Virginia Posts More Proposed Sports Betting Regulations

Virginia Posts More Proposed Sports Betting Regulations
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A month after posting licensing and consumer protection regulations, the Virginia Lottery on Monday posted more governing rules.

It’s another step in the process to have sports betting in place no later than January, if not sooner.

RELATED: More on Virginia sports betting and gaming

The lottery has a Regulatory Town Hall website for public comment that is in place until the state adopts the sports betting regulatory framework by Sept. 15. That date is written into the legislation.

The Virginia Lottery will set the regulations and run sports betting in the state. Some key dates posted on the lottery’s website once the law went into effect July 1:

  • July 15 to Sept. 9: Public comment period for sports betting regulations concerning: Application Requirements, Consumer Protection Program and Consumer Bill of Rights.
  • Aug. 10 to Sept. 9: Public comment period for sports betting regulations concerning: Operations, Internal Controls and Enforcement.
  • No later than Sept. 15: Deadline for the Lottery Board to approve regulations for submission to the Virginia Register for publication. Regulations must be published pursuant to the Virginia Register publication schedule for 30 days before becoming effective.
  • Mid-October: Lottery begins accepting applications for sports betting permits. The lottery will have 90 days to review each application.

Sections of New or Updated Regulations

Some of the new or updated regulations posted Monday cover items such as permissible wagers (references bets placed after events started), integrity monitoring, house rules, geolocation systems, sports betting platform requirements — including that bets need to be placed in Virginia — and advertising/marketing.

The regulations originally posted in mid July had details about the state’s “Sports Bettor’s Bill of Rights,” its voluntary exclusion program, the permit application process and a consumer protection program.

Each applicant for a sports betting license that’s good for three years must pay a $250,000 fee and there is a renewal fee of $200,000. But some of the fees associated in the application process and subsequent licensing seem high, like the $50,000 background check fee per principal that Gov. Ralph Northam wanted. That fee seemed to concern stakeholders when the amendment was proposed.

What is a ‘principal?’

In the definitions section, a “principal” is an individual who, solely or together with the individual’s immediate family members, owns or controls, directly or indirectly, 5% or more of the pecuniary interest in any entity that is a permit holder, or has the power to vote or cause the vote of 5% or more of the voting securities of such entity. A “principal” includes an individual who is employed in a managerial capacity for a sports betting platform on behalf of a permit holder.

Depending on the ownership structure, there could be a lot of principals in a company to be investigated at the $50,000 background check fee per principal.

When the proposed regulations were released in July, the Virginia Lottery said it was not implementing a payout cap like the one in the Tennessee regulations — 10% — that has stakeholders questioning whether or not to enter the market.

The initial rules also prohibited betting on Virginia colleges. NCAA events in the state can be wagered on, just not games involving a state school. The proposed regulations also ban prop bets on college games. And betting on the Olympics is not allowed.

All in all, the proposed regulations posted by the state are consumer friendly and seem on par with those in strong legalized betting states, including a 15% tax rate. The lottery has to set the regulations by Sept. 15 so it can move on to the application process.

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