DraftKings Comments on 11 VAC 5-70 Sports Betting (Sections 170-220)
PLEASE NOTE text in underlined bold denotes an insertion and text between [brackets] denotes a deletion.
11 VAC 5-70-170 Permissible Wagers
A permit holder may accept a wager from a player on sporting events, including:
B. A bet placed before or after the sporting event has started; or
DraftKings respectfully requests the above modification be adopted to clarify that permit holders may accept bets on events before and after a sporting event has started as authorized by Article 2 of the Virginia Lottery Act.
11 VAC 5-70-180 Requests from Sports Governing Bodies
3. If the Director grants the request, the Board shall promulgate by regulation such restrictions, limitations, or prohibitions as appropriate.
DraftKings respectfully requests clarification on the above requirement, as it is our understanding that the restrictions, limitations, or prohibitions should be included in the draft regulations out for comment.
11 VAC 5-70-190 Use of Official League Data
F. Subsection E. shall not apply if:
2. A permit holder demonstrates to the Director that a sports governing body has not provided or offered to provide a feed of official league data to the permit holder on commercially reasonable terms.[, by providing the Director with sufficient information to show] The following is a non-exclusive list of factors the Director may consider in evaluating whether official league data is being offered on commercially reasonable terms and conditions for this subsection:
a. The availability of a sports governing body's official league data for such bets from more than one authorized source;
b. Market information regarding the purchase, in Virginia and in other states, by permit holders of comparable data for the purposes of settling wagers [from all authorized sources];
c. The nature and quantity of the data, including the quality and complexity of the process used for collecting the data; [and]
d. The extent to which a sports governing body has made data used to settle bets placed after a sporting event has started or bets available to permit holders and any terms and conditions relating to the use of that data; and
e[d]. Any other information the Director requires.
DraftKings respectfully requests the above modifications be adopted in order to consider when determining whether the terms of a contract or offer are commercially reasonable. The added language is based on Michigan’s Lawful Sports Betting Act that passed in late 2019.
G. Until a sports governing body is able to provide a feed of official league data on commercially reasonable terms, or w[W]hile the Director is considering whether official league data is available on commercially reasonable terms pursuant to this section, a permit holder may use any data source for determining the results of bets placed after a sporting event has started.
DraftKings respectfully requests the above modifications be adopted to clarify that a permit holder shall be able to use any data source until a sports governing body is able to: 1) provide a feed of official league data; and 2) provide a feed of official league data on commercially reasonable terms. We believe this requested change is also consistent 11 VAC 5-70-190 F.
11 VAC 5-70-200 System Integrity and Security Assessment
A. Before beginning operations and annually thereafter, the permit holder shall engage an independent testing laboratory or an independent firm [professional] approved by the Director to perform a system integrity and security assessment of its sports betting operations.
DraftKings respectfully requests amending the above requirement for how the Department interprets an “independent professional” to include an independent testing laboratory and an independent firm. For example, Tennessee recently amended their sports gaming regulations (see Rule 15.1.5.C.2) in order to clarify this provision as they recognized the range of professionals that sports betting operators hire to perform system integrity and security assessments, and we support that language in order to provide permit holders flexibility while still providing the Department control through the Director’s approval authority.
C. The independent [professional] testing laboratory or an independent firm shall issue a report on its assessment and submit it to the Director. The report shall include, at a minimum, the:
In order to align with our comments to 11 VAC 5-70-200 A., DraftKings respectfully requests the above modifications.
11 VAC 5-70-210 Minors and Prohibited Players
A. A permit holder shall make commercially reasonable efforts to prohibit a minor from creating a sports betting account [may not permit wagers to be placed by minors] and shall maintain a system approved by the Director through which it verifies that accounts [wagers] are not made by minors.
B. A permit holder shall submit to the Director for approval its methodology for verifying the age of an individual who wishes to create a sports betting account to place a wager on a sporting event, and shall notify the Director before making changes to its methodology or replacing a sports betting supplier or vendor who provides age verification services for the permit holder.
C. A permit holder shall prevent a known minor from collecting payouts or winnings from its sports betting operation.
DraftKings respectfully requests the above modifications be adopted to focus on prohibiting minors from creating accounts. Age and identification verification is a cornerstone of the regulated sports betting industry and something sports betting operators ensure works. The best way to stop minors from wagering is to stop them from creating accounts. Based on our proposed changes to 11 VAC 5-80-50 B., DraftKings respectfully requests subsection C is amended to clarify that permit holders shall prevent a known minor from collecting payouts or winnings.
D. A permit holder shall confidentially maintain the list provided by the Director of prohibited individuals and make commercially reasonable efforts to prevent them from placing wagers with the permit holder. A permit holder shall maintain a system approved by the Director through which the permit holder verifies that wagers are not placed by such prohibited individuals.
DraftKings respectfully requests the above modifications be made to ensure permit holders are not held liable if they make commercially reasonable efforts to prevent prohibited persons from wagering. Adding this language clarifies that permit holders are responsible for prohibiting individuals on the list provided by the Director from placing wagers.
F. A permit holder shall make commercially reasonable efforts to prohibit an individual who is barred by the sports betting law from placing a wager on a sporting event from collecting payouts or winnings from its sport betting operation.
For similar reasons to our comments above for 11 VAC 5-70-210 D, DraftKings respectfully requests the above modification is made to ensure permit holders are not held liable if they make commercially reasonable efforts to prevent prohibited persons from collecting payouts or winnings.
11 VAC 5-70-220 Integrity Monitoring
A. A permit holder shall maintain membership in the Global Lottery Monitoring System (GLMS), the Sports Wagering Integrity Monitoring Service (SWIMA), or other integrity monitoring association or contract with an integrity monitoring system provider as approved by the Department.
DraftKings respectfully requests clarification on the process for other integrity monitoring associations or integrity monitoring system providers to be approved. Sports betting operators prioritize integrity monitoring as a top concern to their operations. Further, sports betting operators have relationships with integrity monitoring associations experienced in U.S. jurisdictions, like the Sports Wagering Integrity Monitoring Association (SWIMA). Allowing operators to work with integrity monitoring associations with which they have a pre-existing relationship could shorten the timeline required to launch sports wagering in Virginia. We respectfully request that SWIMA be specifically names in the regulations as an approved integrity monitoring association since it is widely used in the industry and the group is already familiar with requirements in regulated jurisdictions in the U.S. and has existing relationships with the major American sports leagues.
C. A permit holder shall ensure that its integrity monitoring system procedures provide for the sharing of information with each other permit holder.
DraftKings respectfully requests clarification that a permit holder may document procedures for how its integrity monitoring association or integrity monitoring system provider share the required information with other permit holders and that responsibility is not required to be shared directly by a permit holder. Integrity monitoring associations and system providers are better suited to share information with other permit holders than individual operators.
D. A permit holder shall review information and reports from other permit holders and, as approved by the Director, notify other permit holders of any similar activity. A permit holder shall comply with the specific reporting requirements designated in its MICS.
Similar to our comments to 11 VAC 5-70-220 C., DraftKings respectfully requests clarification that a permit holder may use an integrity monitoring association or system provider to share information and notify other permit holders, as integrity monitoring associations and system providers are better suited to perform this function.
H. A permit holder’s integrity monitoring system shall be accessible to the Director [via remote access and shall] and produce relevant reports and documentation, at a minimum:
DraftKings respectfully requests the above modifications to specify the types of information that must be accessible to the Department. These changes will satisfy the important purpose of sharing integrity monitoring information with the Department, while maintaining system security by not providing direct access to an entire system. The cost to the permit holder for providing third party access to its systems is not outweighed by the benefit to the Department when the information can be transmitted in an alternative, more secure manner.