Virginia Lawmakers Cracking Down Against Daily Fantasy Sports Sites

Before sports betting was legalized across much of the U.S., many online gamblers had already been granted access to daily fantasy sports sites. This was done under the guise that playing in Daily Fantasy Sports contests involved a certain level of skill that wasn't readily apparent when betting on sports. Also, it's the format of Daily Fantasy Sports (DFS) contests that helps alleviate concerns because gamblers compete against each other with the DFS operators serving as nothing more than intermediaries.

With sports betting now available in 38 U.S. states with a few more on deck, lawmakers are starting to look at the blurred lines that exist between sports betting and DFS contests. It matters because some states allow DFS while sports betting is still illegal, and some states that offer both have different tax revenue structures for each option. At issue in Virginia and other states is proposition betting on individual player performances through DFS sites.

What is an Individual Player Performance Prop Bet?

Many decades ago, the NFL's Super Bowl made proposition betting popular. Prop bets are wagers on players, and teams to perform to a certain statistical level. For instance, a sports betting or DFS operator might post a line on NFL player A (a quarterback) to pass for a certain amount of yards with the total posted and gamblers able to bet over or under that total. This is what is referred to as a prop bet tied to a player's performance.

With sports betting sites frequently offering the same kinds of wagers, it has become increasingly clear to some lawmakers that there is a sports betting connection to individual player prop bets. This certainly caught the attention of Virginia Attorney General, Jason S. Miyares.

Miyares Closes Loophole

To be clear, retail sports betting is currently legal in some parts of Virginia. Online DFS is also legal throughout the states. What's legal to date is online or mobile sports betting. This is the target of Miyares' ire.

He views allowing DFS customers to bet on individual player performance online as tantamount to allowing them to bet on sports online, which is illegal. In a letter to Delegate Wren Williams, Miyares stated:

“It is my opinion that when a customer places a bet related to individual athletes’ performance metrics, the outcome of which is determined by reference to a contest operator’s established baseline rather than choices made by other customers the customer is engaged in sports betting and not a fantasy contest.”

Miyares hopes that Williams will use this definition to craft new legislation, making said betting activities illegal. Given the popularity of such wagers, this could end up being a major blow for DFS operators in Virginia. It's also likely to reverberate across the country, causing a major disruption within the U.S. online gambling industry.

FYI: The most widely accepted definition of Daily Fantasy Sports has three qualifiers:
- Prizes are predetermined
- Participants compete against one another, not the house
- The outcomes are not determined by a single player or team's performance.