engaged with dozens of legislatures around the country to replicate this success.”