PLEASE NOTE text in underlined bold denotes an insertion and text between [brackets] denotes a deletion.
11 VAC 5-70-250 Reporting Requirements
B. A permit holder shall [immediately] report to the Director quarterly any information relating to:
DraftKings respectfully requests permit holders be able to provide the information found in 11 VAC 5-70-250 B. on a quarterly basis to align with other record keeping requirements permit holders face in other jurisdictions and at the federal level.
2. Potential purchase or sale, transfer, assignment, gift or donation, or other disposal or acquisition of 5% or more ownership in the permit holder, with an acknowledgment that the transaction may require an application and findings of suitability and may not occur until advance approval is given by the Director, unless the ownership is of a publicly-traded entity not otherwise considered a change in control[, until advance approval is given by the Director]; and
DraftKings respectfully requests the above minor changes in order to clarify that advance approval is not required for publicly-traded entities unless it is considered a change in control. As written, the language is not explicit and we believe these changes capture the Department’s regulatory intent.
11 VAC 5-70-260 House Rules
[D. House rules shall put players on notice that wagers are subject to AML standards, including triggers and requirements for filing of currency transaction reports and suspicious activity reports.]
While this is an important notice for operators to provide to users, DraftKings respectfully submits that this subject is more appropriately addressed in an operator’s Terms of Use and Internal Controls rather in the House Rules, which address the rules governing wagers.
E. House rules shall [include minimum and maximum wager as approved by the Director] disclose the operator’s ability to limit the maximum bet amount.
Rather than specifying fixed amounts for minimum or maximum wagers, DraftKings respectfully suggests that the House Rules should disclose the operator’s ability to limit the maximum bet amount. This allows operators the set appropriate limits while providing flexibility to appropriately tailor limitations.
F. House rules shall be [conspicuously accessible] readily available on the permit holder’s websites and mobile applications.
DraftKings respectfully suggests this change to conform with the language regarding the availability of House Rules used in the sports betting platform requirements of 11 VAC 5-70-270 E.
11 VAC 5-70-270 Sports Betting Platform Requirements
B. Before a permit holder is issued its permit, all equipment and software used in conjunction with its operation shall be submitted to an independent testing laboratory approved by the Director. The Department may permit the use of any system that has been previously tested and approved for operation in another jurisdiction by an independent testing laboratory approved by the Director, pending receipt of the Virginia test results.
DraftKings respectfully requests additional information on the approval process for independent testing laboratories and whether the Department maintains a list of approved labs that can be shared with potential applicants. Furthermore, DraftKings respectfully suggests adding language to clarify that a permit can be granted before the test results are received as long as the system has been certified by an approved lab for use in another state.
C. [A sports betting platform submitted] The submission to an independent testing laboratory shall contain a:
1. Complete, comprehensive, technically accurate description and explanation of the sports betting platform;
2. Detailed operating procedures of the sports betting platform;
3. Description of the risk management framework, including, but not limited to:….
DraftKings respectfully requests this change to reflect that the listed information must be submitted to the independent testing laboratory to describe the features of the software and equipment but that the descriptions themselves need not be featured on the sports wagering platform.
D. Upon request, a [A] permit holder shall provide the Director with [remote, read only, real time access to the sports betting platform] relevant reports and documentation that shall include, at a minimum:
DraftKings respectfully requests this change that will satisfy the important purpose of sharing integrity monitoring information with the Director, while maintaining system security by not providing direct access to an entire system. The cost to the operator for providing third party access to its systems is not outweighed by the benefit to the Lottery when the information can be transmitted in an alternative, more secure manner.
H. A sports betting platform that offers live betting shall be capable of:
2. Notifying a player of any change in odds that is not beneficial to the player [after a wager is attempted] while the wager is selected but before it is placed;
DraftKings respectfully suggests providing additional specificity regarding when this requirement is triggered. The term “after a wager is attempted” is vague in this context, so we suggest clarifying that players must be notified of the change while the wager is selected but before it is placed.
K. Unless approved in advance by the Director. a permit holder or a supplier providing a permit holder’s sports betting platform may not rescind a wager posted in the sports betting platform. Notwithstanding this provision, a permit holder or supplier providing a permit holder’s sports betting platform may rescind posted wagers and cancel or void pending wagers in the event of obvious error as defined by the permit holder’s house rules. Obvious errors include, but are not limited to:
1) The wager was placed with incorrect odds;
2) Human error in the placement of the wager;
3) The ticket does not correctly reflect the wager; or
4) Equipment failure rendering a ticket unreadable
DraftKings respectfully requests additional detail on this provision, specifically as to how the Lottery views rescinded wagers as distinct from void or cancelled wagers, which appear to be permitted without advance approval except in the case of suspicious wagering activity. Furthermore, DraftKings respectfully requests that permit holders be able rescind, cancel, and void wagers due to obvious error, a concept provided for in the regulations of numerous sports betting states including Illinois, Indiana, and Colorado.
L. A sports betting platform shall prevent past posting of wagers and the voiding and cancellation of wagers after the outcome of an event is known, except as provided by in the permit holder’s house rules.
DraftKings respectfully submits that this provision should be amended to allow for the cancellation and voiding of wagers pursuant to the terms of the operator’s house rules. The regulations allow for voided and cancelled wagers in certain circumstances, for instance in the event of suspicious activity, and house rules must be approved by the Director in advance, thereby eliminating any concern that a permit holder would void or cancel wagers arbitrarily or unreasonably.
M. If a player has a pending wager and the player subsequently self-excludes, the wager may settle [shall be cancelled] and the funds and account balance shall be returned to the player in accordance with the permit holder’s internal controls.
Consistent with our comment to 11 VAC 5-60-40 A 3, DraftKings respectfully suggests modifying this provision in order to allow an individual’s outstanding bets to settle after they have been added to the self-exclusion list. Self-exclusion addresses responsible gaming concerns and protects consumers by ensuring that they cannot place any additional bets, however a requirement to cancel outstanding bets could allow individuals to exploit this provision by self-excluding not due to responsible gaming concerns, but to avoid a negative outcome on a bet.
Q. A permit holder and a supplier providing a permit holder’s sports betting platform shall [grant] provide the Director [access] with relevant information and documentation related to wagering systems, transactions, and related data as deemed necessary and in the manner required by the Director.
R. A sports betting [platform] permit holder shall provide a [mechanism for the Director] process to query and export, in the format required by the Director, all sports betting platform data.
While DraftKings recognizes the importance of the Lottery’s ability to regulate sports gaming systems of an operator, we believe the changes proposed above provide a better way to satisfy the underlying regulatory intent of this requirement. By providing a process where the Lottery can request necessary data without having direct access to the sports gaming system to generate the report, an operator maintains system security. The cost to the operator for providing third party access to its systems is not outweighed by the benefit to the Lottery.