Comments on Draft Virginia Sports Betting Regulations
August 10, 2020
11VAC 5-60 – Self-exclusion program
11VAC 5-60-20 Request for self-exclusion
Section B here requires an individual requesting placement on the self-exclusion list for sports betting to make this request “through his or her Internet gaming account.” This language is unnecessarily restricting, and requires a customer to access the very service he does not want to access in order to make the request. This is akin to requiring an individual to enter a casino in order to ban himself from a casino. We believe that adding language akin to “or through other means approved by the Department” would provide needed flexibility here. We would strongly suggest that the Department itself provide such a means through its website.
11VAC 5-60-30 Self-exclusion list
Language should be added to Section D that allows a sports betting permit holder to share information about an individual who has requested self-exclusion across its enterprise in order to implement corporate policies that extend self-exclusion to multiple or all of the jurisdictions where it operates, inclusive of online sports betting or igaming sites. Language indicating that permit holders may enforce this option should be included in the self-exclusion request form and acknowledgment statement that self-excluded individuals in Virginia are required to sign.
11VAC 5-70 – Sports Betting
11VAC 5-70-10. Definitions
The definition of “sports betting” should eliminate the language prohibiting “placing a wager on sports events organized by the International Olympic Committee.” A prohibition on betting on Olympic sports is not contained in the Virginia sports betting statute, and there is no valid public policy objective that is served by this prohibition. Its imposition simply channels wagering activity on Olympic sports to other states where such betting is permitted or to illegal bookmakers, defeating the fundamental purpose of legalized sports wagering in increasing transparency of such activity and affording it consumer protections.
Language should be added to the definitions of “sports event” and “sporting events” providing additional flexibility, such as “or other competitive events or contests on which betting has approved by the Department.”
Also, the definition of “Sports betting employee” should be restated to mean “an individual who does not meet the definition of Principal and works within the borders of the Commonwealth for a permit holder, sports betting supplier, or vendor of non-management support services such as software or hardware maintenance, provision of products, services, information or assets, directly or indirectly, to the permit holder, in each case having the power to exercise a significant influence over decisions concerning any part of the operation of sports betting, including but not limited to the sports betting platform or any components thereof.” This definition would more closely track “key employee” and similar terms used in other jurisdictions to denote those employees who warrant licensing and exclude employees who have no role or involvement in the regulated wagering activity.
11VAC 5-70-20 Application Process
There is a typographical error in the draft regulation, with two section E.5’s. The second should be renumbered as E.6.
We also suggest the addition of a new E.7, which would state: “Upon final action on an application for which administrative costs were assessed to the applicant, the Director shall give to the applicant an itemized accounting of the costs incurred.” This type of provision is not uncommon in state gaming regulation.
11VAC 5-70-60 Sports betting permit applications
Section T.5. requires the Department to consider in awarding a permit “The amount of adjusted gross revenue and associated tax revenue that an applicant is expected to generate.” Given the uncertainty at the time of permit application concerning how many permits will be awarded, it will be difficult if not impossible for both applicants and the Department to make precise revenue estimates for an individual prospective permit holder. We recommend that Section T.5. be eliminated. The requirement in Section T.2. requiring the Department to consider “success with sports betting in other states” is appropriate, combined with what we would propose as an additional requirement that the Department consider “the business plan of an applicant to maximize adjusted gross revenue and associated tax revenue.”
11VAC 5-80 -- Sports Betting Consumer Protection Program
11VAC 5-80-10 Definitions
The definition of “sports betting” should eliminate the language prohibiting “placing a wager on sports events organized by the International Olympic Committee.” A prohibition on betting on Olympic sports is not contained in the Virginia sports betting statute, and there is no valid public policy objective that is served by this prohibition. its imposition simply channels wagering activity on Olympic sports to other states where such betting is permitted or to illegal bookmakers, defeating the fundamental purpose of legalized sports wagering in increasing transparency of such activity and affording it consumer protections.
11VAC 5-80-20 Sports bettors’ bill of rights
The language in Section C.1. requiring that information related to “the handle of the bet” and “the information used to calculate those odds” be provided should be eliminated. Knowing “the handle of the bet” does not provide any information relevant to making informed decisions about gambling and would be considered proprietary information. No jurisdiction we are aware of has such a requirement. Furthermore, a requirement to provide “information used to calculate those odds” is impossibly cumbersome and similarly involves disclosure of proprietary information. While it may be appropriate for permit holders to provide information generally on how odds are set, this information should be part of general consumer education and not made specific to particular contests or betting opportunities.
Lastly, the requirement to publish “the odds of winning the bet” also should be removed. It is unnecessary and potentially confusing. Sports bets “odds” are reflected in the “line” offered, which is an intrinsic aspect of the bet. Put another way, the terms of the bet are, in fact, the “odds.” There can be no bet without the “odds” associated with it. To the extent that is all that the language is intended to encompass, it is not needed. If something more is intended, the language needs to be clarified to identify precisely what that would be and to explain why it would be useful or necessary.
11VAC 5-80-50 Underage betting
Item A.1 - 1. Providing a verification form to be signed by the individual and returned to the permit holder by postal mail, facsimile, or electronic scan; should be expanded, or an item 6. added, to be able to verify their identity via an online “Know Your Customer” (KYC) process. This would mimic existing registration and identity verification procedures for mobile casino/sportsbook/poker in IN, NV, NJ, PA, etc.
Item C. C. A permit holder shall make available, prominently publish, and facilitate parental control procedures to allow parents or guardians to exclude minors from access to any sports betting platform. Strike or amend for clarity. It is unclear how this could be reasonably set up in practice. If the KYC identify verification is in place, this would be moot. A minor would fail KYC using their correct identity information. If they intended unauthorized use (i.e., pretending to be the parent), they would have to know their SSN.
11VAC 5-80-80 Corporate responsible gambling policies
Item B. 3. Senior executive staff members are accountable for responsible gambling policies and programs -- We recommend striking, modifying, or giving a detailed explanation of “accountable” - is this simply a matter of ensuring that permit holders have policies in place? Or does the Department contemplate seeking damages if an excluded player continues to wager due to a platform malfunction, for example?
11VAC 5-80-90 Sports betting platform features
Item 2. (“Ample opportunities for a player to take note of the passage of time”). Should be deleted. The vast majority of customers will access the platform through a mobile device or computer that already provides “ample opportunities for a player to take note of the passage of time.” This should not be a required feature of a sports betting platform.
Item 3 (“Game designs that promote breaks in play and avoidance of excessive play”) should be replaced with language indicating that sports betting platforms must incorporate opportunities for players to choose “cooling off” or other time limits and set limits on deposits/wagers. These features should not be considered “game designs.”
Item 4 (“All new games and technology are screened for adherence to responsible gaming standards”) should be eliminated. The Department should have the authority to determine if games or technologies are inappropriate for responsible gaming-related reasons, but a blanket requirement for each permit holder to screen “all new games and technology” is over-broad and over-burdensome.
11 VAC 5-80-120 Protections for at-risk or problem bettors
Section 3., in reference to third-party requests for exclusion, should be modified to require permit holders to “evaluate” third party requests, not to blanket “honor” them. We understand how problem gambling affects individuals beyond gamblers themselves, and we understand the difficulties it can specifically cause for family members. But giving third parties broad authority to exclude or set limits for others will undoubtedly be misused. A more reasonable approach would be to identify the kinds of considerations permit holders should use in evaluating third party requests, and require permit holders to periodically report to the Department the results of these evaluations. Ultimately, the decision to gamble or not gamble, or how much or how little to gamble, is the responsibility of the gambler. Indeed, taking personal responsibility for one’s own gambling decisions is a hallmark of both healthy play as well as recovery from a gambling problem. We are aware of no jurisdiction in the United States that addresses third party exclusion requests in the way contemplated in these draft regulations.
11 VAC 5-80-150 Advertising in general
The language in ALLCAPS should be added to Section B: “Incidental depiction of nonfeatured minors OR STUDENTS shall not be deemed a violation of this subsection.”
The following language in Section E. should be eliminated: “If an advertisement is not of sufficient size or duration to reasonably permit inclusion of such information, that advertisement shall refer to a website, application, or telephone hotline that does prominently include such information.” The preceding sentence provides necessary guidance on responsible gaming taglines/captions.
VIRGINIA SPORTS BETTORS’ BILL OF RIGHTS
Language requiring that information related to “the handle of the bet” and “the information used to calculate those odds” be provided should be eliminated. Knowing “the handle of the bet” does not provide any information relevant to making informed decisions about gambling and would be considered proprietary information. No jurisdiction we are aware of has such a requirement. Furthermore, a requirement to provide “information used to calculate those odds” is impossibly cumbersome and similarly involves disclosure of proprietary information. While it may be appropriate for permit holders to provide information generally on how odds are set, this information should be part of general consumer education and not made specific to particular contests or betting opportunities.
Section 58.1-4045 of the Virginia Code authorizes the Lottery Board to “promulgate rules authorizing permit holders to offset loss and manage risk, directly or with a third party approved by the Director, through the use of a liquidity pool in Virginia or another jurisdiction so long as such permit holder, or an affiliate of such permit holder, is licensed by such jurisdiction to operate a sports betting business. However, a permit holder's use of a liquidity pool shall not eliminate its duty to ensure that it has sufficient funds available to pay bettors.”
We respectfully request that the regulations be amended to add a provision to accomplish the foregoing, along the following lines:
“A permit-holder may share in a liquidity pool with one or more affiliates of the permit-holder licensed to accept sports wagers in other jurisdictions so long as those affiliates remain licensed in good standing in those jurisdictions; provided that the use by the permit-holder of such liquidity pool shall not eliminate its duty to ensure that is has sufficient funds available to pay its sports bettors.”