11 VAC 5-70-190. Use of Official League Data.
This Section provides for the process by which a sports governing body may request that a permit holder use “official league data” to settle bets placed on their sporting events after the sporting event has begun, otherwise known as “in-play” or “tier 2” bets. While the provisions of this Section generally mirror that of § 58.1-4036 of the Code of Virginia, Subsection (B) and Subdivision (2) of Subsection (F) of this section can be improved to more clearly conform with these provisions.
To address the concern raised above, we suggest the following changes to 11 VAC 5-70-190:
“B. Unless a sports governing body, pursuant to this section, has requested that permit holders use official league data to settle bets placed after a sporting event overseen by that sports governing body has started, a permit holder may use any data source for determining the result of a wager placed after a sporting event overseen by that sports governing body has started.
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F. Subsection E. shall not apply if:
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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. In reviewing information provided by the permit holder, [by providing] the Director [with sufficient information to show] shall consider: …”
11 VAC 5-70-200. System Integrity and Security Assessment
Subsection (A) of this section provides the requirements for permit holders to engage an independent professional to perform a system integrity and security assessment. The draft regulations require such an assessment prior to commencing operations and annually thereafter. Many, if not most of the likely applicants for sports betting permits in Virginia operate in other states and their systems have already gone through such a review. Requiring this review be conducted prior to the launch of sports betting will unnecessarily slow down the “go live” process for Virginia. Other states, including Colorado and Indiana, have recognized this and required such an assessment to be conducted within 90 days of commencing operations to ensure that the assessment is conducted timely without delaying the launch of sport wagering.
To address the concern raised above, we suggest the following change to 11 VAC 5-70-200(A):
“A. [Before beginning] Within ninety (90) days of commencing operations and annually thereafter, the permit holder shall engage an independent professional approved by the Director to perform a system integrity and security assessment of its sports betting operations.”
11 VAC 5-70-210. Minors and Prohibited Players.
This section outlines the requirements that permit holders must comply with to prevent minors and prohibited players from placing wagers. Subsection (F) of this section provides that permit holders “shall 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 sports betting operations.” §58.1-4041(C) of the Code of Virginia prohibits several groups of individuals associated with sporting events from wagering on sporting events they are associated with, but does not issue a blanket prohibition on their engaging in sports wagering. To improve the ability of permit holders to comply with the provisions of this section as it relates to individuals prohibited from specific wagers under §58.1-4041(C) of the Code, they should be able to utilize a customer attestation that they are not a prohibited individual.
To address the concern raised above, we suggest adding a new Subsection (G) to 11 VAC 5-70-210:
“G. For purposes of complying with the provisions of this section, in relation to the requirement of a permit holder to prevent individuals who are prohibited from placing sports wagers pursuant to §58.1-4041(C) of the Code of Virginia, the requirements of this section shall be satisfied by the use of a customer attestation that they are not a prohibited individual at the time of account creation.”
11 VAC 5-70-220. Integrity Monitoring.
This section outlines the requirements permit holders must comply with in relation to integrity monitoring, including a requirement in Subsection (H) that permit holders must provide the Director of the Lottery with remote access to their integrity monitoring system. This requirement for remote access to a permit holder’s integrity monitoring system is not included in the regulations of other states, nor is it made available by independent integrity monitoring providers. Additionally, this requirement is duplicative as permit holders are already required to immediately notify the Director of suspicious wagering activity under 11 VAC 5-70-220(E). However, we understand the need for the Director to receive regular reports of suspicious or unusual activity and the provisions of Subsection (H) should be amended to ensure such reports are provided.
To address the concerns raised above, we suggest the following changes to 11 VAC 5-70-220(H):
“H. A permit holder’s integrity monitoring system shall [be accessible to the] provide the Director [via remote access and shall produce], at a minimum, with the following reports:…”
11 VAC 5-70-230. Investigations; Reporting.
This section provides a number of requirements on “regulated entities” in relation to reporting information and the processes by which the Director of the Lottery may conduct investigations. The provisions of this section in a number of places go beyond the statutory requirements they are derived from and should be clarified to better conform with statute. For example, the term “regulated entities” as used in this section is defined to include “a permit holder, license holder, or registrant.” However, the statutory provisions that are the genesis of the requirements of this section only apply these requirements to permit holders. This section also includes a prohibition on amateur sports which is not included in statute and should be removed. Finally, there are a number of minor changes needed to conform the provisions of this section to relevant provisions of statute and clarify the standard for “real-time” data sharing.
To address the concerns raised above, we suggest the following changes to 11 VAC 5-70-230:
“A. In this section “regulated entity” means a person or individual who is a permit holder or licensed sports betting supplier or operates a sports betting platform on behalf of a permit holder [, license holder, or registrant].
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F. A regulated entity shall maintain all records relating to the conduct of its sports betting operations in the Commonwealth of Virginia for a period of at least [five] three years.
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G. The Director may investigate the possibility of any of the following activities:
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8. Offering or accepting a wager on [amateur or other] sporting events not approved by the Director, including high school and youth league sports events;
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I. A regulated entity shall [immediately] as soon as is commercially reasonable report to the Director any information relating to:
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3. Any potential or actual breach of a sports governing body's internal rules and codes of conduct pertaining to sports betting,[ either:]
[a. Known to the regulated entity, or
b. That reasonably should have been known] to the extent that such rules and codes of conduct are provided to and known by the regulated entity;
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N. For purposes of subdivisions L and M of this section, “real-time” shall mean on a commercially reasonable periodic interval.”