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8/25/20  3:30 pm
Commenter: DraftKings

DraftKings Comments on VAC 5-80 Sports Betting Consumer Protection Program (Sections 60-90)
 

DraftKings Comments on VAC 5-80 Sports Betting Consumer Protection Program (Sections 60-90)

PLEASE NOTE text in underlined bold denotes an insertion and text between [brackets] denotes a deletion.

11 VAC 5-80-60           Compliance with tax laws; disclosure

A permit holder shall comply with all applicable tax laws and regulations, including laws and regulations applicable to tax reporting [withholding] and laws and regulations applicable to providing information about winnings [and withholdings] to taxing authorities and to sports bettors.

DraftKings respectfully requests the above modification to align this requirement with Article 2 of the Virginia Lottery Act. Both federal law and Article 2 of the Virginia Lottery Act require operators to report taxes and issue necessary forms, however the law does not require permit holders to withhold taxes.  DraftKings respectfully suggests that this language be changed to be consistent with § 58.1-4034., which requires permit holders to “Provide for the issuance of applicable tax forms to persons who meet the reporting threshold for income from sports betting.”

11 VAC 5-80-70           Excluded individuals

A. A permit holder shall take such actions and establish such procedures as may be necessary to identify and report to the Department any activity prohibited by Article 2, Chapter 40 (§ 58.1-4041) of Title 58.1 of the Code of Virginia. Such actions and procedures include, but are not limited to:

2. Making commercially reasonable efforts to exclude [obtain lists of] individuals prohibited by the sports betting law from participating in sports betting.  The Department shall maintain and distribute such lists to permit holders for the purpose of monitoring for and excluding such individuals from platforms operated by the permit holder.

DraftKings respectfully suggests that the Department maintain lists of restricted and excluded persons to distribute to permit holders.  Requiring each permit holder to separately compile such lists will lead to many different lists of varying degrees of accuracy and comprehensiveness, potentially inviting restricted or excluded customers to shop around for platforms where the operator’s commercially reasonable efforts did not result in their exclusion.  Section 58.1-4041 of Article 2 of the Virginia Lottery Act outlines groups of persons prohibited from sports betting; subsections (A) (1) (lottery employees) and (C) (classes of individuals related to professional or college sports) are particularly difficult to identify for sports betting operators, without being provided lists of prohibited participants outlined in these two subsections. The Lottery and individual leagues and teams should have a duty to regularly supply updated information to the Department which will then disseminate such lists to permit holders for accurate, comprehensive, and consistent restrictions.

B. A permit holder, upon learning of a violation of Article 2, Chapter 40 (§ 58.1-4041) of Title 58.1 of the Code of Virginia, shall immediately bar an individual committing the violation from participating in, or disclosing proprietary or nonpublic information about, sports betting by:

1. Banning the individual committing the violation or disclosing or receiving prohibited information, from all sports betting platforms operated by the permit holder;

DraftKings respectfully requests the above modifications be adopted to align the requirement to the definitions found in 11 VAC 5-80-10.

11 VAC 5-80-80           Corporate responsible gambling policies

A. A permit holder shall maintain an up-to-date [, easily visible website link to its] corporate policy on responsible gambling.

DraftKings respectfully requests the above modification be adopted to reflect that the requirements in this section pertain to internal corporate policies addressing staff responsibilities and employee training as they relate to responsible gaming, rather than customer-facing responsible gaming measures.  While it is appropriate for the regulator to ensure that each permit holder has robust internal responsible gaming policies, posting these documents publicly does not assist customers with problem gaming concerns and is more likely to frustrate those consumers seeking out information and assistance to address their own problem gambling concerns. DraftKings respectfully suggests that the Department should require permit holders to maintain a corporate policy internally which shall be available to the Department, however any consumer-facing information shall be tailored to the responsible gaming needs of individual consumers.

B. Each permit holder’s corporate policy should address the following:

2. Responsible gambling strategy with defined goals [and a clear plan of action];

DraftKings respectfully requests the above language be removed as it is vague and subjective. The term “a clear plan of action” is difficult for permit holders to describe in a policy without additional information. Furthermore, as stated above the internal corporate policy should be distinct from the consumer-facing information made available to customers to assist with customer problem gambling concerns.  DraftKings respectfully suggests that information available to users on a responsible gaming page should include the permit holder’s commitment to responsible gaming, ensuring individuals bet safely and responsibly, providing contact information for responsible gaming help, setting limits, self-excluding from the sports betting platform, and preventing underage betting. We believe this type of information is sufficient to demonstrate a responsible gaming strategy to users while actively assisting them with any concerns. 

B. Each permit holder’s corporate policy should address the following:

[3. Senior executive staff members are accountable for responsible gambling policies and programs;]

As stated above, DraftKings respectfully suggests that naming the accountable staff members is more appropriate for an internal corporate policy rather than a public-facing one. DraftKings respectfully requests the above section be removed as it pertains to a public disclosure requirement. While we recognize the importance of having executive commitment to responsible gaming, naming a specific executive at the company in a public-facing webpage does not help individuals with responsible gaming. While at most companies, there are parties accountable for various corporate policies on internal documents, we do not feel disclosing this information makes a material difference to an individual sports bettor in Virginia and believe that because of turnover at different positions, it is not relevant.

B. Each permit holder’s corporate policy should address the following:

6. Measures to ensure staff understand the importance of responsible gaming and are knowledgeable about their role and the company’s expectations of their actions. Such measures should include:

h. Making reasonable efforts to ensure [T]the training program and/or evaluation is informed by evidence-based research [the best available evidence].

DraftKings respectfully requests the above modifications are made to set manageable expectations for permit holders to maintain their training and evaluation program. In requiring a training and/or evaluation program be informed by “best available evidence,” it creates a subjective standard. Instead, we propose changing that standard to “evidence-based research,” which will address the regulatory intent of requiring permit holders to continue to update their training programs and evaluations. Based on the above reasons, we request that a more manageable and less subjective standard be adopted to maintain our training and evaluation program.

11 VAC 5-80-90           Sports betting platform features

2. Provide features [Ample opportunities] for a player to take note of the passage of time

DraftKings respectfully requests that the above modifications be adopted to provide more guidance on how to satisfy this regulation. Providing features to meet this requirement is an actionable requirement that operators can comply with. Examples of features might include a regular pop-up notice or a session timer so at any time an individual can see how long they have been in an active session.

[3. Game designs that promote breaks in play and avoidance of excessive play]

[4. All new games and technology are screened for adherence to responsible gaming standards]

DraftKings respectfully requests the above sections be removed, as they are not applicable to sports betting. Bettors make bets on different fixed odds wagering events, they do not play “games,” therefore these requirements on designing and screening new games are not applicable.

[8. Notification to players of age-verification procedures]

DraftKings respectfully requests that the above section be removed as it is a step that takes place upon account registration and not a “feature” of a sports betting platform.

11. Games display credits/spending as cash except when bets are placed utilizing a permit holder’s bonus or loyalty program, if applicable.

DraftKings respectfully requests the above modifications to clarify that permit holders may offer bonus and loyalty programs. There are instances where a bonus or loyalty program will provide bonus or loyalty rewards that are not directly one-for-one transferrable to dollars, similar to how hotel and airline bonus and loyalty programs work, however, when bettors use those bonus programs to place bets, their bet tickets will display the amount bet and potential winnings as cash. Sports betting operators also clearly describe and disclose how these loyalty programs work. For these reasons, we respectfully request the above language is adopted to allow permit holders to offer the same bonus and loyalty programs they offer in other sports betting jurisdictions.

CommentID: 84231