Virginia Becomes First State to Regulate Fantasy Sports
By Kimberly Pierceall
A first-of-its-kind bill to regulate both daily and seasonlong fantasy football, basketball and baseball contests, among others, has been signed into law in Virginia.
Gov. Terry McAuliffe signed SB646, the "Fantasy Contests Act," on Monday before the midnight deadline without requesting amendments sought by seasonlong fantasy sports operators and anti-gambling advocates.
"This bill, which was passed by super majorities of both chambers, will empower Virginia to regulate this emerging industry and keep consumers safe from abuses," said spokesman Brian Coy in an email when asked whether the governor had any response to criticism of the bill.
The bill requires fantasy sports sites to pay $50,000 initially, ensure players' money is kept separate from operating funds, and turn over annual audits for the state's Department of Agriculture and Consumer Services to review.
The House of Delegates passed its version of the bill 80-20, followed by the Senate, which passed it 31-9 on Feb. 24.
The law is a reaction to intense legal scrutiny that was leveled at daily fantasy sports sites such as DraftKings and FanDuel last year after the two sites blanketed the country with advertisements, and questions were raised about the fairness of the games. Whether the sites constitute gambling has been an ongoing debate, with daily fantasy sports operators pointing to a 2006 federal law that exempted fantasy sports from being considered illegal online gambling.
The industry -- including DraftKings, FanDuel and the Fantasy Sports Trade Association -- lobbied for state regulations and has been doing so in several other states. Virginia is the first to pass the legislation.
The Virginia law doesn't mention the word "daily."
Season-long fantasy sports operators say the federal law was intended to shield their games, not daily fantasy sports, and the daily fantasy sports industry has used that law, and season-long sports contests, as cover when their legality has been questioned.
At least one season-long high stakes fantasy sports site, myffpc.com, says the fee would force it out of business in Virginia, leaving its 150 or so customers in the state like Scott Hoyt from Ashburn, unable to participate in the site's annual $1,500 contest with his nephew when the two take a trip to Las Vegas to draft fantasy athletes for their team.
In season-long contests typical of office pools, players pay an entry fee and take turns choosing athletes to be on their team for the entire season, deciding throughout the weeks who to play when. In daily fantasy sports contests, players pay for the chance to win millions of dollars in some cases by choosing teams of athletes each week in the case of football and players can draft the same athletes another player may have drafted.
"It's no different than playing blackjack or roulette," Hoyt said of daily fantasy sports.
Gambling critics have said the overly broad language in the bill could also open up the state to other forms of online gambling, including eSports which involves wagering on video game players, or betting on events such as the Oscars.
(c)2016 The Virginian-Pilot (Norfolk, Va.)