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.
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[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.
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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.”