Original Section(s)

11 VAC 5-70-140 Reserve, Insurance, and Banking Requirements

GLI Recommendations

11 VAC 5-70-140.A

11 VAC 5-80-100.K

1. A permit holder shall maintain a reserve in the form of cash, cash equivalents, 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 and sufficient to pay all prizes and awards offered to a winning player. 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. Permit holders shall at all times also maintain cash reserves in amounts to be established by Board regulation

GLI recommends merging in Banking Requirements from 11 VAC 5-80-100.K and § 58.1-4034.I.

11 VAC 5-70-140.B

2. The amount in the reserve fund shall be at least $500,000 and equal or exceed the aggregate sum of:
   1. Funds held by the permit holder in player accounts;
   2. The total amount of funds accepted by the permit holder as wagers on sports events with outcomes that have not been determined; and
   3. Money owed but unpaid by the permit holder to players on winning wagers.
3. 4. All reserve funds shall be held with a financial institution federally insured by the FDIC and licensed to transact business in the Commonwealth of Virginia.
4. 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 hours and identify the steps taken to remedy the deficiency.

GLI recommends 4 and 5 become C and D to not be confused as a part of B.