91 comments
IDEA Growth is an association representing companies involved in every aspect of the on-line gaming and betting landscape. We have introduced ourselves more thoroughly in previous filings, but more information can be found on our website www.ideagrowth.org. We are grateful for this opportunity to comment on Virginia Lottery’s proposed regulations issued pursuant to Virginia’s recently enacted statue providing for sports betting within the state. While our members have opinions on many issues, as an association, we wanted to focus on five particular issues in the proposed regulations. (We will submit an additional comment on the Sports Bettors Bill of Rights under separate cover.)
11VAC5-70-60 Principal applications
(This section largely reflects comments IDEA made prior to the issuance of the draft regulations, but we feel they bear repeating.)
The regulations require that each applicant pay a non-refundable fee of $50,000 for each “principal” of an applicant with that term meaning anyone who has a 5% or greater ownership or voting share in a company that applies for a permit; who has such ownership or voting rights in a company that seeks a supplier license to operate a sports betting platform on behalf of a permit holder, or who is employed in a managerial capacity for such a permit or license applicant. This fee (in addition to the $250,000 fee due at the time the permit is issued and up to $150,000 fee for supplier licenses) is very high compared to other jurisdictions. For example, in New Jersey, a “key employee” gaming license costs $750 plus the cost of the investigation with a total cost not to exceed $4,000. Pennsylvania charges $2500 per key employee.
The term “managerial” in the statute has a narrow meaning that should be reflected in the regulations. Rather than capturing anyone who manages anyone else in the company, it should be limited only to those individuals who have ultimate accountability over the sports betting platform itself as operated in Virginia. Given the very high application cost per-principal, we would urge the Board to implement an interpretation that does not capture a wide net of sportsbook managers, but only those managers at the top of the reporting chain with ultimate accountability for the platform in Virginia.
To be clear, IDEA Growth supports background checks for additional specific employees in the Commonwealth of Virginia whose job functions allow them to directly affect certain aspects of the sports betting platforms. However, the $50,000 principal fee applies to only a very limited group of people as defined by statute, and given the disproportionate nature of the fee, we would urge that the regulations interpret the term “principal” narrowly.
11VAC5-70-100 Bonds and 11VAC5-70-140 Reserve and Insurance Requirements
Another area of concern for IDEA’s members is the number of bonds and insurance policies that the proposed regulations require and the size of those bonds and insurance policies. As we understand it a permit holder would have to have the following:
To be clear, all of this is on top of the requirement that permit holders have on hand at all times reserves or cash equivalents equal to the amount contained in all player accounts, unpaid winnings, etc. Further, it seems that the bonds are optional and only required at the discretion of the Director but the regulations do not elaborate and what factors impact the Director’s decision to require a bond or not, and how much that bond would be.
We are aware of no other state with such extensive requirements. Most operators will have very little physical footprint in the state, so it is not clear what the general commercial liability insurance is intended to protect against. Generally, such bonds and insurance policies are meant to protect against the possibility that an operator might become insolvent and not be able to pay players, but again, the proposed regulations already have pretty extensive capitalization requirements separate and apart from the bond and insurance requirements, and permit holders are selected in part based on their financial viability. We believe these requirements are excessive and we respectfully request that they be scaled back or removed if an operator demonstrates sufficient solvency and financial integrity and stability.
11VAC5-70-240. Advertising and Marketing.
We ask that you modify the advertising provision (VAC5-70-240 (A) (B)) that requires licensed permit holders, supplier and vendors to provide all advertising and marketing materials to the Director for review and approval prior to public dissemination. The nature of advertising for mobile betting products means that operators must be dynamic and quickly adapt to betting events and be able to market new odds, offers and bonuses in real-time to potential customers.
While the Virginia Lottery and the operators themselves have an interest in promoting responsible advertising this mandate will place an onerous and unnecessary burden on the Lottery without providing a benefit to consumers and could actually negatively impact the health and confidence in regulated sports betting in Virginia. With potentially more than a dozen authorized permit holders operating in the state simultaneously, the Lottery will be put under tremendous pressure to quickly review and approve dozens of ads or promotions that will be submitted on a near daily basis. This will be magnified during the sporting calendar playoff seasons when team match-ups change on a regular basis without a significant amount of lead time for review and approval by the Lottery to allow for the marketing to have any meaningful impact.
The current NBA playoffs illustrate a perfect example of this challenge. Generally, there is only a few days between the end of one playoff series and the beginning of the next, and the results are not predictable. For instance, in the evening of Sunday, August 23rd, two teams advanced to the 2nd round in the Eastern Conference Playoffs and they are scheduled to play just 4 days later on August 27th. Operators will already be working on a condensed schedule to create their marketing and promotional materials and an additional layer of regulatory review before their advertising can reach the public could significantly undermine the effectiveness of the marketing. This is further complicated by the fact that often times injuries or changes in starting players in any sport can often drastically change offerings which could impact marketing and promotions.
Instead, the Virginia Lottery should rely on the code of conduct for operator advertising, such as those already prescribed in VAC5-70-240 and require that operators conform their material to meet the prescribed standards and maintain records of advertising to be made available to the Virginia Lottery upon request.
With respect to the standard outlined in the draft regulations one area of particular concern is with VAC5-70-240 (I) which prohibits permit holders from advertising “in a media outlet (including social media) that appeal primarily to those under the age of 21.” This draft regulation would likely curtail advertising on social media, even if the ads appropriately target users who are of the legal age to wager on sports. Social media outlets are critical to reaching adult audiences, as the majority of adults use a variety of platforms on a regular basis.
Similarly, we are concerned that VAC5-70-240 (Q) that requires that advertising “shall reflect generally accepted contemporary standards of good taste,” is entirely subjective measurements and without clear guidance it will extremely difficult for a permit holder to comply or for the Virginia Lottery to enforce this standard. Also subjective is the prohibition on “saturation” in VAC5-70-240 (K), which imposes vague and problematic restrictions on permit holders’ commercial speech.
Combined, these requirements could severely impact permit holders’ ability to reach their potential legal customers. Cutting off key advertising media would drastically reduce the ability for legal operators to draw customers to their sports wagering websites and applications, especially as they are competing with illegal, offshore operators that do not abide by state laws or social media policies.
11VAC5-70-210. Minors and Prohibited Players.
Based on the statute, Section 58.1-4041 (C) mandates that permit holders are required to block “Any competitor, coach, trainer, employee, or owner of a team in a professional or college sports event, or any referee for a professional or college sports event …” The statute goes on to say that, “In determining which persons are prohibited from placing wagers under this subsection, a permit holder shall use publicly available information and any lists of persons that a sports governing body may provide to the Department.”
Unfortunately, there is no mandate in statute or in the proposed regulation that a sports governing body must provide a list of prohibited players that abides by their code of conduct. Further, if a sports governing body does provide a list, then there is no requirement that those lists include personal identifiable information (PII), such as a Social Security Number and date of birth, which would be necessary information for a permit holder to have in order to block a “prohibited player.” In the absence of PII or prohibited players provided by the sports governing body the onus is on the permit holder to use “publicly available information” to determine who should be prohibited.
Under the current draft of the regulations it is unclear what an operator should do if a customer by the name of “Alex Smith” attempted to create an account. It is impossible for an operator to determine if that customer is the quarterback of the Washington professional football team, or simply shares the same name without having PII that answers that question. Furthermore, the only entity that clearly knows what the various codes of conduct require are the organizations themselves. An operator does not know if a particular league’s code of conduct forbids any sports wagering or simply wagering on that player or coach’s sport.
Given that the statute requires a permit holder to prohibit competitors, coaches, officials etc., the regulations should similarly require that sports governing bodies submit to the Director a list of prohibited players and mandate that PII be included so that the Director may disseminate those lists and permit holders can reasonably make informed decisions about which players to prohibit from establishing accounts and placing wagers. Following this approach would not be without precedent as that is the regulatory approach that was taken in Colorado after extensive discussions with operators and leagues.
Without the necessary information, provided from the sports leagues and given to the Director to share with permit holders, it would almost impossible to expect operators to be able to successfully block all prohibited players, even as they would be subject to penalties for failing to do so. Ultimately, the sports governing bodies have all of the information necessary to enforce this provision and they should be required to share the names and PII of “prohibited players” with the Virginia Lottery.
11VAC5-70-230. Investigations; Reporting.
iDEA Growth submits that there is no benefit to the integrity of sports to require permit holders to share in “real-time” information about wagers directly with respective sports governing bodies and we urge the Lottery to serve as a gatekeeper of this sensitive information and share it accordingly.
The integrity of legal sports betting has historically been placed in the hands of a state enforcement regulator, coupled with the mandated cooperation of the licensed operator and, when necessary, state and federal law enforcement. Virginia’s proposed regulations already contain robust provisions related to integrity monitoring (11VAC5-70-220) and even require that permit holders “maintain membership in the Global Lottery Monitoring System (GLMS) or other integrity monitoring association or contract with an integrity monitoring system provider as approved by the Department.”
The industry dedicates a significant amount of resources to protecting the integrity of their wagering markets, but also to monitoring the events themselves to ensure integrity of the sport is safeguarded. Some operators conduct this type of integrity monitoring in-house with teams of sophisticated analysts, and operators also work with certified (and licensed) third-parties to provide comprehensive integrity services. Moreover, most U.S. regulated sports betting operators are already members of the Sports Wagering Integrity Monitoring Association (SWIMA), which works with US (and global) regulators to report fraud and other illegal or unethical activity related to betting on sporting events in the United States.
As has been proven in sports wagering markets across the United States, the regulated entities working with state regulators, law enforcement and independent integrity monitors are in the best position to ensure sports wagering integrity. Thusly requiring that permit holders share this information (even in an anonymized fashion) directly with a sports governing body is unnecessary; creates data privacy concerns and most importantly, will not have any meaningful impact on sports wagering integrity. To be clear, sports governing bodies, can and should play a role in investigating suspicious activity, but only when it is based on the judgement and recommendation of the Virginia Lottery and/or law enforcement and when the information is shared by those entities, not from the licensed permit holders.
Thank you for your consideration.
J. Daniel Walsh
Farragut Partners
On behalf of IDEA Growth
IDEA Growth would like to submit the following comment regarding the proposed “Sports bettors’ bill of rights.”
11VAC5-80-20 Sports bettors' bill of rights
IDEA Growth’s members are concerned about Section C of the sports bettors’ bill of rights. This provision would require the permit holder to display the handle for each particular bet; the odds of winning; how those odds are calculated; the payout amounts and the schedule of payouts. These provisions seem a bit out of place in the context of sports betting; rather they seem better suited to house-banked games of chance, pari-mutuel horse racing, or else a lottery. Handle is relevant to pari-mutuel wagering pools where the handle wagered on each outcome directly affects the payout odds, whereas that is not the case in sports betting. Lotteries can publish the payout on any particular drawing and the odds of winning because there are only so many possible combinations of outcomes, and a casino can do the same for a slot machine, however that is again not the case in sports betting. Requiring operators to disclose handle for a particular football game would disclose commercially sensitive and potentially proprietary information without actually giving the customer any information that would help inform their decision to place a wager or not.
Providing this information is problematic in the context of sports betting. With respect to wagers that have odds, the odds are generally set to try to balance the amount of money bet on each side of any particular event, such that the players are betting against each other rather than “the house.” Operators’ methods of accomplishing this are proprietary and they provide no useful information to the players.
If the player is to be provided the amount of the handle at the time he or she places the bet, this would have to be accomplished through a continuously updated meter that would display in the betting app. This would require operators to be continuously updating those totals in real time on hundreds or thousands of events (particularly with respect to in-game bets and proposition bets). This would be enormously difficult information for operators to provide; it would significantly clutter and confuse the user interface, and it would be of little or no use to the overwhelming majority of players. No other state has adopted these sorts of requirements, and we are aware of no foreign regulatory regime that includes such provisions.
IDEA Growth’s members support transparency with respect to players with respect to non-proprietary information that players can use, but they do not believe the disclosures required in Section C meet that standard and we respectfully request that they be modified or removed.
Furthermore, iDEA Growth’s members are concerned with Section B’s restriction on the use of alternative dispute resolution measures. Provisions mandating the use of measures short of litigation as an initial step to resolving disputes are commonly employed by businesses in a wide variety of industries including gaming and sports betting. To deny permit holders the use of these tools will lead to additional expense that ultimately gets passed on to consumers. Virginia law provides for the use of arbitration and other alternative dispute resolution procedures and the General Assembly did not choose to limit their use in the sports betting law. For that reason, iDEA supports the restrictions on alternative dispute resolution being struck from the regulations.
A mail-in option for physical sports betting tickets is crucial for the industry and the host state’s market. A mail-in option provides an additional redemption option for sports bettors, and encourages bettors to place additional wagers without having to be present to cash their wagers. Many sports bettors take a yearly trip to Las Vegas to place futures wagers. Without a mail-in option in Virginia, those sports bettors will be less inclined to place wagers in person which leads to fewer trips to Virginia casinos and hotels.
Mail-in redemption is authorized in the three states with the highest grossing sports wagering revenue: New Jersey, Nevada, and Pennsylvania. The three regulations authorizing mail-in redemption are listed below:
New Jersey
N.J.A.C. 13:69N-1.9(g)(3):
(g) all tickets generated by a cashier or at a kiosk shall include the following:
3. Method of redeeming winning ticket via mail.
Nevada
Regulation 22.080(3)
3. Books shall honor winning betting tickets for 30 days after the conclusion of the event wagered upon unless a longer period is established by the book. The book shall state the redemption period on each betting ticket, in house rules and on notices conspicuously placed about the licensed premises. Payment by mail may be made only after presentment of the betting ticket and all identification information and documentation required by state or federal law, and must be made not later than 10 days after presentment. A book may accept a photocopy of a driver license or passport in lieu of an actual driver license or passport when presentment of the betting ticket is made by mail.
Pennsylvania
58 Pa. Code § 1407.6(a)(3)
(a) All tickets/vouchers generated by a self-service kiosk or by a point of sale system shall include the following general information: (3) Method of redeeming a winning ticket/voucher via mail.
Therefore, we propose Virginia adopt a regulation for a mail-in redemption option:
11VAC5-70-260. House Rules.
H. House rules shall include the procedure for redeeming a winning sports wager via physical mail. Mail-in redemption can be exercised up to one (1) year from the settlement date of the wager. The permit holder may accept a photocopy of a drivers license or passport when presentment of the betting ticket is made by mail.
DraftKings Inc. hereby submits comments on the proposed sports betting regulations issued by the Department on August 10, 2020. This submission supplements the comments submitted by DraftKings on August 25 in response to the first set of regulations issued on July 15. Thank you for your consideration.
PLEASE NOTE text in underlined bold denotes an insertion and text between [brackets] denotes a deletion.
11 VAC 5-70-10 Definitions
“Cancelled wager” means a wager that has been cancelled due to an event or circumstance that prevents the wager’s completion.
“Voided wager” means a wager voided by a permit holder for a specified sporting event.
DraftKings respectfully requests clarification for these two definitions. Throughout these draft rules, the terms are used in connection with each other, and we respectfully request the Department provide additional clarity on any differences in their use or application, as well as the term “rescinded wager” which is not defined but is used in 11 VAC 5-70-270(K) . Through the course of normal business across multiple jurisdictions, sports betting operators may use the terms interchangeably internally due to their own house rule conventions, as well as different regulatory requirements across the U.S. While the terminology may differ, the intent is the same: create a transparent process for the treatment of wagers that are invalidated. Further clarity on their meaning will assist permit holders when developing their internal controls and house rules in compliance with the requirements laid out in 11 VAC 5-70-300, 11 VAC 5-70-260 and other portions of the sports betting rules.
[“Event number” means a set of alpha and/or numeric characters that correspond to a sporting event or an event ancillary to a sporting event.]
DraftKings respectfully requests this definition be removed, as it is more appropriately applicable to traditional retail books, rather than a mobile market, and is therefore an outdated term and not the most appropriately suited for these proposed regulations.
“Prohibited individual” means any individual: (1) who is prohibited from wagering pursuant to the sports betting law; (2) whose name is on any [self-exclusion list or] Virginia Lottery self-exclusion list; [(3) whose participation may undermine the integrity of the wagering or the sporting event;] (4) who is excluded from wagering for any other good cause; or (5) who makes or attempts to make a wager as an agent or proxy on behalf of another for compensation (i.e., messenger betting).
DraftKings respectfully suggests the above modifications to clarify that the individual permit holders are responsible for preventing the placement of wagers by those who are prohibited within the Commonwealth of Virginia. Permit holders do not have access to all self-exclusion lists across all jurisdictions, and this change appropriately tailors the list of prohibited persons while being responsive to customer needs and fulfilling the consumer protection objectives of these regulations.
DraftKings seeks to remove section 3 of this definition, as it is a subjective class of individuals, which will make the list difficult to compile and disseminate among permit holders. DraftKings respectfully submits that the list of prohibited persons in the sports betting law, § 58.1-4041, adequately addresses integrity concerns by addressing athletes and others closely associated with the sporting event, and that the catch all of (4) in this definition adequately covers any other bettors excluded for cause.
DraftKings seeks to clarify that the Department will administer and disseminate master self-exclusion lists to permit holders for an accurate, comprehensive, and consistent implementation of the program in the state. Requiring each permit holder to separately compile such lists will lead to different lists of varying degrees of accuracy and comprehensiveness, potentially inviting restricted or excluded customers to seek out platforms where the operator’s commercially reasonable efforts did not result in their exclusion.
“Proposition wager” or “proposition bet” means a wager on an individual action, statistic, occurrence, or non-occurrence to be determined during a sporting event and includes any such action, statistic, occurrence or non-occurrence that does not directly affect the final outcome of the sporting event to which it relates.
DraftKings respectfully notes that the term “individual” used in this definition is itself defined in these regulations as a “human being, and not a corporation, partnership, association, trust, or other entity.” DraftKings therefore respectfully suggests that in applying the prohibition on proposition wagers to college sports, only wagers on individual athletes should be prohibited while wagers on the actions and statistics of the team as a whole should be permitted. For example, permit holders could not offer a wager on whether a specific running back has over 100 rushing yards in a college game, but could offer a wager that the whole team has over 100 rushing yards in the game.
“Sports governing body” means an organization, headquartered in the United States, that prescribes rules and enforces codes of conduct with respect to a professional sports or college sports event and the participants therein. “Sports governing body” includes a designee of the sports governing body.
DraftKings respectfully requests clarification on what constitutes a designee of a sports governing body, and whether it is considered an individual who works in an official capacity for a governing body, an official data provider, some combination of either of these possibilities, or another individual. A designee is not clearly defined and permit holders need clarity to ensure not only that they are complying with all regulations, but are dealing with the appropriate individuals to do so.
11 VAC 5-70-140 Reserve and Insurance Requirements
A. A permit holder shall maintain a reserve in the form of cash, cash equivalents, payment processors reserves, payment processors receivables, irrevocable letter of credit, or bond, or a combination thereof, in an amount approved by the Director to cover the outstanding liability of the permit holder to players. A bond used by a permit holder to maintain any portion of its reserve shall comply with the bond requirements of section 100 of this chapter. A permit holder may not remove, release, or withdraw funds from its reserves without the written approval of the Director.
DraftKings respectfully suggests the above modification to the proposed regulation. While it is critical that operators maintain a reserve to cover outstanding sports wagering liability, limiting the reserve to cash and/or a bond can place an unnecessary strain on the entity by tying up large amounts of cash that could otherwise be used for operational expenses. Bettors can be fully protected by a reserve comprising other financial instruments, as demonstrated by Nevada’s Regulation 5.225.20.(a), which allows gaming operators to use a range of financial instruments to satisfy the reserve requirement. DraftKings respectfully requests our suggested modification be adopted in order to place Virginia more in line with other regulated sports wagering jurisdictions. Further, the suggested language aligns with DraftKings’ previous comments in regards to 11 VAC 5-80-100 D.
B. 5. A permit holder shall calculate its reserve requirements each business day and, if the permit holder determines its reserve is insufficient to cover the requirement of this subsection, it shall notify the Director of the deficiency within 24 hours and identify the steps taken to remedy the deficiency.
DraftKings respectfully suggests this update to the proposed regulations to conform the regulations with regular business practices. As transfers can only be completed on a business day, a deficiency could not be rectified until a financial institution is available for business. By way of example, if there is a shortage on a Friday, Saturday or Sunday the earliest available day a transfer can be made is Monday. In the case that all three days are deficient a permit holder would be required to notify the Director three separate times, even if a resolution cannot be completed until Monday. Alternatively, a shortage may occur on a Friday or Saturday, due to a large number of wagers in anticipation of a large event on a Sunday, such as the Super Bowl, and once those wagers settle on Sunday the account is no longer deficient.
[D. A permit holder shall maintain the following types and levels of insurance:
1. General commercial liability insurance in the amount of $5,000,000;
2. Errors and omissions insurance in the amount of $15,000,000; and
3. Such other types and amounts of insurance as the Director requires.]
DraftKings respectfully requests this section be removed from the proposed regulations. DraftKings believes setting specific coverage amounts for insurance is a business decision. Only one other U.S. regulated jurisdiction’s sports wagering regulations address insurance for mobile operators, and if coverage amounts are set too high it could be prohibitive on operator’s entering the market.
If the Lottery chooses to retain insurance requirements, DraftKings respectfully suggests that the specific types of insurance required should be narrowly tailored to match the nature of the business. Section 11 VAC 5-70-140 D 1 outlines coverage requirements for General Liability Insurance, however, Virginia’s sports wagering market will be mobile and will not require the amount of General Liability Insurance a land based establishment requires because the nature of an online business is far less likely to have tortious injuries to third parties and other incidents that are more common with brick-and-mortar businesses.
A mobile sports wagering operator’s errors and omissions insurance, if required, should be at a level determined by the operator, as an operator knows its business the best. This is how other jurisdictions handle insurance for sports wagering operators. Additionally, the one regulated U.S. jurisdiction with insurance requirements for mobile operators in its sports wagering regulations—Tennessee—has a sports wagering law which specifically mandates that the regulator address insurance in the regulations, whereas Virginia’s sports wagering law does not contain a similar requirement.
11 VAC 5-70-160 Audit, Financial Record Keeping, and Banking Requirements
E. A permit holder shall deliver all relevant data requested by the Director either by report or data file in the form and frequency [required] agreed to by the Director and the permit holder in order to achieve [while achieving] compliance with the standards of integrity, security, and control.
DraftKings respectfully requests the above changes to comply with standard business practices. Compilations of large data sets may take significant time and effort to compile and this language reflects that reality while ensuring compliance with important record keeping duties. DraftKings believes this change will ensure that all relevant data is provided as requested, while ensuring that the requirements are not too onerous to cause operational issues.
K. A permit holder shall maintain [an escrow] a separate account[, designating the Department as its sole beneficiary,] with a financial institution federally insured by the FDIC and licensed to transact business in the Commonwealth of Virginia. This [escrow] account shall be separate from all other operating accounts of the permit holder to ensure the security of funds due to the Commonwealth of Virginia.
DraftKings respectfully requests this change to align Virginia’s regulations with other regulated U.S. sports wagering jurisdictions. Only one state in the country requires operators to keep funds in an escrow account for the benefit of the state. All other states have effectively administered their laws without this requirement, reducing the administrative burden for operators and resulting in no associated detrimental effects to the states’ tax collection. This small change would still hold permit holders accountable for their tax burden to the Commonwealth, while providing permit holders some flexibility as to how they fulfill that obligation.
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.
PLEASE NOTE text in underlined bold denotes an insertion and text between [brackets] denotes a deletion.
11 VAC 5-70-230 Investigations; Reporting
G. The Director may investigate the possibility of any of the following activities:...
7. Directly targeting sports betting advertisements or promotions [advertising or promoting sports betting] to minors;
DraftKings respectfully requests the above change be made to put the responsibility on the permit holders to not target advertisements or promotions to minors, but clarifies a permit holder should not be held liable if a minor comes across sports betting advertising in the course of normal activities on the internet. Permit holders recognize the responsibility a sports betting permit would bring and will work to ensure advertising will meet regulatory requirements set out by the Department, however we ask that operators be granted some flexibility in the process as has been granted in other regulated sports wagering jurisdictions.
G. 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;
DraftKings respectfully requests that the term “amateur or other” be removed from this requirement, as amateur sports are not a prohibited sporting event under Section 58.1-4039 of Article 2 of the Virginia Lottery Act. The remainder of the sentence ensures that wagering can only be offered on sporting events specifically approved by the Director, thus allowing the Director to review and approve only those professional and amateur events where the Director is satisfied as to the integrity of the sport and associated wagering activity.
H. 2. After the preliminary investigation, if the Director concludes that the allegations contained in the report are credible, the Director may [shall] refer the allegations to the appropriate law enforcement agency.
DraftKings respectfully requests the above change be adopted, as not all of the types of investigations outlined in 11 VAC 5-70-230 G may need to be escalated to law enforcement. For example, as discussed in our comment to 11 VAC 5-70-240 C, the current language regarding advertising to minors is very broad and could capture advertising which unintentionally reached minors. Under this provision it would be mandatory to refer such instances to law enforcement, regardless of the circumstances surrounding the incident even if minors were not directly targeted. DraftKings respectfully submits that the regulator should maintain discretion whether to resolve such investigations at the regulatory level or whether they rise to the level regarding law enforcement intervention.
I. A regulated entity shall as soon as commercially reasonable [immediately] report to the Director any information relating to:
DraftKings respectfully requests the above change be adopted to align with the language found in Section 58.1-4044.A of Article 2 of the Virginia Lottery Act, “A permit holder shall, as soon as is commercially reasonable, report to the Department any information relating to…” If this change is not adopted, we respectfully request the term “immediately” be interpreted as a commercially reasonable period of time.
L. A regulated entity shall share with the Director, upon request by the Director, in the form and format required by the Director and in real time and at the account level, information regarding a bettor, amount and type of wager, the time the wager was placed, the location of the wager, including the internet protocol address if applicable, the outcome of the wager, and records of abnormal, unusual, or suspicious wagering activity.
DraftKings respectfully requests clarification around how the Department defines the term “real time” as used in the above provision and asks that it be defined as described in the sports betting law at Section 58.1-4034 D 1, specifically real time be defined as “as soon as is commercially reasonable.”
11 VAC 5-70-240 Advertising and Marketing
A. A permit holder shall maintain and make available upon request [provide] all advertising, marketing, and promotional materials developed by or on behalf of the permit holder by a supplier or vendor to the Director [in advance of publication or dissemination for review and approval in accordance with guidelines issued by the Director].
DraftKings respectfully requests that the requirement that permit holders provide all advertising and marketing materials to the Department for review and approval before publication be amended. Marketing and advertising are important tools for sports betting operators. In order to bring players into the regulated market, thus providing consumer protections for players and revenue for the state, operators need the flexibility to offer strong marketing and advertising campaigns and adapt them as needed.
For example, what is a strong advertisement or promotional offer during week one of the National Football League (NFL) season, may not be an effective advertisement or promotional offer by week four of the NFL season. Something may occur on the field one day and operators will want to run an associated promotion quickly thereafter. Any advertising and marketing requirements implemented by Virginia should therefore allow operators flexibility to adapt their campaigns without requiring express regulatory approval.
If the Department believes review and approval of marketing is necessary for Virginia’s sports betting industry, we respectfully request the Department adopt the model used by New Jersey that limits the review of marketing materials to fact sheets describing the promotion. The New Jersey Division of Gaming Enforcement (NJDGE) requires operators to submit a promo fact sheet to the NJDGE at least 5 days in advance of an offer going live. No affirmative approval is required from the NJDGE for operators to run the offer after the 5-day period expires--operators are free to do so absent contrary guidance from the NJDGE. The NJDGE also does not review all associated advertising assets. This model has helped sports betting operators remain nimble and has played a major role in building New Jersey’s strong sports betting market.
B. A supplier or vendor who advertises, markets, or offers promotions on behalf of more than one permit holder or without affiliation to any permit holder shall maintain and make available upon request [provide] materials to the Director [in advance of publication or dissemination for review and approval in accordance with guidelines issued by the Director].
DraftKings respectfully requests clarification on the types of stakeholders required to provide materials to the Director in advance of publication or dissemination and modification of the requirement that suppliers and vendors provide materials in advance of publication or dissemination for review and approval.
DraftKings further requests clarification as to how the Department intends to capture a scenario where multiple permit holders use one advertising agency for their individual advertising. It is not clear whether this vendor would have to submit advertisements before publication themselves under this provision, or if those would be submitted by the operators pursuant to 11 VAC 5-70-240 A. There will likely be multiple vendors working with different permit holders and this scenario could be confusing and impractical for permit holders.
Related to our proposed changes amending the requirement to maintain and make the information available upon request, the rationale is similar to the comments we provided to 11 VAC 5-70-240 A.
C. A permit holder may not directly target sports betting advertisements or promotions [advertise or promote sports betting] to minors.
DraftKings respectfully requests the above change be made to clarify permit holders may not target advertisements or promotions to minors, but clarifies a permit holder should not be found liable if a minor comes across sports betting advertising in the course of normal activities on the internet. Operators recognize the responsibility a sports betting permit would bring and will work to ensure advertising will meet regulatory requirements set out by the Department, however we ask that operators be granted some flexibility in the process as has been granted in other regulated sports wagering jurisdictions. These changes are also consistent with our proposed changes to 11 VAC 5-70-230 G 7.
D. Advertising, marketing, and promotional materials shall include a responsible gaming message, which includes, at a minimum, a [the] Director-approved problem gambling helpline number and an assistance and prevention message, except as otherwise permitted by the Director for certain mediums such as social media messages.
DraftKings respectfully requests the minor change above to allow the Director discretion to approve multiple problem gambling helpline numbers and messages. This can be beneficial to permit holders as it will help with national advertisements and also allow flexibility for different mediums where full messages may be hard to display.
H. Advertising, marketing, and promotional materials may not feature anyone who is or appears to be below 21 years old, except for professional athletes who may be minors as laid out in 11 VAC 5-80-150 C 1, or imply that minors may engage in sports betting.
DraftKings respectfully requests the above change be adopted in order to align with 11 VAC 5-80-150 C 1, which allows professional athletes who may be minors to endorse advertisements.
[I. A permit holder may not advertise in a media outlet (including social media) that appeals primarily to those under the age of 21.]
DraftKings respectfully requests the removal of the requirement that permit holders not advertise in media outlets (including social media) that appeal primarily to those under the age of 21. The requirement as written is vague and the intent of prohibiting advertising to minors is already covered by requirements 11 VAC 5-70-240 C, G, and H. Advertising in media outlets, including social media, is an important tool for operators to bring players to, and retain players in, the regulated market. Especially because Virginia’s sports betting market is mobile, it would not make sense to prohibit or restrict advertising on social media. In order to shutter the illegal market, players need to know that a regulated product is available.
[J. Advertisements may not be placed with such intensity and frequency that they represent saturation of that medium or become excessive.]
DraftKings respectfully requests to remove the above requirement because the terms “intensity and frequency,” “saturation” and “excessive” are subjective and do not clearly establish prohibited conduct and adequately inform permit holders of their compliance obligations. DraftKings respectfully submits that this requirement could constitute a vague and overly broad limit on commercial speech.
[Q. Advertising, marketing, and promotional materials shall reflect generally accepted contemporary standards of good taste.]
DraftKings respectfully requests the requirement that advertisements shall reflect generally accepted contemporary standards of good taste be removed. The intent of advertising being in “contemporary standards of good taste” is subjective and already covered by requirement 11 VAC 5-70-240(P), which prohibits advertising from containing or implying “lewd or indecent language, images [or] actions.” A reasonable interpretation of contemporary standards of good taste would be advertisements absent lewd or indecent language, images, or actions. For this reason, this provision is redundant, and we request the requirement be removed.
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.
PLEASE NOTE text in underlined bold denotes an insertion and text between [brackets] denotes a deletion.
11 VAC 5-70-280 Geolocation Systems
A. A permit holder shall keep its geolocation system up to date, including integrating [the latest] current solutions in real time that can detect the use of remote desktop software, rootkits, virtualization, or any other programs identified by the Director as having the ability to circumvent geolocation measures.
B. At least [every 90 days] annually, a permit holder shall provide the Director evidence that the geolocation system is updated to the latest solution.
C. At least [every 90 days] annually, the integrity of the geolocation system shall be reviewed by the permit holder to ensure that the system detects and mitigates existing and emerging location fraud risks.
DraftKings respectfully requests this change to Section A to allow a permit holder to use an effective, regulatorily compliant solution even if it is not the latest iteration. Our proposed change to Section B ensures that all solutions are updated at least annually to the most current solution, and the change to Section C ensures that the integrity of the geolocations system is reviewed annually.
Currently, many operators in the U.S. utilize the same geolocation provider, so requiring each permit holder to provide evidence four times a year that their system is up to date and meets integrity standards is unnecessary, and any minimal benefit is outweighed by the burden this requirement places on the permit holder and the Director. Requiring a permit holder to provide evidence once annually that the geolocation system is updated and the integrity confirmed is a more reasonable requirement and could be aligned with other reviews performed by the Director, effectively utilizing time and resources of the Director and permit holders. The proposed changes also permit the Director the ability to require evidence on additional occasions if determined necessary.
D. In order to prevent unauthorized placement of an internet sports betting wager by an individual not within the Commonwealth of Virginia, the sports betting platform must utilize a geofencing system to reasonably detect the physical location of an individual attempting to access the sports betting platform and place an internet sports betting wager and to monitor and block unauthorized attempts to [access the internet sports betting platform in order to] place an internet sports betting wager when an individual is not within the permitted boundary.
DraftKings respectfully requests that this section be amended to clarify that only the placing of a wager on a platform is prohibited outside of the territorial bounds of the Commonwealth, rather than accessing the platform at all. Sports betting operators commonly make their platforms available nationally for people to access and explore, however the placing of a wager is strictly limited to within permissible geographic bounds.
11 VAC 5-70-290 Player Accounts
B. The information necessary to initiate a player account shall be recorded and maintained for a period of five years, and shall include at least the:
8. Document number of the government-issued identification credentials entered, or other methodology for remote, multi-source authentication, which may include third-party and governmental databases, as approved by the Director.
DraftKings respectfully requests clarification regarding the seeming conflict between 11 VAC 5-70-290 B 2, which requires that document numbers for government-issued identification credentials be maintained for five years, with the requirements of 11 VAC 5-80-50 A 5, which says that such information must be deleted from the permit holder’s records promptly after verification is complete.
E. A permit holder shall notify the player of the establishment of the player account by e-mail, text message, or first-class mail. [Once] When a player account is created, a secure personal identification (e.g., a unique username and password) for the player authorized to use the player account shall be established that is reasonably designed to prevent unauthorized access to, or use of, the player account by any individual other than the player for whom the player account is established.
DraftKings respectfully requests additional clarification regarding this requirement. Usernames are created during the registration process, so we respectfully suggest clarifying that this step does not happen after an account has been created. Furthermore, usernames are used for identification purposes and are publicly displayed on the platform and visible to other users, and therefore would not be considered secure personal information designed to prevent unauthorized access to an account. We suggest specifying that a password is also used to prevent unauthorized access.
G. A player account may be funded using:…
6. Cash;
7. A reloadable prepaid card, which has been verified as being issued to the patron and is non-transferrable; and
8. Any other means approved by the Board.
DraftKings respectfully suggests that cash and player cards be included as specifically authorized means to fund an account since the offering of the sports betting platform in physical locations is contemplated by 11 VAC 5-70-5 A 8.
R. A permit holder shall suspend a player account if:
1. The player asks for suspension for a specified period not [to exceed] less than 72 hours as a self-limiting measure;
DraftKings respectfully requests this change to reflect that 72 hours should be the minimum self-limiting period, rather than the maximum. We believe that the better responsible gaming policy is to provide users with at least a 72 hour cooling off period if they feel the need to self-limit before reengaging in participation.
I am a resident of Stephens City, VA. When our neighbors in WV legalized sports betting ahead of us, I have been driving across the state line multiple times per week to place wagers. I can tell you when WVU plays a football or basketball game, people are lined up in WVU apparel in Charles Town to place wagers on their favorite team. The loss of revenue from not allowing VA residents to bet on VA schools is mind boggling. Why are you going to leave all that money on the table? Prop bets on collegiate action as well as Olympic action should not be omitted. It is a 20 minute drive for me to cross the WV state line and I will continue to do so when I want to bet on VA schools. If you’re going to jump in to sports betting, jump in.
September 8, 2020
Amy Dilworth
General Counsel
Virginia Lottery Board
600 E. Main Street
Richmond, VA 23219
Re: NFL Comments on Proposed Regulations for Online Sports Betting
Dear Ms. Dilworth:
On behalf of the National Football League (“NFL”) and its member clubs, we appreciate the opportunity to provide feedback on the Lottery’s proposed regulations for online sports betting. We want to thank the Virginia Lottery Board for your willingness to engage with our organization to work on the future of sports betting in Virginia. As a key stakeholder and partner in the process, we appreciate your help in ensuring the integrity of our games is protected.
This letter sets forth certain suggested amendments to the proposed regulations pursuant to Virginia 2020 Session Chapters 1218 and 1256. These recommendations are intended to help further the Act’s fundamental objectives, while focusing in particular on the regulations in 11VAC5-70-190 (Use of Official League Data); 11VAC5-70-170 (Permissible Wagers); and 11VAC5-70-180 (Requests from Sports Governing Bodies), which we believe are essential to consumer protection.
Our suggestions are set forth below (in sequential order of the corresponding regulations):
Thank you again for providing us an opportunity to submit our comments. We believe the proposed regulations do a great job of addressing some of our issues and hope that you will take our suggestions into consideration to properly capture those remaining concerns. We welcome the opportunity to meet with you to discuss our concerns in greater detail. Please contact Jonathan Nabavi (Jonathan.Nabavi@nfl.com) or Marvin Yates (Marvin.Yates@nfl.com) with any questions.
[1] Tennessee Sports Gaming Rules and Regulations, Tennessee Education Lottery Corporation, https://www.tnlottery.com/sites/default/files/2020-04/TN_Rules_%26_Regulations_-_FINAL_04-15-20_0.pdf, August 21, 2020
[2] Iowa Approved Sports Wager, Iowa Racing and Gaming Commission, https://irgc.iowa.gov/sites/default/files/documents/2020/08/approved_wager_listing_080420.pdf, August 4, 2020
11 VAC 5-70-140. Reserve and Insurance Requirements.
Subsection (A) of this section provides a list of the permissible forms that a permit holder’s reserve to cover the outstanding liability of the permit holder to players may take, however the list does not include payment processor reserves and receivables. This option is authorized in a number of states, including: Colorado; Iowa; Indiana; and Pennsylvania. Allowing permit holders to use payment processor reserves and receivables to satisfy the reserve requirement allows for greater flexibility for permit holders to invest in driving customers from the illegal offshore market to the legal regulated market, while still ensuring the customer protection that the reserve requirement provides.
Additionally, Subsection (A) prohibits permit holders from removing, releasing, or withdrawing any funds from its reserves “without the written approval of the Director.” This provision is inconsistent with the provisions of Subdivision (5) of Subsection (B) of this section, which requires daily calculation of the reserve requirement. As acknowledged, the reserve requirement will fluctuate and permit holders should be able to deposit and withdraw reserve funds in concert with this calculation, to ensure the reserve is sufficient, without having to request the written approval of the director.
Subdivision (5) of Subsection (B) of this section requires that in the event a permit holder’s reserve is insufficient, the permit holder must provide notification to the director within twenty-four hours, including an explanation of the steps taken to remedy the deficiency. In the unlikely event that such a shortfall occurs, the process of identifying and remediating the technical issue, accounting error, or other underlying cause may well take longer than 24 hours. Requiring permit holders to report such events on an overly abbreviated and rigid timeline would unnecessarily distract them from prioritizing analytical and remediation efforts, without providing any meaningful countervailing benefit. Instead, the provision should be revised to require notification to the director within 48 hours following the permit holder’s identification of any such deficiency.
To address the concerns raised above, we suggest the following changes to 11 VAC 5-70-140:
“A. A permit holder shall maintain a reserve in the form of cash, cash equivalents, irrevocable letter of credit, payment processor reserves and receivables, or bond, or a combination thereof, in an amount approved by the Director to cover the outstanding liability of the permit holder to players. A bond used by a permit holder to maintain any portion of its reserve shall comply with the bond requirements of section 100 of this chapter. [A permit holder may not remove, release, or withdraw funds from its reserves without the written approval of the Director.]
…
5. A permit holder shall calculate its reserve requirements each day and, if the permit holder determines its reserve is insufficient to cover the requirement of this subsection, it shall notify the Director of the deficiency within [24] 48 hours and identify the steps taken to remedy the deficiency.”
11 VAC 5-70-160. Audit, Financial, Recordkeeping, and Banking Requirements.
Subsection (C) of this section provides a five year record retention requirement on permit holders, however the provisions of §58.1-4034 of the Code of Virginia only imposes a three year record retention requirement. To conform the requirements of the regulation to those in statute, this requirement should be change to three years.
To address the concern raised above, we suggest the following change to 11 VAC 5-70-160(C):
“C. A permit holder shall retain all records, financial records, supporting documents, statistical records, and any other documents, including electronic storage media, pertinent to its sports betting operation for at least [five] three years from their creation.”
11 VAC 5-70-170. Permissible Wagers.
Subsection (A) of this section includes a prohibition on proposition wagers on college sports which reflects the prohibition included in §58.1-4039(A)(2) of the Code of Virginia. While Colorado has substantially similar language in statute (CRS 44-30-1501(8)), the Colorado Limited Gaming Control Commission has interpreted this language to only prohibit individual player propositions as it relates to college sports events, while allowing other proposition wagers. The wagers authorized for sporting events are available in their approved events catalog, which may be viewed here: https://www.colorado.gov/pacific/enforcement/sports-betting-catalog
As a comparison, Colorado authorizes a significant number of individual player propositions for NFL football (player to score the first touchdown, player x passing yards, player x receiving yards, etc.) that are not approved for NCAA football, while wagers are allowed on both for team based propositions (team to have the most passing yards, team to have the most rushing yards, etc.). Virginia would be best served to follow this model, to ensure that customers are able to access the widest variety of wagers permissible under the statute.
Additionally, we suggest that Virginia adopt a similar procedure to that of Colorado in publishing a catalog or list of approved wagers types for every sport. This serves the public in knowing what wagers are authorized for every sport, serves the operators by providing them with a comprehensive list of all approved wager types, and serves the Lottery by eliminating duplicative requests from operators to approve sports/wagers types that have already been requested by, and approved for, other operators.
To address the concerns raised above, we suggest the following changes to 11 VAC 5-70-170:
“A. A permit holder may accept a wager from a player on sporting events, including:
[A.] 1. A proposition wager, except a proposition wager on an individual participant in college sports or a proposition wager placed on any type of possible injury;
[B.] 2. A bet placed after the sporting event has started; or
[C.] 3. A bet placed after the sporting event has started, in compliance with § 58.1-4036 of the Code of Virginia and section 190 of this chapter.
B. 1. A permit holder may accept wagers on those sports events and leagues approved by the Lottery, which shall be reflected on an Authorized Sports Betting Sports Events, Leagues or Bets List.
2. Where a sports league is authorized, permit holders may accept wagers on all sports events conducted by such sports league, where the sports event is of the kind generally conducted by that league.
3. The Director or designee shall post on the Lottery website a list of authorized sports events, leagues and bets. As new events and/or leagues are authorized per 11 VAC 5-70-170(C), the Director or designee shall update the list of Authorized Sports Betting Sports Events, Leagues and Bets List, and inform the permit holders, sports betting platform suppliers, and applicable sports governing bodies of those changes. New sports events approved by the Lottery based on requests received from a permit holder are considered approved for all permit holders and will be noticed in accordance with this Rule.
(C) 1. Permit holders may request the Lottery authorize sports events, leagues or bets not already authorized and included on the Authorized Sports Betting Events and Leagues and Bets List. Permit holders must apply prior to offering the new event or wager to the public. Permit holders must submit the application at least 72 hours prior to any new scheduled event requested.
2. The application shall be in a form as specified by the Lottery, including:
(a) The name of the sports governing body; and
(b) A description of its policies and procedures regarding event integrity.
3. Where a permit holder wishes to authorize a sports event conducted by an approved sports league, of a type not generally conducted by that sports league, the Lottery may contact the sports governing body for input.
4. The Director or Director’s designee will consider the following factors prior to authorizing a sports event, league or portion of a sport or athletic event:
(a) Any relevant input from the sports governing body or conductor of the sports event;
(b) Whether the outcome is determined solely by chance;
(c) Whether the outcome can be verified;
(d) Whether the event generating the outcome is conducted in a manner that ensures sufficient integrity controls exist so the outcome can be trusted;
(e) That the outcome is not affected by any bet placed; and
(f) Whether the event is conducted in conformity with all applicable laws.”
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.
…
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. 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].
…
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.
…
G. The Director may investigate the possibility of any of the following activities:
…
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;
…
I. A regulated entity shall [immediately] as soon as is commercially reasonable report to the Director any information relating to:
…
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;
…
N. For purposes of subdivisions L and M of this section, “real-time” shall mean on a commercially reasonable periodic interval.”
11 VAC 5-70-240. Advertising and Marketing.
The provisions of this section outline a number of requirements on permit holders, suppliers and vendors who engage in advertising and marketing of sports betting. Among these provisions is the requirement that they submit all advertising, marketing, and promotional materials for review and approval by the Director before they are published or disseminated. This process will constrain the ability of permit holders to effectively keep marketing efforts up to date with developments in the sports world and will hamper efforts to migrate sports bettors from the illegal offshore wagering market to legal regulated permit holders. We suggest the language be modified slightly to enable the Director to adopt procedures that will permit requisite flexibility for both operators and the Lottery to ensure that consumers get the benefit of timely promotions that reflect current sports events, while also ensuring that offers and promotions adhere to certain uniform standards. In this way, Virgina can model other sports betting states that have adopted procedure that have served operators and regulators well. Additionally, there are a number of subjective content-based restrictions proposed in this section that should be removed.
To address the concerns raised above, we suggest the following changes to 11 VAC 5-70-240:
“A. A permit holder shall provide all advertising, marketing, and promotional materials developed by or on behalf of the permit holder by a supplier or vendor to the Director in advance of publication or dissemination for review [and approval] in accordance with guidelines issued by the Director.
B. A supplier or vendor who advertises, markets, or offers promotions on behalf of more than one permit holder or without affiliation to any permit holder shall provide materials to the Director in advance of publication or dissemination for review [and approval] in accordance with guidelines issued by the Director.
…
[Q. Advertising, marketing, and promotional materials shall reflect generally accepted contemporary standards of good taste.]”
11 VAC 5-70-270. Sports Betting Platform Requirements.
This section outlines the requirements sports betting platforms must meet. This section includes a requirement in Subsection (D) that a permit holder must provide the Director with “remote, read only, real time access” to its sports betting platform. This requirement for remote access to a permit holder’s sports betting system is not included in statute, nor is it included the regulations of other states. However, we understand the need for the Director to access wagering data as needed and this section should be amended to allow the Director to request reports of wagering data. Further, Subsection (E) should be amended to bring the record retention requirement into conformity with the provisions of §58.1-4034(C) of the Code of Virginia.
Finally, the provisions of Subsection (M) of this section require permit holders to cancel any outstanding wagers a player may have at the time they decide to self-exclude and return the funds to the bettor. This creates a potential incentive for a bettor who has a sizable pending wager to self-exclude in order to avoid losing the bet. To prevent this, Virginia should mirror the requirement of Tennessee Sports Gaming License Rules, Regulations and Standards 15.1.6(H)(8):
“In the event a Player has a pending Wager and then the Player self-excludes, the account balance on settled wagers shall be returned to the Player in accordance with the Sports Gaming Operator’s internal controls.”
To address the concerns raised above, we suggest the following changes to 11 VAC 5-70-270:
“D. A permit holder shall provide the Director with [remote, read only, real time access to] reports upon request from the sports betting platform that shall be able to incorporate [include], at a minimum:
E. A permit holder or the supplier providing a permit holder’s sports betting platform shall maintain all transactional wagering data for a period of [five] three years.
…
M. If a player has a pending wager and the player subsequently self-excludes, the [wager shall be cancelled and the funds and] account balance shall be returned to the player in accordance with the permit holder’s internal controls.”
11 VAC 5-70-280. Geolocation Systems.
Subsections (D) and (E) of this section create uncertainty about the extent to which sports bettors will be able to access the sports betting platform and their accounts while outside of the Commonwealth. Other states allow sports bettors to access the sports betting platform and their accounts while out of the state in order to deposit and withdraw funds, check on the status of their wagers, and make adjustments to their account, while still prohibiting the sports bettor from placing any wagers while out of state. These subsections should be amended to clearly prohibit the placement of wagers while a sports bettor is out of state, while still allowing the sports bettor to access their account and the sports betting platform.
To address the concerns raised above, we suggest the following changes to 11 VAC 5-70-280:
“D. In order to prevent unauthorized placement of an internet sports betting wager by an individual not within the Commonwealth of Virginia, the sports betting platform must utilize a geofencing system to reasonably detect the physical location of an individual attempting to access the sports betting platform and place an internet sports betting wager and to monitor and block unauthorized attempts [to access the internet sports betting platform in order] to place an internet sports betting wager when an individual is not within the permitted boundary.
E. The geofencing system must ensure that an individual is located within the permitted boundary when placing an internet sports betting wager and must be equipped to dynamically monitor the individual’s location and block unauthorized attempts [to access the sports betting platform in order] to place an internet sports betting wager when an individual is not within the permitted boundary.”
11 VAC 5-70-290. Player Accounts.
Subsection (B) of this section provides a five year record retention requirement on permit holders, however the provisions of §58.1-4034(C) of the Code of Virginia only imposes a three year record retention requirement. To conform the requirements of the regulation to those in statute, this requirement should be change to three years.
Subsections (G) and (H) of this section provide the forms in which players may deposit funds to, and withdraw funds from, their sports betting accounts. While there are a number of options included in these subsections as drafted, two popular options, cash and reloadable prepaid cards, were inadvertently left out. Reloadable prepaid cards have shown to be a popular option for funding sports betting accounts in other states and should be authorized in Virginia.
To address the concerns raised above, we suggest the following changes to 11 VAC 5-70-290:
“B. The information necessary to initiate a player account shall be recorded and maintained for a period of [five] three years, and shall include at least the:
…
E. A player account may be funded using:
1. A debit card;
2. A credit card;
7. Reloadable prepaid card; and
8. Any other means approved by the Board.
H. Funds may be withdrawn from a player account through:
8. Any other means approved by the Board.”
RE: Virginia Lottery Board DRAFT Sports Betting Licensing and Consumer Protection Regulations
Mr. Kevin Hall
Executive Director
Virginia Lottery Board
600 E Main Street
Richmond, VA 23219
Dear Mr. Hall,
The Fantasy Sports and Gaming Association (“FSGA”) is the leading representative of the fantasy sports and sports betting industry. The FSGA represents over 150 member companies which provide fantasy sports and sports betting products and software, including such major media companies as ESPN, CBS, Yahoo!, NBC, NFL.com and FOX Sports, content and data companies such as USA Today and SportRadar, long-standing contest and league management companies such as MyFantasyLeague and the Fantasy Football Players Championship and almost every major daily fantasy sports contest company, including FanDuel and DraftKings, and many other small fantasy sports businesses.
Based on our member’s extensive experience across the country and world in sports wagering, we submit the following comments on the proposed sports betting regulations for your consideration.
The FSGA is concerned with the prohibition on wagering on Olympic events (11 VAC 5-70-10 and 11 VAC 5-80-10, definition of “sports betting”) because it is not prohibited by authorizing statute. Eliminating Olympic events from permissible wagers serves no public safety objective, was not included in the intent of the authorizing law, and weakens the attempt to eradicate the illegal wagering market in Virginia. The Director has the authority to approve events on a case-by-case basis, and the FSGA argues that should be where the decision is made, rather than reducing the available offerings from the start and restricting future decisions about allowing wagers on a series of events with wide popularity.
On a similar note, the FSGA would recommend amending 11 VAC 5-70-230 (G)(8) to remove “amateur event”, as this term is not only undefined by the rules and regulations, it was not included in the list of prohibited event wager types in the law and the law makes explicitly clear certain sporting events that are prohibited from wagering. As noted above, the Director has the authority to approve or not approve events and permit holders are required to follow those approvals, and it should be at that point that the Director uses his or her discretion to approve an event, rather than binding by rule.
The FSGA finds the definition of principal overly broad, to the point of excess. Encompassing any individual in a managerial capacity for a permit holder, whether that individual has direct access to customer or bet information or not, creates a regulatory and financial burden for applicants that could potentially deter qualified entities from applying for a licensing in the Commonwealth. In particular, should this overly broad definition not be tailored to license employees that handle potentially sensitive data, it would create a significant financial burden, given the $50,000 permitting and investigative fee.
Section 11 VAC 5-70-230, Advertising and Marketing, contains a number of provisions that, due to being vague and overbroad, will prevent the industry from reaching its full potential. Quality advertising, which is necessary to encourage bettors to join the legal market and leave the pervasive illegal market, must be nimble, innovative, and creative. Requiring that all advertising be approved and comply with subjective requirements such as “good taste” or “excessive saturation” will make it harder for operators to know what they can offer, and will make it harder for them to compete with the illegal market. Finally, prohibiting or significantly limiting advertising on certain social media platforms could potentially eliminate one of the best tools permit holders have to bring bettors from the illegal market into the legal market. Every permit holder has the duty to avoid appealing to minors, but there are other provisions in both the marketing requirements and elsewhere in the proposed regulations that will prevent targeting minors, without eliminating social media marketing.
The FSGA would suggest removing 11 VAC 5-80-20 (B) from the proposed regulations. Businesses with large numbers of consumers, like our members, commonly include alternative dispute resolution clauses in their terms of agreement, as a way to effectively resolve consumer complaints. These clauses allow for faster, more cost-effective resolutions. Virginia law does not prohibit arbitration agreements and this dispute resolution tactic should be available to permit holders. Further, consumers have multiple avenues to resolve their disputes, as included in the Sports Bettor’s Bill of Rights and the Virginia Lottery Retailer Dispute Resolution Procedures.
While all members of the FSGA take consumer protection very seriously, we would like to note some concerns with the Sports Bettor Bill of Rights and how, as written in the regulations, it does not match the legislative intent of the sports betting law. As sports betting is rolled out in Virginia, there will be a lot of bettors that are new to sports betting, and the Bill of Rights should be designed to protect their interests, particularly requiring permit holders to provide information on the areas laid out in the authorizing law. The types of information that protect customers and are specified in the law include defining how their accounts and identities are protected, outlining a clear consumer complaint process, providing information on self-exclusion, describing consumer protection measures like fraud protection, and responsible gaming limits available on the sports betting platform. These are the areas that should be listed in the Bill of Rights. It is important that bettors understand features in place and available to them that impact their interaction with the sports betting platform.
Of particular concern in the current version of the Sports Bettors Bill of Rights are11 VAC 5-80-20(C)(1)(a) and (b), which require operators to display the handle and odds of winning. Handle changes constantly and will be of little use to bettors even if it could be displayed, and there are no set odds of winning. While all permit holders should seek to protect all consumers that use their platforms, if the statutory and regulatory intent is to protect sports bettors who are more unfamiliar with sports wagering, this information may only serve to confuse those bettors. Further, this information is considered proprietary and sports betting operators are not required to disclose this type of information in any other jurisdictions.
We appreciate the opportunity to provide feedback on the proposed rules and look forward to creating an enjoyable sports wagering experience for all Virginians.
Thank you for your time and consideration.
Sincerely,
Peter Schoenke
Chairman Government Affairs, Fantasy Sports & Gaming Association
1818 Parmenter St., Suite 300
Middleton, WI 53562
www.theFSGA.org
Mr. Kevin Hall
Executive Director
Virginia Lottery
600 E. Main St.
Richmond, VA 23219
Dear Mr. Hall,
On behalf of PointsBet USA, below please find our comments regarding the Draft Sports Betting Regulations. We are submitting comments in anticipation of PointsBet prospectively being able to operate sports wagering in the state of Virginia via the upcoming application process. In the event of an award to operate, PointsBet looks forward to bringing the people of Virginia the fastest and most exciting sports betting experience in the Commonwealth.
We look forward to the successful future of sports betting in Virginia under the purview of the Lottery.
D. A request for self-exclusion shall be in a form prescribed by the Department, which shall include:
2. The length of self-exclusion requested by the individual:
i. Two years;
ii. Five years; or
iii. Lifetime;
Comment: We suggest shorter time-out thresholds, such as those that apply within the current Lottery minimum standards, in addition to the listed thresholds.
A. The Department shall maintain the official self-exclusion list and shall transmit notification of any addition to or deletion from the list to:
(i) each holder of a permit to operate a sports betting platform;
(ii) the Office of Charitable and Regulatory Programs; and
(iii) the Virginia Racing Commission.
Comment: We suggest should be submitted daily, via an automated SFTP to ensure all operators have the most up to date information.
11VAC5-70-10. Definitions.
“Multi-source authentication” means a strong procedure that requires more than one method to verify a player’s identity through a combination of two or more independent credentials, including:
Comment: We suggest adding, after the word “including,” “or other methodologies that may be approved by the Board,” to not strictly limit approved options.
11VAC5-70-10. Definitions.
“Prohibited individual” means any individual: (1) who is prohibited from wagering pursuant to the sports betting law; (2) whose name is on any self-exclusion list or Virginia Lottery exclusion list;
(3) whose participation may undermine the integrity of the wagering or the sporting event; (4) who is excluded from wagering for any other good cause; or (5) who makes or attempts to make a wager as an agent or proxy on behalf of another for compensation (i.e., messenger betting).
Comment: We note that provisions (3) and (4) may be considered subjective and difficult for operators to properly enforce without explicit guidance, or an explicit list of prohibited users provided by the Commonwealth.
11VAC5-70-10. Definitions.
“Sports event” or “sporting event” means professional sports, college sports, and any athletic event, motor race event, electronic sports event, or competitive video game event.
Comment: We suggest including fixed-odds horse racing, entertainment betting, and event wagering like political betting. These types of bets are available in the black market. Prohibition of wagers functions to funnel activity to black market operators that are able to offer these wagers in absence of enforcement and prevents the Commonwealth from recapturing the prolific black market that legal sports betting is intended to curb.
J. The Director may award a sports betting permit after consideration of the application and based on:
2. The extent to which the applicant has demonstrated past experience, financial viability, compliance with applicable laws and regulations, and success with sports betting in other states
Comment: We suggest replacing “states” with “jurisdictions”.
H. A permit holder’s integrity monitoring system shall be accessible to the Director via remote access and shall produce, at a minimum:
Comment: Industry practice is such that the integrity monitoring system will be a third party, and operators will not be able to directly provide remote access, as the operator does not enjoy control over the third-party integrity monitoring system.
11VAC5-70-220. Integrity Monitoring.
H.3 An accredited sports governing body as required by the Director pursuant to the sports betting law.
Comment: We suggest removal or tightening of language to ensure that the sports governing body may not exploit this information commercially in any way. To the extent an operator wishes to share proprietary data and/or information with a sport governing body, it is a commercial decision between private entities that should not be mandated in public policy. The only information shared should be directly and unambiguously related to verifiable integrity requests coming from the Board.
A. A regulated entity shall cooperate in good faith with an investigation conducted by the Director, a sports governing body, or a law enforcement agency.
Comment: We suggest removal of the language “a sports governing body.” The operators are not and should not be beholden to sport governing bodies as its regulator. Operators should cooperate in good faith with the Board and relevant law enforcement agencies. Any inquiries arising directly from a sport governing body should be routed and vetted directly through the Director or relevant law enforcement agency as a matter of procedure. To the extent the Director or relevant law enforcement agency must share information with a sport governing body, it should be done in accordance with strict confidentiality and for the limited purpose of integrity monitoring.
2.- 4. above, to the relevant sports governing body and provide written notice of that communication to the Director. With respect to information provided by a permit holder or supplier to a sports governing body, the sports governing body may use such information only for integrity purposes and shall maintain the confidentiality of such information unless disclosure is required by the Director, the sports betting or other law, or a court order; or if the permit holder or supplier consents to disclosure. A sports governing body may make disclosures upon notice to Director and if the Director determines that the disclosures are necessary to allow the sports governing body to conduct and resolve integrity-related investigations.
Comment: Suggest removing “to the relevant sports governing body.” Procedurally, all communication from the operator should go through its regulators, and the regulators should choose what they believe is relevant to share with the sport governing body or bodies. Operators are not beholden to sport governing bodies as regulators. To clarify, this is not a philosophical opposition of information sharing with a sport governing body, but rather an important point of procedure that ensures the sport governmental bodies are not able to usurp governmental or regulatory power.
11VAC5-70-230. Investigations; Reporting.
K. If a sports governing body notifies the Director that real-time information sharing for wagers placed on its sporting events is necessary and desirable, and the Director determines in the Director’s sole discretion that real-time information sharing is necessary, a regulated entity shall share the same information with the sports governing body or its designee with respect to wagers on its sporting events. Such information may be provided in anonymized form and may be used by a sports governing body solely for integrity purposes.
Comment: Same comment as above, and we suggest the same tightening of language to ensure this is not exploited commercially. Agreements between private entities should occur in private contracts, not via public statute or rules.
11VAC5-70-240. Advertising and Marketing.
A. A permit holder shall provide all advertising, marketing, and promotional materials developed by or on behalf of the permit holder by a supplier or vendor to the Director in advance of publication or dissemination for review and approval in accordance with guidelines issued by the Director.
Comment: Suggest that a procedure where each individual piece of marketing material or each individual marketing initiative requires specific approval or pre-approval is overly burdensome for both the operators and the regulator, and is not the industry standard. The submission and subsequent approval or denial of campaign templates on a monthly basis is commonplace in other jurisdictions.
11VAC5-70-290. Player Accounts.
G. A player account may be funded using: 1. A debit card; 2.A credit card; 3. An electronic bank transfer, including a transfer through third parties; 4. An online or mobile payment systems that supports online money transfers; 5. Winnings or payouts; and 6. Any other means approved by the Board.
H. Funds may be withdrawn from a player account through: 1. Wagers; 2. Cashier’s check, wire transfer, or money order by the permit holder made payable to the player and issued directly or delivered to the player’s address on file with the permit holder; 3. Credits to the player’s debit card; 4. Credits to the player’s credit card; 5. Electronic bank transfers, including transfers through third parties; 6. Online or mobile payment systems that support online money transfers; or 7. Any other means approved by the Board.
Comment: In the interest of providing convenient and compliant availability to sports wagering participation in the Commonwealth for all prospective customers and increasing revenue to the state, understanding that the existing rule provides for “other means approved by the Board” for funding and withdrawing from player accounts, we recommend a rule(s) inclusion that permits for on-premise operating activities to facilitate cash account deposits and withdrawals while requiring identity verification/Know Your Customer (“KYC”).
11VAC5-70-290. Player Accounts.
K. Each transaction with respect to a player account between a player and permit holder, except the placement or settlement of a wager, shall be confirmed by e-mail, telephone, text message, or other means agreed upon by the player and permit holder.
Comment: We suggest flexibility in this, as the player could receive too many communications. We suggest the player or operator may have the optionality to choose the types of transactional messages sent or received, though in all cases the operator will have all transactional records available for the player upon request.
11 AC 5-80-20 Sports bettors’ bill of rights
C. A permit holder’s platform site must provide substantial and readily available information to enable players to make informed decisions about their gambling, including:
1. With regard to any sports bet, prominent publication of, at a minimum:
a. The handle of the bet;
b. The odds of winning the bet and the information used to calculate those odds; and
3. The payout amounts and a schedule of payouts.
2. Information on play (e.g., player feedback); and
3. Designated player information or support services regarding play management tools.
Comment: There is not a precedent for this in US jurisdictions and the contract between a player and operator is typically covered in the operator house rules, terms and conditions, and other similar documents. This data represents codifying into regulation the sharing of protected intellectual property that has no bearing on the integrity of an operation. It should be an operator’s choice if it decides to make this type of information publicly available. For example, providing explicit information on how odds may be calculated are highly protected trade secrets that have no bearing on product or operational integrity or a user’s choice to place a bet, and as such should not be a requirement of regulation. Further, displaying the weight of money (the “handle”) on any available bet or wager may also function to affect the integrity of a sporting event if this is widely available public information. We request further clarification on the intent of “information on play” and “designated player information or support services regarding play management tools”, and what may be required over and above industry standard customer service requirements or responsible gaming requirements.
11 VAC 5-80-90 Sports betting platform features
A sports betting platform must possess the following features:
3. Game designs that promote breaks in play and avoidance of excessive play
Comment: Suggest this is highly subjective and difficult to enforce without specific provisions. Suggest removal of this provision, in the context of operators having robust responsible gaming provisions already.
11 VAC 5-80-90 Sports betting platform features
10. Cash transfers and automatic deposits are prohibited or restricted
Comment: What defines automatic deposit? Seeking clarification on what defines “automatic deposit?”
11 AC 5-80-110 Limitations on user accounts
C. A permit holder shall implement and prominently publish procedures to terminate all accounts of any sports bettor who establishes or seeks to establish more than one username or more than one account, whether directly or by use of another individual as proxy. Such procedures may allow a sports bettor who establishes or seeks to establish more than one username or more than one account to retain one account, provided that the permit holder investigates and makes a good faith determination that the sports bettor's conduct was not intended to commit fraud or otherwise evade the requirements of this chapter or regulations thereof.
D. A permit holder shall not allow a sports bettor to use a proxy server for the purpose of misrepresenting his location in order to engage in sports betting.
E. A permit holder shall take commercially and technologically reasonable measures to prevent one sports bettor from acting as a proxy for another. Such measures shall include, without limitation, use of geolocation technologies to prevent simultaneous logins to a single account from geographically inconsistent locations.
Comment: An operator should be provided the right to deduct all activity and refund any deposits if third party account use, proxy use, or other detectable fraud is identified and documented.
11 AC 5-80-120 Protections for at-risk or problem bettors.
A permit holder shall develop and prominently publish procedures for honoring requests made by third parties to exclude or set limits for sports bettors. Such procedures shall include provisions for honoring requests to exclude sports bettors for whom the requester provides documentary evidence of sole or joint financial responsibility for the source of any funds wagered on sports betting on a platform owned by the permit holder, including:
Comment: This language could be interpreted as ambiguous. Seeking clarification on the intent of this section as it implies third-parties may exercise control over accounts that do not belong to them.
VIRGINIA SPORTS BETTORS’ BILL OF RIGHTS
Comment: The sports bettor’s bill of rights implies that regulated operations in other states may not administered fairly in absence of these provisions, which are beyond what is considered industry standard.
Comment: Please see the earlier comment regarding displaying odds and pertinent information regarding wagers, including handle. This is protected IP. Odds made available but the underlying methodologies are protected IP. Prohibition of athletes and team affiliates, including employees, from betting on games, leagues, or sports in which they participate.
Comment: If this is to be feasible, leagues must be required to make this information available to operator at no fee in the interest of integrity.
Kind Regards,
PointsBet USA
It would appear that many of the items for Player Account Management, Responsible Gaming, and the other functions of the platform not specific to Sports Wagering could be broadened to cover not just Online Sports Wagering, but iLottery (or any other form of online gaming controlled by the Lottery) as well. It might be worth having separate chapters where one is general and the other is more specific to sports wagering only.
The regulations appear to jump around in terms of content between 11 VAC 5-70 and 11 VAC 5-60. For instance, the following sections should be consolidated or moved towards one another.
Advertising: 11 VAC 5-70-240 and 11 VAC 5-80-150/11 VAC 5-80-160
Reserves/Segregated Accounts: 11 VAC 5-70-140 and 11 VAC 5-80-100
Integrity Monitoring: 11 VAC 5-70-220.B and 11 VAC 5-70-230.I
Location Detection: 11 VAC 5-70-280, 11 VAC 5-80-40, and 11 VAC 5-80-110.D and E
Minors: 11 VAC 5-70-210.A and 11 VAC 5-80-50.B
Prohibited/Excluded Players: 11 VAC 5-70-210.E and 11 VAC 5-80-70.A
Identity Verification: 11 VAC 5-80-110.B and 11 VAC 5-70-290.D
Terms and Conditions: 11 VAC 5-70-290 and 11 VAC 5-80-90.6
One Account/Player: 11 VAC 5-70-290.F and 11 VAC 5-80-110
Account Withdrawals and Closures: 11 VAC 5-70-290, 11 VAC 5-80-100.E.6, and 11 VAC 5-80-100.F
Credit Prohibition: 11 VAC 5-80-130 and 11 VAC 5-80-90.9
Responsible Gaming: 11 VAC 5-80-80 and 11 VAC 5-80-120 and 11 VAC 5-80-90.4
Complaints: 11 VAC 5-80-30 and 11 VAC 5-80-100.F.4
Privacy: 11 VAC 5-80-100 and 11 VAC 5-70-240.S
Comments on Draft Virginia Sports Betting Regulations
Caesars Entertainment
September 8, 2020
11VAC5-70-10 – Definitions
The definition of “integrity monitoring system” should be expanded to include policies, procedures, and communications related to an approved integrity monitoring association or system provider as specified in 11VAC5-70-220.
The definition of “multi-source authentication” should be expanded to include ”a one-time text code or email verification” to the list of independent credentials approved for use in identity verification.
11VAC5-70-170 – Permissible Wagers
Sections B and C, which deal with bets placed after a sporting event has started, appear to be redundant.
11VAC5-70-220 – Integrity Monitoring
With respect to Section A, Caesars appreciates the inclusion of alternatives to membership in the Global Lottery Monitoring System (GLMS) for the purposes of integrity monitoring. The Sports Wagering Integrity Monitoring Association (SWIMA) is an industry-wide group providing integrity monitoring across multiple jurisdictions and operating entities, and most major sports wagering industry participants (including Caesars) are members. Most U.S. sports betting regulatory agencies are also aligned with SWIMA.
We suggest that the use in Section E of “immediately” be modified to “promptly” to account for practical concerns as well as later-discovered information.
We suggest that explicit authorization be provided in this section for operators to share information about suspicious or unusual activity across corporate enterprises and with other jurisdictions, in order to facilitate integrity monitoring.
11VAC5-70-230 – Investigations; Reporting
The proposed requirement in Section L that a regulated entity provide certain betting information to the Director “in real time” is impractical, of limited utility, and should be deleted.
The draft language in Section M with respect to real time data sharing with sports governing bodies raises a host of technology compatibility issues – merging of data streams across multiple operators and platforms – that will clearly be extremely costly (if not technologically impossible) to resolve, commercially unreasonable, and raise significant privacy, confidentiality, and security issues. We recommend thatthis section be amended to require the Director to consider “the commercial and practical reasonability” of a sports governing body’s request for real time data in determining whether and how this information must be provided.
11VAC5-70-240 – Advertising & Marketing
With respect to the requirement in Section A for the Director to pre-approve marketing and advertising, Caesars suggests that the Director provide a mechanism for approval of general advertising templates, and that compliance with the guidelines established by the Director will mean a presumption of acceptability. The guidelines should recognize that submission and approval of all marketing in advance is not only burdensome, but logistically impossible for events in which the participants are not determined until shortly before (for example, playoff series or championship games).
11VAC5-70-250 – Reporting Requirements
The requirements in Section B for “immediate” reporting to the Director should be changed to “promptly.”
11VAC5-70-280 – Geolocation System
The language in Sections A and B should not require operators to incorporate “the latest systems” in their geolocation systems. Instead, the standards for geolocation should be set by the Director, and the operator should ensure that its geolocation systems meet or exceed the standards.
Gaming Laboratories International, LLC (GLI) appreciates the opportunity to comment on the proposed rules regarding the regulation of sports wagering and looks forward to assisting the Virginia Lottery Board in further refining the details of these rules as well as provide recommendations on additional rules as seen fit. We hope the below feedback is useful and we are available at any time to clarify or further discuss any of the items presented below.
The GLI team agrees completely with principal objectives for sports wagering as stated by the Virginia Lottery Board – avoid overly-prescriptive rules, do not create a barrier to entry, ensure the integrity of sports wagering conducted in the state of Virginia and ensure player fairness.
The proposed rules were compared to existing sports wagering rules and regulations including, but not limited to, Tennessee, New Jersey, Washington DC, Indiana, and Iowa. The below comments were collected in effort to identify areas within the proposed rules that may warrant either additional clarification and or consideration.
While many of the comments are focused on layout of the document, others are focused on the content of the requirements themselves. Within this section is a list of some high-level comments.
Thank you for the opportunity to share our thoughts with the commission. Please let us know if we may be of any further assistance on this or any other matter.
Sincerely,
GAMING LABORATORIES INTERNATIONAL, LLC
Key: Recommended Modifications and Additional Rule Text Removals
11 VAC 5-60-10 Definitions |
GLI Recommendations |
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GLI recommends adding in definition of “voluntary exclusion program” from § 58.1-4002. |
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GLI recommends overall change from “self-exclusion” to “voluntary exclusion” throughout 11 VAC 5-60 to be consistent with what is laid out in § 58.1-4103. GLI also recommends moving the last sentence of the definition to 11 VAC 5-60-20.E |
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GLI recommends addition of Involuntary exclusion list based on what has been seen in other markets. |
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GLI recommends adding definition to cover all forms of gaming regulated by the Board. |
Key: Recommended Modifications and Additional Rule Text Removals
11 VAC 5-60-30 Exclusion Lists |
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Key: Recommended Modifications and Additional Rule Text Removals
11 VAC 5-60-40 Duties of the Permit Holder |
GLI Recommendations |
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GLI recommends
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Key: Recommended Modifications and Additional Rule Text Removals
11 VAC 5-60-50 Removal from Voluntary Exclusion List |
GLI Recommendations |
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GLI recommends allowance of online requests for removal. |
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GLI recommends adding “the Department of Agriculture and Consumer Services,” since fantasy contests, as mentioned in § 58.1-4015.1, are regulated by them. |
Key: Recommended Modifications and Additional Rule Text Removals
11 VAC 5-60-60 Forfeiture of Winnings by Excluded Individuals |
GLI Recommendations |
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GLI recommends
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Key: Recommended Modifications and Additional Rule Text Removals
11 VAC 5-60-NEW Individuals on the Involuntary Exclusion List |
GLI Recommendations |
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GLI recommends addition of Involuntary exclusion list based on what has been seen in other markets.
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Key: Recommended Modifications and Additional Rule Text Removals
11 VAC 5-70-10. Definitions |
GLI Recommendations |
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GLI recommends updating “adjusted gross revenue” to be closer to what is in § 58.1-4030, and adding definition of “gross revenue” from § 58.1-4030. |
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GLI recommends updating definition to be closer to what is in § 58.1-4030. |
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GLI recommends removal as Cashless Wagering Systems refer more towards casino gaming would not be used in an online only environment. |
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GLI recommends reference to § 58.1-4041 in this definition. |
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GLI recommends reference to § 58.1-4049 in this definition. |
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GLI recommends updating definition to be closer to what is in § 58.1-4030. As the vast majority of markets allow wagering on Olympic events, GLI recommends to put in a caveat as seen in other markets to only restrict access to Olympic events where the majority of participants are underage. |
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GLI recommends update based on what’s seen in other markets |
Key: Recommended Modifications and Additional Rule Text Removals
Key: Recommended Modifications and Additional Rule Text Removals
Key: Recommended Modifications and Additional Rule Text Removals
11 VAC 5-70-XXX Information Security System |
GLI Recommendations |
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A permit holder shall also implement, maintain, regularly review and revise, and comply with a comprehensive information security system, the purpose of which shall be to take reasonable steps to protect the confidentiality, integrity, and availability of personal information of individuals who place a wager with the permit holder, and shall contain administrative, technical, and physical safeguards appropriate to the size, complexity, nature, and scope of the operations and the sensitivity of the personal information owned, licensed, maintained, handled, or otherwise in the possession of the permit holder. |
GLI recommends adding based on what is allowed in other markets. |
Key: Recommended Modifications and Additional Rule Text Removals
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Original Section(s) |
11 VAC 5-70-140 Reserve, Insurance, and Banking Requirements |
GLI Recommendations |
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11 VAC 5-70-140.A 11 VAC 5-80-100.K |
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GLI recommends merging in Banking Requirements from 11 VAC 5-80-100.K and § 58.1-4034.I. |
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11 VAC 5-70-140.B |
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GLI recommends 4 and 5 become C and D to not be confused as a part of B. |
Key: Recommended Modifications and Additional Rule Text Removals
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Original Section(s) |
11 VAC 5-80-100 Security of Funds |
GLI Recommendations |
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11 VAC 5-80-100.C. |
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GLI recommends grouping of requirements from 11 VAC 5-80-100.C, 11 VAC 5-80-100.E, 11 VAC 5-70-160.J, and 11 VAC 5-70-160.K into a single section for Security of Funds GLI also recommends changes to 11 VAC 5-80-100.E’s text as while as these are common internal controls, they are not something which is explicitly displayed on the actual platform. |
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11 VAC 5-80-100.E |
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11 VAC 5-70-160.J. |
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11 VAC 5-70-160.K. |
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Key: Recommended Modifications and Additional Rule Text Removals
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Original Section(s) |
11 VAC 5-70-160 Audit, Financial, and Recordkeeping Requirements. |
GLI Recommendations |
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11 VAC 5-70-160.A |
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GLI recommends updates based on what has been seen in other markets, including a reference to GLI-33 as well as what operational aspects to consider for these audits. GLI also recommends moving requirements after 11 VAC 5-70-160.D to other sections (as indicated in the other recommendations) where they may fit better. |
Key: Recommended Modifications and Additional Rule Text Removals
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Original Section(s) |
11 VAC 5-70-230 Investigations; Reporting. |
GLI Recommendations |
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11 VAC 5-70-230.A |
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GLI recommends moving definition to 11 VAC 5-60-10 and replacing with requirement based on what has been seen in other markets |
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11 VAC 5-70-230.I |
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GLI recommends merging clauses with similar intent as well as changes to keep consistent with § 58.1-4044.A. GLI also recommends moving some items into Integrity Monitoring section and moving the remainder up after 11 VAC 5-70-230.A |
Key: Recommended Modifications and Additional Rule Text Removals
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Original Section(s) |
11 VAC 5-70-220 Integrity Monitoring. |
GLI Recommendations |
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11 VAC 5-70-220.A. |
A regulated entity |
GLI recommends these changes as the existing text mandates this for obtaining a license which can place a burden on smaller operators which does not exist in other markets. |
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11 VAC 5-70-220.B. 11 VAC 5-70-230.I |
A regulated entity shall, according to the integrity monitoring system procedures approved by the Director, have controls in place to identify and immediately report
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GLI recommends merging items 2-4 from 11 VAC 5-70-230.I into 11 VAC 5-70-220.B since they have similar intent as well as changes to keep consistent with § 58.1-4044.A. |
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11 VAC 5-70-230.K. |
A regulated entity shall, as soon as is commercially practicable, |
GLI recommends moving after 11 VAC 5-70-220.B as well as changes to keep consistent with § 58.1-4044.B. |
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11 VAC 5-70-230.L.
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A regulated entity shall share with the Director, upon request by the Director, in the form and format required by the Director and in real time and at the account level, information regarding a bettor, including the bettor's personal information, amount and type of wager, the time the wager was placed, the location of the wager, including the internet protocol address if applicable, the outcome of the wager, and records of abnormal, unusual, or suspicious wagering activity. A regulated entity shall maintain such records for at least five years after the related sports event occurs. |
GLI recommends moving after 11 VAC 5-70-220.B as well as changes to keep consistent with § 58.1-4034.B and C |
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11 VAC 5-70-230.M. |
If a sports governing body notifies the Director that real-time information sharing for wagers placed on its sporting events is necessary and desirable, and the Director determines in the Director’s sole discretion that real-time information sharing is necessary, a regulated entity shall, as soon as is commercially reasonable, share the same information required to be retained pursuant to subdivision B with the sports governing body or its designee with respect to wagers on its sporting events.
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GLI recommends moving 11 VAC 5-70-230.M after 11 VAC 5-70-220.B as well as changes to keep consistent with § 58.1-4034.D.1. |
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11 VAC 5-70-220.C. |
A permit holder shall ensure that its integrity monitoring system procedures provide for the sharing of information with each other permit holder. |
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11 VAC 5-70-220.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. |
GLI recommends moving last sentence to a Reporting Requirements section. |
Key: Recommended Modifications and Additional Rule Text Removals
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Original Section(s) |
11 VAC 5-70-230 Director Investigations |
GLI Recommendations |
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11 VAC 5-70-230.G. |
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GLI recommends
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11 VAC 5-70-230.J |
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11 VAC 5-70-230.H |
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Key: Recommended Modifications and Additional Rule Text Removals
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Original Section(s) |
11 VAC 5-70-170 Permissible and Prohibited Wagers. |
GLI Recommendations |
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11 VAC 5-70-170 |
A. A permit holder may accept a wager from a player on sporting events, including:
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It seems the second item should refer to before the event has started. GLI recommends that change from “after” to “before” as the next item which also states “after” is referring to in-play wagering.
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B. A permit holder may not accept a wager from a player on the outcome of a single game or match in which a youth sports or Virginia college sports team is a participant. This prohibition shall not be construed to prohibit betting on other games in a tournament or multigame event in which a youth sports or Virginia college sports team participates, so long as such other games do not have a participant that is a youth sports or Virginia college sports team. |
GLI recommends renumbering and adding to cover § 58.1-4039 |
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C. A permit holder may not accept a wager from a player on the outcome of an electronic sports event or competitive video game event that: 1. Is not sanctioned by a sports governing body or equivalent as an electronic competition; or 2. Has not been endorsed by the Department pursuant to the procedures set forth in subsection (D) of this section. |
GLI recommends adding to clarify allowance of esports. The definition of sporting event includes mention of “electronic sports event” or “competitive video game event” |
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D. A permit holder may not accept a wager from a player on the outcome of a virtual sporting event: 1. An approved cryptographic Random Number Generator is used to determine the outcome(s); 2. A video of the virtual sporting event is offered to all players which displays an accurate representation of the outcome(s) of the virtual sporting event; and 3. The virtual sporting event is approved pursuant to the procedures set forth in subsection (D) of this section. |
GLI recommends adding as a consideration for the allowance of virtual sporting events, which are computer simulations of real-world sporting events using a Random Number Generator in the selection of event outcome. |
Key: Recommended Modifications and Additional Rule Text Removals
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Original Section(s) |
11 VAC 5-70-170 Permissible and Prohibited Wagers. |
GLI Recommendations |
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E. A permit holder shall not accept any wager on a type of event unless it has received prior approval from the Department. F. A permit holder may petition the Department for approval of a new event upon which wagers may be placed or accepted. If a permit holder would like to offer a new category of event or wager type, they must submit a request to the Department using the Category of Sports Betting Request Form. 1. A proposed new event may be a variation of an authorized event, a composite of authorized events, or any other event compatible with the public interest and suitable for permit holder use. 2. A Category of Sports Betting Request Form shall include the following information: a. The name of the petitioner; b. Whether the new event or wager type is a variation of an authorized event, a composite of authorized event or wager type, or any other event or wager type compatible with the public interest and is suitable for permit holder use; c. A complete and detailed description of the new event or wager type for which approval is sought, house rules, and the manner in which wagers would be placed, payout information, source of the information used to determine the outcome of the sports wager, and any restrictive features of the wager d. A full description of any technology which would be utilized to offer the new event or wager type; e. Information or documentation which demonstrates that: i. The event could be adequately supervised; ii. The outcome of the event would be verifiable; iii. The outcome of the event would be generated by a reliable and independent process; iv. The outcome of the event would be unlikely to be affected by any wager placed; v. The event could be conducted in compliance with any applicable laws; and vi. The granting of the request for approval would be consistent with the public policy of the territory. f. Request for a test of the new event or wager type; g. Evidence of sports governing body rules and regulations or integrity monitoring of the new event; and h. Any other pertinent information or material requested by the Department. 3. The decision whether to grant approval to accept wagers on a new event or wager type shall be based on all relevant information including, but not limited to, the factors above. The Department may subject any technology that would be utilized to offer the event to such testing, investigation and approval process as he deems appropriate. 4. Any request for a new event or wager type must be submitted to the Department at least fourteen (14) days in advance of the proposed date of accepting wagers on such category of sports event or wager type 5. Upon approval of the new event or wager type, the Department shall provide public notice of such approval including any conditions and limitations placed on such approval. Such notice shall occur by publication on the Department’s website as close as practicable to the time at which the Department approves the new event or wager type. Thereafter, any permit holder may accept wagers pursuant to the approval and any conditions and limitations placed thereon. 6. If the Department determines, at any time, that approved rules are not adequate to ensure compliance with the regulations and this rule or the integrity of sports betting, then the Department may direct the permit holder to amend its rules. |
GLI recommends adding as seen in other markets. |
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11 VAC 5-80-90.4 |
E. All new |
GLI recommends moving 11 VAC 5-80-90.4 here and changing it to incorporate this screening into the review of new event or wager types. |
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F. The Department may use information received from the applicable sports governing body to determine whether to allow wagering on a particular event or players to make wagers of a particular type. |
GLI recommends adding as seen in other markets. |
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G. The Department reserves the right to prohibit the acceptance of wagers and may order the cancellation of wagers and require refunds on any event for which betting would be contrary to the public policies of the Commonwealth of Virginia. |
Key: Recommended Modifications and Additional Rule Text Removals
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Original Section(s) |
11 VAC 5-70-170 Permissible and Prohibited Wagers. |
GLI Recommendations |
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H. A sports governing body may notify the Department that it desires to restrict, limit, or prohibit sports betting on its sporting events by providing notice, in writing, in accordance with requirements prescribed by the Director. A sports governing body also may request to restrict the types of bets that may be offered. The Department shall grant the request upon a demonstration of good cause from the sports governing body. 1. To demonstrate good cause, the sports governing body shall bear the burden of establishing to the satisfaction of the Director that the relevant betting or other activity poses a significant and unreasonable integrity risk that is beyond the control of the sports governing body to preemptively remedy or mitigate 2. To ensure proper consideration, the request should be sent to the Department at least seventy-two (72) hours before the event. At any time, however, a sports governing body or equivalent should report information if it involves allegations of match-fixing, the manipulation of an event, misuse of inside information, or other prohibited activity. 3. The Department shall promptly review the information provided and respond as expeditiously as possible to the request concerning a particular event before the start of the event or if it is not feasible to respond before the start of the event, as expeditiously as possible. 4. The Director shall seek input from affected permit holders and may consult with an independent integrity monitoring provider and other jurisdictions before making a determination on such request. 5. If the Director grants a request, the Board shall promulgate by regulation such restrictions, limitations, or prohibitions as may be requested. 6. If the Director denies a request made, the Director shall give the requester notice and the right to be heard and offer proof in opposition to such determination in accordance with regulations established by the Board. |
GLI recommends adding as seen in other markets and to cover § 58.1-4039. |
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I. For the purpose of offsetting player wagers, a permit holder may place a layoff wager with another licensed permit holder that conforms with all federal and state law requirements provided: 1. The Director determines that layoff wagers may be placed and accepted under the law. If layoff wagers are permitted, they must be placed and accepted in accordance with any other procedures or conditions prescribed by the Director; 2. The permit holder placing the layoff wager informs the permit holder receiving the layoff wager that the wager is being placed by a permit holder and discloses its identity; 3. The receiving permit holder, in its discretion, agrees to accept the layoff wager after receiving notification of the identity of the permit holder placing the layoff wager. The receiving permit holder may decline to accept a layoff wager in its sole discretion; 4. Each layoff wager is reported to the Department in such manner as the Director may direct; and 5. The amounts of wagers placed by a permit holder and the amounts received by the permit holder as payments on such wagers will not affect the computation of the permit holder’s gross revenue. |
GLI recommends adding requirements for Layoff Wagers as seen in other markets. |
Key: Recommended Modifications and Additional Rule Text Removals
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Original Section(s) |
11 VAC 5-70-190 Use of Official League Data. |
GLI Recommendations |
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11 VAC 5-70-190.A |
A permit holder shall report to the Director the data source that they use to resolve sports wagers. The Director may disapprove of the alternate data source for any reason, including but not limited to, the type of wager and method of data collection. |
GLI recommends moving definition to 11 VAC 5-70-10 and replacing 11 VAC 5-70-190.A with text for alternate data sources as seen in other markets. GLI also recommends adding from § 58.1-4034.H and § 58.1-4036. |
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11 VAC 5-70-190.B |
A permit holder may use any data source for determining the result of a tier 1 bet. Unless a sports governing body, pursuant to this section, has requested that permit holders use official league data to settle tier 2 bets, a permit holder may also use any data source for determining the result of a wager. A permit holder shall not purchase or use any personal biometric data unless the permit holder has received written permission from the athlete's exclusive bargaining representative. |
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11 VAC 5-70-190.C |
A sports governing body may submit a request to the Director to require permit holders to use official league data to settle |
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11 VAC 5-70-190.D |
A sports governing body may submit a request under subsection C. only in the form and format required by the Director. The Director shall notify each permit holder of the sports governing body's notification within five days after the Department's receipt of the notification. |
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11 VAC 5-70-190.E |
Within 60 days after notification from the Director to do so, permit holders shall use only official league data to determine the results of tier 2 bets |
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11 VAC 5-70-190.F |
Subsection E. shall not apply if: 1. The sports governing body is unable to provide, on commercially reasonable terms as determined by the Director, a feed of official league data; or 2. The sports governing body is unable to provide a feed, on commercially reasonable terms, of official league data to determine the results of a tier 2 bets, in which case permit holders may use any data source for determining the results of tier 2 bets until the data feed becomes available on commercially reasonable terms. 3. 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: 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 data 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. Any other information the Director requires. |
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11 VAC 5-70-190.G |
While 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 tier 2 bets |
Key: Recommended Modifications and Additional Rule Text Removals
11 VAC 5-70-200 System Integrity and Security Assessment. |
GLI Recommendations |
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GLI recommends updating the section based on what has been seen for other markets. This will also allow for new operators to commence operations without having to wait for their first assessment to be completed. |
Key: Recommended Modifications and Additional Rule Text Removals
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Original Section(s) |
11 VAC 5-70-240 Advertising and Marketing. |
GLI Recommendations |
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11 VAC 5-80-150.B 11 VAC 5-70-240.H |
An advertisement for sports betting may not
Incidental depiction of nonfeatured minors or students shall not be deemed a violation of this subsection. |
In general, GLI recommends consolidating 11 VAC 5-80-150, 11 VAC 5-80-160 into 11 VAC 5-70-240. GLI recommends change to “feature” to match the sentence which follows and to merge in part of 11 VAC 5-70-240.H. GLI also recommends changes to focus on what activities are prohibited (Virginia college sports and youth sports) |
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11 VAC 5-80-150.C |
An advertisement for sports betting shall not state or imply endorsement by:
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11 VAC 5-80-150.E |
An advertisement for sports betting in published media shall include information concerning assistance available to at-risk or problem bettors, or direct consumers to a reputable source, |
GLI recommends removal of text as the second sentence implies the same as the first. |
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11 VAC 5-70-240.H |
Advertising, marketing, and promotional materials may not |
GLI recommends removal of text as it’s being covered in 11 VAC 5-80-150.B. |
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11 VAC 5-70-240.Q |
Advertising, marketing, and promotional materials shall reflect generally accepted contemporary standards of good taste. |
GLI recommends either removal or further information to be provided on “generally accepted contemporary standards of good taste” |
Key: Recommended Modifications and Additional Rule Text Removals
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Original Section(s) |
11 VAC 5-80-140 Promotional offers |
GLI Recommendations |
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11 VAC 5-80-140 |
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GLI recommends changing “user” to “player” |
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11 VAC 5-80-90.7 |
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GLI recommends moving after 11 VAC 5-80-140.B from 11 VAC 5-80-90.7 |
Key: Recommended Modifications and Additional Rule Text Removals
11 VAC 5-70-XXX Marketing and Branding |
GLI Recommendations |
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GLI recommends adding regulations from § 58.1-4034.G |
11 VAC 5-60-20 Request for self-exclusion
B. …Notwithstanding the above, if an individual requests to be placed on the Internet self-exclusion list for life, such request shall be made in person at Department headquarters or any other location specified by the Department.
C. An individual requesting placement on the self-exclusion for life list shall submit, in person, a completed request for self-exclusion as required by this chapter…
Comment: Is the expectation that in order for an individual to self-exclude that the individual must first create an account and then perform the self-exclusion from within the account? We welcome that requirement, but we also ask the Department consider allowing individuals to self-exclude in-person at the Department headquarters for two-year, five-year, and lifetime. Reading 11 VAC 5-60-20(C), it appears as though the Department will only processes lifetime exclusions in-person; whereas, reading 11 VAC 5-60-50, the Department requires in-person appearance for the processing of requests to be removed from the two-year and five-year. If removal requires in-person appearance, we also ask that and individual be given the option to self-exclude in-person at the Department headquarters. While we understand the efforts to create an effective responsible gaming program, we also understand that in-person appearance may not be possible due to any number of constraints (geographic location or access to transportation or health/mobility), so we ask the Department to consider allowing for the automatic removal upon the conclusion of an exclusion period should certain factors, as determined by the Director, be met.
F. An acknowledgment that the Department shall coordinate the administration of the self-exclusion program with the Office of Charitable and Regulatory Programs and the Virginia Racing Commission pursuant to procedures developed by the Department.
Comment: Is there a reciprocal agreement from the Office of Charitable and Regulatory Programs and the Virginia Racing Commission to share their self-exclusion lists, if any, to the Department? Is it expected or required that a permit holder or system provider who has players in both the Lottery and Racing Commission exclude patrons from all of its platforms?
11 VAC 5-60-30 Self-exclusion list
A. The Department shall maintain the official self-exclusion list and shall transmit notification of any addition to or deletion from the list to:
(i) each holder of a permit to operate a sports betting platform;
(ii) the Office of Charitable and Regulatory Programs; and
(iii) the Virginia Racing Commission.
Comment: Is there a reciprocal agreement from the Office of Charitable and Regulatory Programs and the Virginia Racing Commission to share their self-exclusion lists, if any, to the Department? Is it expected or required that a permit holder or system provider who has players in both the Lottery and Racing Commission exclude patrons from all of its platforms?
11VAC5-70-10. Definitions.
“Sports betting” means placing wagers on professional sports, college sports, sporting events, and any portion thereof, and includes placing wagers related to the individual performance statistics of athletes in such sports and events. “Sports betting” includes any system or method of wagering approved by the Director. “Sports betting” does not include placing a wager on a college sports event in which a Virginia public or private institution of higher education is a participant, nor does “sports betting” include placing a wager on sports events organized by the International Olympic Committee.
Comment: So as not to frustrate the oversight of the Virginia Racing Commission, we ask that wagers on horse racing be prohibited, regardless of the system or method of wagering. In addition, we echo the comments of others that “sports betting” should include sports events organized by the International Olympic Committee, and that the modifier of “and other events” be included in the definition of “sports betting” so as to give the Director the flexibility in the future to allow permit holders to offer and accept wagers on quasi-sporting events like the Heisman Memorial Trophy and non-sporting events like the Academy Awards.
In addition, we request the Department maintain a master catalog of approved events, propositions, and systems/methods of wagering similar to that of the Colorado Division of Gaming, or, in the alternative, allow each permit holder to determine its own catalog in the same manner licensees in Nevada do and without the need for the permit holder to obtain prior approval from the Department to offer events that are not otherwise expressly prohibited by regulation (11VAC5-70-170. Permissible Wagers makes no mention of a catalog).
“Sports governing body” means an organization, headquartered in the United States, that prescribes rules and enforces codes of conduct with respect to a professional sports...
Comment: Why does the organization need to be headquartered in the US? How does FIFA or Premier League or Canadian Football League fit into that definition?
11VAC5-70-20. Application Process.
Comment: We ask the Department to consider accepting Multi-Jurisdictional applications for principal individuals, available through the International Association of Gaming Regulators, as an alternative to a Virginia Lottery-specific application for principal individuals.
11VAC5-70-50. Sports Betting Permit Applications.
P. The application shall disclose all principal entities of the applicant.
V. Prior to issuance of a permit, an applicant awarded a permit shall pay to the Lottery a nonrefundable permit issuance fee of $250,000.
Comment: It is common that a principal entity has one or more wholly owned subsidiaries, of which, one may be a Sports Betting Permit Applicant. We ask that only the entity applying for the permit be required to pay the permit issuance fee and that fee is not required of parent companies or subsidiaries of any other principal entity than the applicant. Reading 11 VAC 5-70-60, it is unclear as to whether a “principal application” is reserved for individuals or if it also applies to “persons” as defined in 11VAC5-70-10.