Virginia is Winning the National Race to Regulate Daily Fantasy Sports

With Bills Passed in Both State House and Senate, Virginia is Winning the National Race to Regulate Daily Fantasy Sports

With acts passed in both the state House of Representatives and Senate, Virginia may in all likelihood become the first state to finalize a regulatory structure on Daily Fantasy Sports.

“SB 646 Fantasy Contests Act; created, registration required, conditions of registration, civil penalty” passed in the Senate on February 8, by a vote of 28 to 10; HB 775, its sister bill, passed in the House on February 17, and it has since been referred to the Committee on Commerce and Labor where it is pending review.

Across the nation, state courts are hearing arguments for and against DFS in the wake of phenomenal growth of the DFS market over the past decade, and it has done so without the arm of the law to ensure fair play. Democratic Delegate Marcus Simon said, "I think it's important that we sort of establish a sort of regulatory framework because right now it is the Wild West… There are no regulations at all. No consumer protections. Nothing to prevent kids from playing."

The Virginian Fantasy Contests Act would enact these kind of consumer protections, but the bills notably lack something most other states’ attempts have included: in its current form, though it will charge fees to obtain and renew licenses with the Department of Agriculture and Customer Services, Virginia will not be taxing its DFS companies. Democrat Alfonso Lopez laments that “Virginia doesn’t get a piece of this. I mean, if we are going to regulate it. If we’re going to allow this kind of gambling to go on in Virginia we should at least get some kind of benefit from it.” Generally speaking, Republicans disagree. “I did not bring it in to be a tax increase bill, so I was not about to tax these companies,” declared Republican Jackson Miller. “And so what I wanted to do is to put some consumer protections in there but also make it so that the over one point two million Virginians who play it now can continue to play it."

While many states have introduced similar bills suggesting DFS regulation, many have also seen contesting bills that would see it banned and criminalized at the same time. Washington State’s SB 5284, SB 6333, and HB 1301 each were written to “[classify] fantasy sports contests as a contest of skill.” HB 2370, however, would “[prohibit] fantasy sports games” and would penalize violators with a class C felony.

While Virginia may be the first to begin to officially license its DFS operators, it would not be the first state to have legitimized the “game of skill” argument. That title would go to Kansas. Kansas is a strange anomaly, having voted in 2015 to allow DFS, but making no attempt to tax or regulate it.