Currently sports gambling is legalized in both WV and DC.  It's silly to have to drive across borders to place a legal sports wager in this day and age.  Further, there are difficulties in funding an account on the DC Gambet online platform.  Their preferred funding is via online bank Skrill, which has proven to be awful at best.  Skrill does not readily accept direct transfers, it has failed to verify bank accounts, and when funds are transferred from their preferred bank (Bank of America) to Skrill the funds get lost.  Do NOT allow SKRILL to be the online banking platform!  My preference would be to allow cash to be deposited into the sports gambling account at any brick and mortar site providing lottery sales within VA.  I am happy to be a point of contact for issues related to the online sports gambling activities.  Feel free to reach out to me for further information.

I think you should legalize gambling because not only will it bring more revenue to the state but it would also bring more tourist to Virginia. More people leads to more things being bought which should also lead to more revenue. As you see gambling is a gateway to a prosperous state.

Most online sportsbooks and casinos have promos such as sign up and receive $20 in free play.

Often, the terms and conditions are not made clear. Example: I sign up for a sports betting website because it says I will reive $20 in freebetting. Now, I might think once I wager $20 I can withdraw the winnings or remaining amount. Often, this is not the case. Often there is a hidden requirement to wager that $20 10 or even 20 times.

I simply ask that it be required for the protection of the consumer that such terms and conditions be made clear and prominent on the same webpage as the promo and not hidden elsewhere on the website.

Many online sportsbooks have fast deposit options. Options that allow you to transfer your money to them immediately without delay.

When you try to withdraw your winnings this is often a very different story. Often it takes days to electronically withdraw your money, which is utter nonsense. I ask that an option must be available for immediate withdrawal if such option is available for deposit.

Sportsbook operators have been known to unilaterally refuse to take bets from customers who are consistent winners.

This creates a no-win situation for bettors. Either you lose money, or you are cut off from any chance of winning, once you start to win.

Suggest you have a regulation to the effect that if an operator wants to restrict a customer's bet amounts, or deny them the right to make any bets at all, that the burden of proof is on the operator to show why this is justified.

If the operator ignores these regulations and denies customers the right to bet unilaterally, suggest they be made to make cash reparations to the customers.

I strongly concur with Adam Whit's comments.

Operators should be required to make withdrawal transfers immediately on-demand, such that they are credited to a customer's bank account instantly.

Promo terms are often misleading, such as "free plays" which are designed so that they can never be cashed out. Operators should be required to state them clearly and unequivocally, giving concrete examples of how they work.

I have been waiting for years to use sports betting apps such as Draft King’s (Sportsbook) and Fan Duel in Virginia. As it was legalized July 1, 2020, many people are hopeful that we can use this apps to place bets on sports in Virginia as soon as possible, hopefully by the end of this year. Thank you. 

The Virginia Lottery should require that every sportsbook allow for the option to have withdrawals deposited instantly into a players bank account. Lyft and Uber allow this option to their drivers for a $0.50 fee and Apple Cash has the same option for a 1% fee with a $10 max allowable service fee. I recommend this option be required with a service (convenience) fee of $1 no matter the requested withdrawal amount. Also there should be no limit on withdrawal amounts. There should also be no limit on the number of requested withdrawals within a specific timeframe. Limiting withdrawals to once a day/week/month should not be allowed. It’s the players money and they should have access to it immediately upon request. 

Sports Books should not be allowed to ban players just because they win more than they lose. When Operators get to pick and choose their players based on skill, that goes against integrity and transparency. New Jersey does not allow Books to do this. Virginia should adopt this as well.

I commend the State and its Legislators for having this Town Hall. Lastly, I firmly believe any State allowing this is wrong and turns the right to wager on sports into simply another tax.

Also William Hill Sportbooks are notoriously known for this practice.

Agree that operators should have speedy withdrawal options. In many jurisdictions they take your money instantly, but take from three days to over a week to let the customer withdraw. Banks don't do this, Sportsbooks should not be allowed either. 

Also concur with point brought up previously that promotional bonuses and free plays should terms should be stated clearly. Too many online Sportsbooks and Casinos have additional info boy the promotion in fine print, and these are many times unattainable. Many of the best operators rarely offer bonuses or free plays. And when they do offer these, the rules are clear.

The Pricing of the wager(vigorish) should be in the 10cent range to be fair to the bettor and thus will lead to the over all success of Sports Betting in VA. Virginia has already set the taxation equitably, yet many Sports Books want to come in to a new municipality and set high prices to take advantage of the inexperienced. This is bad for the citizen and for the State, because if an individual feels he or she has no chance, then this won't viable long term.

Washington DC Intralot online sporstbook is one of the most egregious examples of high prices. Some Books in New Jersey and Pennsylvania are much better models. (Nevada as well.)

Recommend Adoption of GLI-33 as a baseline for a Technical Standard. Many states have adopted it so the adoption of GLI-33 will easily enable transferability of product to the market.

Comments on Draft Virginia Sports Betting Regulations

Caesars Entertainment

August 10, 2020

11VAC 5-60 – Self-exclusion program

11VAC 5-60-20 Request for self-exclusion

Section B here requires an individual requesting placement on the self-exclusion list for sports betting to make this request “through his or her Internet gaming account.” This language is unnecessarily restricting, and requires a customer to access the very service he does not want to access in order to make the request. This is akin to requiring an individual to enter a casino in order to ban himself from a casino. We believe that adding language akin to “or through other means approved by the Department” would provide needed flexibility here. We would strongly suggest that the Department itself provide such a means through its website.

11VAC 5-60-30 Self-exclusion list

Language should be added to Section D that allows a sports betting permit holder to share information about an individual who has requested self-exclusion across its enterprise in order to implement corporate policies that extend self-exclusion to multiple or all of the jurisdictions where it operates, inclusive of online sports betting or igaming sites. Language indicating that permit holders may enforce this option should be included in the self-exclusion request form and acknowledgment statement that self-excluded individuals in Virginia are required to sign.

11VAC 5-70 – Sports Betting

11VAC 5-70-10. Definitions

The definition of “sports betting” should eliminate the language prohibiting “placing a wager on sports events organized by the International Olympic Committee.” A prohibition on betting on Olympic sports is not contained in the Virginia sports betting statute, and there is no valid public policy objective that is served by this prohibition. Its imposition simply channels wagering activity on Olympic sports to other states where such betting is permitted or to illegal bookmakers, defeating the fundamental purpose of legalized sports wagering in increasing transparency of such activity and affording it consumer protections.

Language should be added to the definitions of “sports event” and “sporting events” providing additional flexibility, such as “or other competitive events or contests on which betting has approved by the Department.”

Also, the definition of “Sports betting employee” should be restated to mean “an individual who does not meet the definition of Principal and works within the borders of the Commonwealth for a permit holder, sports betting supplier, or vendor of non-management support services such as software or hardware maintenance, provision of products, services, information or assets, directly or indirectly, to the permit holder, in each case having the power to exercise a significant influence over decisions concerning any part of the operation of sports betting, including but not limited to the sports betting platform or any components thereof.”  This definition would more closely track “key employee” and similar terms used in other jurisdictions to denote those employees who warrant licensing and exclude employees who have no role or involvement in the regulated wagering activity.  

11VAC 5-70-20 Application Process

There is a typographical error in the draft regulation, with two section E.5’s.  The second should be renumbered as E.6.

We also suggest the addition of a new E.7, which would state: “Upon final action on an application for which administrative costs were assessed to the applicant, the Director shall give to the applicant an itemized accounting of the costs incurred.” This type of provision is not uncommon in state gaming regulation. 

11VAC 5-70-60 Sports betting permit applications

Section T.5. requires the Department to consider in awarding a permit “The amount of adjusted gross revenue and associated tax revenue that an applicant is expected to generate.” Given the uncertainty at the time of permit application concerning how many permits will be awarded, it will be difficult if not impossible for both applicants and the Department to make precise revenue estimates for an individual prospective permit holder. We recommend that Section T.5. be eliminated. The requirement in Section T.2. requiring the Department to consider “success with sports betting in other states” is appropriate, combined with what we would propose as an additional requirement that the Department consider “the business plan of an applicant to maximize adjusted gross revenue and associated tax revenue.”

11VAC 5-80 -- Sports Betting Consumer Protection Program

11VAC 5-80-10 Definitions

The definition of “sports betting” should eliminate the language prohibiting “placing a wager on sports events organized by the International Olympic Committee.” A prohibition on betting on Olympic sports is not contained in the Virginia sports betting statute, and there is no valid public policy objective that is served by this prohibition. its imposition simply channels wagering activity on Olympic sports to other states where such betting is permitted or to illegal bookmakers, defeating the fundamental purpose of legalized sports wagering in increasing transparency of such activity and affording it consumer protections.

11VAC 5-80-20 Sports bettors’ bill of rights

The language in Section C.1. requiring that information related to “the handle of the bet” and “the information used to calculate those odds” be provided should be eliminated. Knowing “the handle of the bet” does not provide any information relevant to making informed decisions about gambling and would be considered proprietary information. No jurisdiction we are aware of has such a requirement. Furthermore, a requirement to provide “information used to calculate those odds” is impossibly cumbersome and similarly involves disclosure of proprietary information. While it may be appropriate for permit holders to provide information generally on how odds are set, this information should be part of general consumer education and not made specific to particular contests or betting opportunities.  

Lastly, the requirement to publish “the odds of winning the bet” also should be removed.  It is unnecessary and potentially confusing.  Sports bets “odds” are reflected in the “line” offered, which is an intrinsic aspect of the bet.  Put another way, the terms of the bet are, in fact, the “odds.”  There can be no bet without the “odds” associated with it. To the extent that is all that the language is intended to encompass, it is not needed.  If something more is intended, the language needs to be clarified to identify precisely what that would be and to explain why it would be useful or necessary. 

11VAC 5-80-50 Underage betting

Item A.1 - 1. Providing a verification form to be signed by the individual and returned to the permit holder by postal mail, facsimile, or electronic scan; should be expanded, or an item 6. added, to be able to verify their identity via an online “Know Your Customer” (KYC) process. This would mimic existing registration and identity verification procedures for mobile casino/sportsbook/poker in IN, NV, NJ, PA, etc.

Item C. C. A permit holder shall make available, prominently publish, and facilitate parental control procedures to allow parents or guardians to exclude minors from access to any sports betting platform.  Strike or amend for clarity. It is unclear how this could be reasonably set up in practice. If the KYC identify verification is in place, this would be moot. A minor would fail KYC using their correct identity information. If they intended unauthorized use (i.e., pretending to be the parent), they would have to know their SSN.

11VAC 5-80-80 Corporate responsible gambling policies

Item B. 3. Senior executive staff members are accountable for responsible gambling policies and programs -- We recommend striking, modifying, or giving a detailed explanation of “accountable” - is this simply a matter of ensuring that permit holders have policies in place? Or does the Department contemplate seeking damages if an excluded player continues to wager due to a platform malfunction, for example?

11VAC 5-80-90 Sports betting platform features

Item 2. (“Ample opportunities for a player to take note of the passage of time”). Should be deleted. The vast majority of customers will access the platform through a mobile device or computer that already provides “ample opportunities for a player to take note of the passage of time.” This should not be a required feature of a sports betting platform.

Item 3 (“Game designs that promote breaks in play and avoidance of excessive play”) should be replaced with language indicating that sports betting platforms must incorporate opportunities for players to choose “cooling off” or other time limits and set limits on deposits/wagers. These features should not be considered “game designs.”

Item 4 (“All new games and technology are screened for adherence to responsible gaming standards”) should be eliminated. The Department should have the authority to determine if games or technologies are inappropriate for responsible gaming-related reasons, but a blanket requirement for each permit holder to screen “all new games and technology” is over-broad and over-burdensome.

11 VAC 5-80-120 Protections for at-risk or problem bettors

Section 3., in reference to third-party requests for exclusion, should be modified to require permit holders to “evaluate” third party requests, not to blanket “honor” them. We understand how problem gambling affects individuals beyond gamblers themselves, and we understand the difficulties it can specifically cause for family members. But giving third parties broad authority to exclude or set limits for others will undoubtedly be misused. A more reasonable approach would be to identify the kinds of considerations permit holders should use in evaluating third party requests, and require permit holders to periodically report to the Department the results of these evaluations. Ultimately, the decision to gamble or not gamble, or how much or how little to gamble, is the responsibility of the gambler. Indeed, taking personal responsibility for one’s own gambling decisions is a hallmark of both healthy play as well as recovery from a gambling problem. We are aware of no jurisdiction in the United States that addresses third party exclusion requests in the way contemplated in these draft regulations.

11 VAC 5-80-150 Advertising in general

The language in ALLCAPS should be added to Section B: “Incidental depiction of nonfeatured minors OR STUDENTS shall not be deemed a violation of this subsection.”

The following language in Section E. should be eliminated: “If an advertisement is not of sufficient size or duration to reasonably permit inclusion of such information, that advertisement shall refer to a website, application, or telephone hotline that does prominently include such information.” The preceding sentence provides necessary guidance on responsible gaming taglines/captions.

VIRGINIA SPORTS BETTORS’ BILL OF RIGHTS

Section I.

Language requiring that information related to “the handle of the bet” and “the information used to calculate those odds” be provided should be eliminated. Knowing “the handle of the bet” does not provide any information relevant to making informed decisions about gambling and would be considered proprietary information. No jurisdiction we are aware of has such a requirement. Furthermore, a requirement to provide “information used to calculate those odds” is impossibly cumbersome and similarly involves disclosure of proprietary information. While it may be appropriate for permit holders to provide information generally on how odds are set, this information should be part of general consumer education and not made specific to particular contests or betting opportunities.

LIQUIDITY SHARING

Section 58.1-4045 of the Virginia Code authorizes the Lottery Board to “promulgate rules authorizing permit holders to offset loss and manage risk, directly or with a third party approved by the Director, through the use of a liquidity pool in Virginia or another jurisdiction so long as such permit holder, or an affiliate of such permit holder, is licensed by such jurisdiction to operate a sports betting business. However, a permit holder's use of a liquidity pool shall not eliminate its duty to ensure that it has sufficient funds available to pay bettors.”

We respectfully request that the regulations be amended to add a provision to accomplish the foregoing, along the following lines:

“A permit-holder may share in a liquidity pool with one or more affiliates of the permit-holder licensed to accept sports wagers in other jurisdictions so long as those affiliates remain licensed in good standing in those jurisdictions; provided that the use by the permit-holder of such liquidity pool shall not eliminate its duty to ensure that is has sufficient funds available to pay its sports bettors.”

###

DraftKings Inc., a leading sports betting operator in ten states in the U.S., hereby submits comments on the licensing and consumer protection provisions addressed in the first round of proposed sports betting regulations issued on by the Lottery on July 15, 2020.  Recognizing that the Department has a limited period of time to review and consider proposed changes, DraftKings submits these initial sets of comments to allow ample time for the Department to consider incorporating changes. DraftKings anticipates submitting additional comments on the provisions released on August 10 in the near future.  Thank you for your consideration.

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

DraftKings Comments on 11 VAC 5-60 - Self-Exclusion Program

11 VAC 5-60-20           Request for self-exclusion

D. A request for self-exclusion shall be in a form prescribed by the Department, which shall include:

[(1)(vi). A physical description of the individual, including height, weight, gender, hair color, eye color, and any other physical characteristic that may assist in the identification of the individual;]

DraftKings respectfully requests the above language is removed, as a physical description may be difficult to ascertain in a mobile setting and serves little corresponding benefit in identifying self-excluded persons from a mobile product.  Additionally, requesting too much information may make users less likely to complete the process, thus defeating the purpose of aiding consumers. DraftKings respectfully suggests striking the requirement to obtain information related to physical description when a customer self-excludes.

2. The length of self-exclusion requested by the individual:

1. [Two]  One year[s]; or
2. Five years[; or]
3. [Lifetime.]

DraftKings respectfully suggests that the minimum period that users may elect to self-exclude statewide is one year instead of two.  We believe that this strongly protects users while being consistent with other states in which permit holders may operate, such as New Jersey and Pennsylvania.  Consistency with requirements across states allows sports betting operators to more seamlessly implement these requirements.   DraftKings further suggests clarifying that the lifetime exclusion option does not need to be provided in an online form, since lifetime exclusion is required to be requested in person pursuant to 11 VAC 5-60-20 B. and C.

H. For Internet self-exclusion submissions: The Internet gaming system shall provide a link within the player’s Internet gaming account directly to an Internet self-exclusion application form and provide to the self-excluding individual for his or her acknowledgment the following statement…

DraftKings respectfully suggests that the Department host and make available the online form that permit holders may link to so that users may engage in the self-exclusion process directly with the state, ensuring a centralized process and efficiency in disseminating the information to all necessary parties.

11 VAC 5-60-40           Duties of sports betting permit holder

A. A sports betting permit holder shall establish procedures that are designed, to the greatest extent practicable, to:

[3. Void all outstanding wagers of an individual on the self-exclusion list;]

DraftKings respectfully suggests modifying this provision in order to allow an individual’s outstanding bets to settle even 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 void 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. This has been the approach adopted by regulation in other jurisdictions, for example, in Pennsylvania, 58 Pa. Code Section 812.9(i)(2)(iii) only requires that a “player must be paid in full for his account balance” and the account closed

11 VAC 5-60-50           Removal from self-exclusion list

A. Except for those individuals choosing a lifetime self-exclusion, any self-excluded individual may, upon the expiration of the period of self-exclusion requested pursuant to 11 VAC 5-60-20, request removal of his or her name from the self-exclusion list online or by submitting, in person, a completed request for removal as required in B. below. The request shall be delivered to Department headquarters or to such other location as may be specified by the Department. Any individual submitting a request for removal from the list in person shall be required to present valid identification credentials containing his or her signature and either a photograph or a general physical description.

DraftKings respectfully requests that an online option be available for users to remove their name from the self-exclusion list upon the expiration of a period of self-exclusion.  Since this is a mobile product and users may self-exclude online, it stands to reason that they should be able to remove their names online at the conclusion of the self-exclusion period as well.

DraftKings Comments on 11 VAC 5-70 – Sports Betting (Sections 10-20)

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

11 VAC 5-70-10           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.]

DraftKings respectfully submits that this portion of the definition of “sports betting” be deleted because the Olympics are not specified in the authorizing statute as an impermissible event. The General Assembly was very deliberate in deciding which events were carved out of allowable wagers and Olympic events were specifically not included as prohibited events. In order to fully eradicate the illegal market, the legal market must be able to compete, which means including as wide an array of event and betting options for consumers.

The International Olympic Committee is an international sports governing body that ensures integrity across the events it oversees and, as such, the Board can be assured events comport with ethical standards. Olympic events satisfy the definition of a permissible “sporting event” as defined by 11 VAC 5-70-10, as an athletic event. Given that the Board must approve all permissible wagering events before they are offered, DraftKings respectfully suggests that this definition not be overly prescriptive and give the Board the flexibility to permit or deny events sponsored by the International Olympic Committee during the event approval process.

“Sports betting employee” means an individual who does not meet the definition of a Principal and works within the borders of the Commonwealth for a permit holder, sports betting supplier, or vendor [on non-management support services such as software or hardware maintenance, provision of products, services, information or assets, directly or indirectly, to the permit holder] and either (1) directly manages the sports betting operation or (2) has the ability to directly affect the outcome of sports betting and can deploy code to production for a sports betting platform.

DraftKings seeks clarification on the definition of “sports betting employee” to further understand the scope of employee the Director seeks to capture. The sentence structure is unclear as to whether the phrase “non-management support services such as software or hardware maintenance, provision of products, services, information or assets” modifies the role of the employee or the role of the supplier or vendor.  DraftKings respectfully suggests incorporating language that captures only those individuals with the ability to directly affect sports wagering in Virginia, namely employees that directly manage the sports wagering operation or those that can deploy code and have the ability to affect the outcome of sports wagering.

“Sports betting supplier” or “Supplier” means a person who: (a) manages, administers, or controls a sports betting platform on behalf of a permit holder; (b) manages, administers, or controls [the games on which wagers are initiated, received, or made] risk management functions [on a sports betting platform] on behalf of a permit holder; or (c) maintains or operates the software or hardware that directly affect the operation of [a] sports betting [platform], including geolocation services[, customer integration,] and customer account management.

DraftKings respectfully suggests the above revision due to the undefined and overbroad nature of the definition, which would capture a larger group of suppliers than necessary or reasonable. It is fitting and appropriate to license suppliers that are directly involved in the functionality of sports betting. Such suppliers generally specialize in the gaming industry and are accustomed to licensing processes. However, due to the digital nature of the products, sports betting operators also work with a host of suppliers that have no role in the functionality of the wagering platforms or gaming generally, but rather provide industry-agnostic standard services such as digital advertising and marketing, creative production, and the like to a wide array of customers.

We suggest that the Director limit supplier licensing to integrated suppliers that enable platform functionality, while not requiring licensing of other non-gaming suppliers providing more ancillary services. This will allow Virginia to fully review companies that will have some direct role in sports wagering in the state, while also allowing permit holders to work with the very best non-gaming vendors who might otherwise avoid doing business in the state due to unfamiliar licensing requirements. This approach will ultimately lead to a higher quality product from all permit holders and a better user experience.

Finally, it is unclear how “customer integration” and “customer account management” differ and, thus, we have suggested removal of the term “customer integration.” Should the Director feel this is a separate, essential service to customers, DraftKings respectfully suggests defining the term.

“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, or any other sports event or combination of sports events approved by the Board.

DraftKings respectfully submits a modification to the definition of “sports event” to provide the Board with flexibility to approve new and emerging sports events while providing permit holders with the widest latitude to offer events, in order to more effectively counter the illegal market. There may be additional sports events throughout the year, such as the Major League Baseball Home Run Derby, the National Basketball Association’s All Star Slam Dunk Contest, the National Football League Most Valuable Player (MVP) Award, or awards shows such as ESPN’s The ESPY’s, that are events that people wager on annually, conducted with integrity standards aligned with Virginia’s expectations.

It has been our experience that regulators who provide sports betting operators flexibility to offer a wide range of wagering events have seen their markets mature the fastest. A sports betting operator’s ability to offer an expansive betting menu in a timely manner will help sports wagering licensees draw players to and retain players in a regulated sport wagering market. Further, these changes would align Virginia’s sports wagering market to other sports wagering markets, including New Jersey and Colorado.

“Vendor” or “sports betting vendor” means a person within the Commonwealth who directly affects sports betting in Virginia on behalf of a permit holder. [is engaged by, under contract to, or acting on behalf of a permit holder] and does not meet the criteria for licensing as a Principal or a Supplier[.]

DraftKings respectfully requests the above clarification be made to ensure that only those vendors directly involved with a sports wagering operator’s Virginia sports betting operation will be required to obtain a license in the Commonwealth. This will ensure that vendors of sports wagering operators – many of which operate sportsbooks in multiple jurisdictions throughout the United States and internationally – are not subject to licensure if they are not directly involved with the sports wagering operation in Virginia. Further, this modified definition will reduce the Director’s administrative burden, as it will not capture more vendors than necessary, while capturing those which are essential to the function of sports betting in Virginia.

11 VAC 5-70-20           Application Process

B. 2. Information and documents submitted to the Director in a permit, license, or registration application shall be sworn under the penalties of perjury as to their truth and validity by the applicant or, if the applicant is not an individual, by the [chief executive officer] an officer of the applicant.

DraftKings respectfully requests this minor change mandating which officer affirms the validity of application materials so that there is additional flexibility for the applicant, while still ensuring there is a member of the executive team attesting the materials are true and valid. As written, the current proposed rule is an overly prescriptive mandate that may be outside the course of normal business practice for applicants. By way of example, a Chief Compliance Officer (CCO) or Chief Legal Officer (CLO) may appropriately attest an application’s validity, rather than a Chief Executive Officer, as the CCO or CLO would have intimate knowledge of the application process and legal requirements for complying with the standards of Virginia’s sports wagering program. The small change would allow any member of the executive suite attest an application’s soundness.

5. A request shall be granted if the applicant demonstrates to the satisfaction of the Director that:

[C. 5. (a). The circumstances requiring the amendment were outside the control of the applicant;]

DraftKings respectfully requests that this section be deleted, as there may be changes made to the application well within the control of the applicant that do not affect an applicant’s ability to provide mobile services while fulfilling the objectives of the Commonwealth’s sports betting program. Removing this provision will encourage applicants to keep application materials up-to-date and continue to supply all relevant information to the Director, without concern of disqualification. By way of example, should the contact information for the applicant change, that would require an amendment, which is likely within the applicant’s control, but could be grounds for disqualification under this provision.

G. 2. If information submitted by an applicant who is issued a permit, license, or registration changes materially during its term, the permit holder, licensee, or registrant shall [immediately] promptly submit to the Director notice in writing of the change.

DraftKings recognizes the importance of providing the Director with timely, accurate information so that he or she may adequately determine the qualifications of the applicant and its suitability to hold a sports wagering permit. However, requiring applicants to notify the Director of every change – including minor, non-substantive changes – to an application will create an administrative burden for the Director and create a situation that greatly impacts the efficiency of the applicant with no increased benefit to the Commonwealth of Virginia. Notification from the applicant of material changes to its application will ensure that the Director is in possession of all pertinent information to aid in its decision. Changing the standard from immediately to promptly will also allow the applicant to timely notify the Director without placing an unduly strict time frame on such notification.

H. 1. Upon request of an applicant, the Director may in his sole discretion issue a temporary or conditional permit, license, or registration to an apparently-qualified applicant.

DraftKings seeks clarification on this section in order to determine when and how an applicant may request a temporary or conditional permit, license, or registration, and under what circumstances that request may be made.

[H. 3. By accepting a temporary or conditional permit, license, or registration, an applicant waives the right to challenge or contest a final decision by the Director concerning the application.]

DraftKings respectfully suggests removal of this provision because of its contradictory nature to Article 2 of the Virginia Lottery Act, which reads “The Director shall make a determination on an initial application for a sports betting permit within 90 days of receipt. The Director's action shall be final unless appealed in accordance with § 58.1-4007.” The above proposed regulation would remove a permit applicant’s right to appeal under the law.

H. 5. c. May be extended by the Director for one period of up to 180 days. Additional temporary extensions may be granted at the discretion of the Director.

DraftKings respectfully requests this addition to the proposed regulations to ensure an applicant is not shut out of the market in the event processing of applications takes longer than expected, despite complying with all application requirements. This addition gives the Director the authority to determine whether an applicant is eligible for extension, while not penalizing applicants for circumstances beyond their control.

DraftKings Comments on 11 VAC 5-70 – Sports Betting (Sections 50-80)

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

1 VAC 5-70-50         Sports betting applications

B. 7. Whether the applicant intends to limit its participation in any of the types of allowable sports events available in the Commonwealth and, with particularity, how it plans to manage each type of sports event it proposes to offer;

DraftKings respectfully seeks clarification on this proposed regulation to better understand whether applicants need to formally opt out of offering wagering on allowable sports events approved by the Board, and how that works in the application process if the Department has not yet provided a list of approved events. DraftKings also seeks clarification on what information is to be provided regarding management of “each type of sports event it proposes to offer,” as applicants must submit a number of additional materials that describe acceptance and treatment of events under 11 VAC 5-70-260, 11 VAC 5-70-270, and 11 VAC 5-70-290.

B. 8. Whether the applicant intends to offer its sports betting platform in physical locations within the Commonwealth or to participate only in an online environment;

DraftKings respectfully seeks clarification on this proposed regulation to determine whether any permit holder licensed by the Commonwealth of Virginia may be permitted to open a physical location in addition to offering a mobile platform.

H. 5. Number of shares outstanding [and the market value of each share];

DraftKings respectfully requests the above provision be struck from the proposed regulations because market value of shares consistently change, so it’s not clear at what point market value would be determined. Providing current market value would require repeated, updated filings from applicants, a procedure that would create additional, unnecessary burden on both applicants and the Director and Department staff.

P. The application shall disclose all principal entities of the applicant.

A sports betting permit application is required to disclose “all principal entities of the applicant,” however, the term “principal entities” is not defined. DraftKings respectfully requests that “principal entities” be defined in the regulations and that the definition be narrowly drafted to capture only those entities that have direct control over the business of the applicant, such as a parent company.  

Q. If the applicant is not an individual, the application shall include a list of the individuals who are serving, or who are designated to serve, during the first year after the date the application is submitted to the Director, as a director, officer, partner, [an individual having key management responsibility,] or any other principal, and provide:

DraftKings respectfully requests “key management responsibility” be deleted, as it is not defined and is vague and potentially overbroad, since the individuals with ultimate accountability for the actions and decisions of such managers are required to be disclosed in the form of directors, officers, partners, and principals.  Furthermore, DraftKings respectfully suggests that the identification and disclosure of directors, officers, partners, and principals should not automatically result in an individual licensing requirement for each person; rather licensing determinations should be made on a case-by-case basis depending on the individual’s specific job functions and responsibilities. 

Q. [3. The individual's principal occupation during the 5-year period preceding the date on which the application is submitted to the Director; and]

DraftKings respectfully requests that this section be struck, as the information is an additional, unnecessary disclosure about an overly broad group of individuals. This information will be readily available in background checks conducted by the department for principals subject to background checks as provided by law, and serves only as additional administrative burden on both the applicant and the department to provide this information for all individuals listed here.

R. The application shall:

1. State whether another entity has a beneficial ownership in the applicant, as defined Article 1, Chapter 14 (§ 13.1-1201) of the Code of Virginia.

2. Describe the:

a. Nature of the beneficial ownership; and

b. Extent of control exercised by the beneficial owner; and

3. Include information and documents required by this chapter as to each beneficial owner and principal entity.

DraftKings respectfully requests confirmation that references to “beneficial ownership” in Section R are not applicable to incorporated applicants. DraftKings notes that the term “beneficial owner” as defined in Article 1, Chapter 14 (§ 13.1-1201) of the Code of Virginia applies only to “businesses trusts” which are unincorporated entities meeting certain requirements. If this section is intended to be applied to a broader category of applicants than just unincorporated business trusts, DraftKings respectfully requests the entire Subsection R be stricken because it would be overly burdensome for a public company to provide the enumerated information for each entity with an ownership interest in the company.

If the section applies to incorporated entities and is not struck, DraftKings respectfully request further guidance as to how it would be applied. As noted above in the comments to Subsection P, “principal entity” is not defined in the proposed regulations.  DraftKings respectfully suggests that this term be narrowly defined to capture only those entities with the direct ability to control the applicant.  Furthermore, DraftKings respectfully suggests that there be an ownership threshold that triggers any request for additional information on beneficial owners and principal entities, as is appropriate to reflect the fact that a small ownership stake does not result in control over the applicant, particularly for public companies which have many owners with a small ownership stake. 

T. The Director may award a sports betting permit after consideration of the application and based on:

5. The amount of adjusted gross revenue and associated tax revenue that an applicant is expected to generate

DraftKings respectfully requests clarification as to whether the Department or the applicant will determine the applicant’s expected revenue, and what information an applicant must submit to substantiate this.

X. At least 60 days before the end of the term of a permit, a permit holder shall submit a:

DraftKings respectfully requests clarification as to the term of a renewal permit.  The term of the license is three years from the date of issuance (11 VAC 5-70-50(W)) whereas the Annual Application Period is defined as May 15-31.  See 11 VAC 5-70-10.  DraftKings requests clarification as to whether permit holders must renew during the Annual Application Period in May as required by 11 VAC 5-70-20(A)(3), or at the expiration of their three-year permit.

11VAC5-70-60             Principal applications

B. A principal who will be employed in a managerial capacity for a sports betting platform on behalf of a permit holder:

DraftKings respectfully requests clarification on what constitutes “a principal employed in a managerial capacity for a sports betting platform on behalf of a permit holder.”  DraftKings specifically seeks clarification on (1) whether this is limited to employees of the permit holder, or if it extends to employees of suppliers who provide services for the permit holder, and (2) the job functions that trigger a finding of being employed in a managerial capacity for the sports betting platform.  Given the high cost and burden associated with principal licensing, it is appropriate for this provision to be narrowly construed to only apply to the individual or individuals with ultimate accountability over the function of the sports betting platform as operated in Virginia as employed by the permit holder and, if applicable, the supplier operating a sports wagering platform on behalf of a permit holder.

            F. The term of a principal license shall be three years from the date of issuance.

Given the comprehensive suitability investigation conducted for a principal’s initial license, DraftKings respectfully submits that renewal applications should be only abbreviated forms covering the time period since the issuance of the original license, and that such renewal fee shall be lower commensurate with the shorter investigation needed to determine suitability.

11 VAC 5-70-70           Sports betting supplier applications

B. A principal who will be employed in a managerial capacity for a sports betting platform may submit the principal application together with a supplier license application.

Similarly to 11 VAC 5-70-60(B), DraftKings requests clarification on what constitutes a principal employed in a managerial capacity for a sports betting platform on behalf of a permit holder.

11 VAC 5-70-80           Sports betting vendor registrations

A. Any person not approved by the Director as a registered sports betting vendor may not perform vendor functions for a permit holder or sports betting supplier within the Commonwealth.

As noted above, the definition of vendor is extremely broad and should be narrowly tailored so as to capture only those vendors who provide services that directly impact the sports betting customer in the Commonwealth. DraftKings respectfully suggests that the term “vendor functions” be clarified so as to identify those functions that the Commonwealth deems trigger vendor registration.

DraftKings Comments on 11 VAC 5-70 – Sports Betting (Sections 90-130)

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

11 VAC 5-70-90           Sports betting employee applications

A. Any individual not holding a valid sports betting employee license issued by the Director may not be employed by a permit holder or sports betting supplier to work within the borders of the Commonwealth as a sports betting employee.

DraftKings respectfully suggests adding language consistent with the definition of “sports betting employee” denoting that this requirement applies only to those workers “within the borders” of the Commonwealth.  As suggested in our comment the definition of “sports betting employee” in 11-VAC 5-70-10, DraftKings respectfully suggests that only those individuals in the Commonwealth with specific management responsibility over the sports wagering operation or the ability to deploy code and directly affect the outcome of sports betting should be licensed as sports betting employees.

            [B. 6. a. Obtained a bond if required under this chapter;] and

DraftKings respectfully requests the Lottery to remove all bonding provisions related to employee licensure.  This would be extremely burdensome for operators and results in no corresponding benefit to the Commonwealth.  Permit holders undergo extensive diligence to ensure they are financially sound, and are subject to insurance and bonding requirements by these regulations.  Additional bonds for individual employees achieve little added benefit, as it’s not clear what such a bond is intended to accomplish.  The unnecessary nature of this requirement is demonstrated by the fact that we are aware of no other sports betting state in the country that requires a bond for individual employees.

C. The application, backgrounding, and license fee for a sports betting employee license or renewal is $500.

Related to subsection A. of this section, further clarity regarding employee licensing requirements is needed to understand the scope of this provision.  While a $500 fee may be feasible for in-state employees with specific responsibilities related to the management or functionality of the sports betting platform, if the scope of employee licensing were to encompass a larger group that is not narrowly tailored by responsibility and location the employee licensing expense could grow quickly and become unwieldy.

F. 2. e. Pays the fees for licensure and backgrounding as described in this section.

DraftKings suggests that this provision be clarified to confirm that the employer may pay the employee’s fees.

11 VAC 5-70-100         Bonds

[A. The Director may require an applicant, permit holder, licensee, or registrant to obtain a bond before the Director issues or reissues a permit, license, or registration.]

[B. A sports betting employee may be exempted from obtaining a bond if the employee is involved in activities that the Director has determined do not require a bond to protect the public interest.]

DraftKings respectfully requests that these bonding sections be eliminated.  To impose an open-ended bond requirement on all types of licensees with no guidelines regarding implementation does little to inform the applicants and permit holders of their potential obligations and provides no guarantee that similarly situated permit holders will be treated equally. If the Department chooses to retain bonding requirements, which DraftKings respectfully suggests it should not, the requirements for such bonds and the conditions under which they would be required should be laid out with specificity in the regulations.

As to the employee bonding requirement, DraftKings strongly urges the Lottery to remove this requirement altogether based on being unnecessary, unbeneficial, and extremely burdensome on both operators and the Director.  The burden on permit holders to both produce job descriptions for every employee and to then obtain a bond—with no guidelines as to triggering responsibilities provided in the regulations—will result in great burden and expense both to the Department and to the permit holders. 

[F. As approved by the Director, the bond for a principal may be included in the bond submitted by the permit holder or sports betting supplier.

G. For a principal or sports betting employee not covered by a bond under subsection E of this regulation, the amount of the bond:

1.Shall be determined by the Director based on the employee’s level of responsibility and the Commonwealth’s risk of exposure to liability for the employee’s performance; and

2. May not exceed $150,000.]

DraftKings respectfully suggests striking these subsections in their entirety, and instead specifying in subsection D that a permit holder’s bond, if required, covers all of its principals and employees.

H. For a sports betting supplier licensee [or vendor registrant] that operates a sports wagering platform on behalf of a sports wagering operator, the amount of the bond:

1. Shall be determined by the Director based on the [employee’s level of responsibility and] the Commonwealth of Virginia’s risk of exposure to liability for the [employee’s] supplier’s performance; and

2. May not exceed $150,000.

DraftKings respectfully requests that the supplier bond be limited to those suppliers that operate a platform on behalf of a permit holder.  This ensures that the operators accountable for the platform are fully bonded without imposing unnecessary bonding requirements on ancillary suppliers or vendors that could discourage their participation in the market and make it difficult for operators to obtain the best available services.

11 VAC 5-70-130         Identification Cards

DraftKings respectfully suggests that this section be stricken from the mobile sports betting rules. While DraftKings recognizes and appreciates the need for licensing of certain employees, the nature of the mobile sports wagering is such that employees rarely, if ever, interact with customers in person. The requirement for identification cards is an additional burden on the Director that would slow down the licensing process and create one more hurdle to opening the sports betting market in the Commonwealth. The licensing requirements of the rules are sufficient to ensure integrity in the sports betting market in Virginia and allow the Director to have line of sight into the employees with access to sensitive consumer data.

Should the Director feel that identification cards are necessary proof that principals and employees have complied with all licensing requirements, DraftKings respectfully suggests that identification cards be restricted to those employees in a retail setting, as they are most likely to interact with the betting public.

DraftKings Comments on VAC 5-80 Sports Betting Consumer Protection Program (Sections 20-50)

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

CONSUMER PROTECTION

11 VAC 5-80-20           Sports bettor’s bill of rights

A. A permit holder shall make conspicuously available [publish prominently] on its platform a link to the Virginia Sports Bettors’ Bill of Rights [in the form established and made] available [by] on the Department’s [on its] website.

DraftKings respectfully requests the above modifications to allow a permit holder to place a graphic or link on its sports betting platform to allow individuals to access the Virginia Sports Bettors’ Bill of Rights on the Department’s website. This would allow the Department to control the display of the Bill of Rights and not require permit holders to build a new page into their sports betting platforms, which can be a substantial technology build.

B. A permit holder may not, as a condition of use of the permit holder’s platform, require any player to waive any right[, forum, or procedure including the right to pursue legal action or] to file a complaint with, or otherwise notify, [any instrument of the state or federal government, including the Commonwealth’s Attorney, law enforcement, courts, and state and federal agencies,] the Department of any alleged violation of the Virginia Sports Gaming Law, these regulations or any other applicable law, regulation, or administrative policy.

As is common practice for many businesses with large numbers of customers, sports wagering operators may include in their terms of use arbitration clauses to properly and efficiently resolve consumer concerns. Such terms are critical to ensure prompt and cost-effective resolution to disputes, thereby keeping costs lower for the operator and consumers. Virginia law allows arbitration agreements in commercial contracts and the General Assembly did not contemplate banning such measures in Article 2 of the Virginia Lottery Act, and therefore this provision should be modified to permit the use of arbitration agreements.

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] Conspicuously available information related to, at a minimum:

a. [The handle of the bet] The potential payout of a wager per amount of money being risked;

b. [The odds of winning the bet and the information used to calculate those odds] The posted odds; [and]

c. [3.] The payout [amounts and a schedule of payouts] procedures.

DraftKings respectfully requests the above modifications be adopted to ensure bettors receive information that is relevant to their decision-making in placing a bet.  No sports betting jurisdiction in the country requires operators to post the handle of a bet (handle being the total amount wagered by all bettors). The handle of the bet does not inform a bettor’s chances of winning a wager at the posted lines or odds, and is proprietary information to the permit holder.  Similarly, the information used to calculate the posted odds is proprietary and it’s not clear how this would be easily explained to a customer.  Finally, the odds of winning are not fixed or even ascertainable because a wager on a real-life sporting event does not have precise quantifiable odds in the way that a lottery ticket with a fixed number of outcomes has. Sportsbooks use their knowledge and expertise to quantify and try to offer balanced odds but the nature of sports betting is that the odds of winning cannot be known with certainty by any party in advance, including the operator.  DraftKings respectfully suggests the above modifications which will help inform a bettor’s decision-making in placing a wager, without posing a novel and perhaps unachievable standard on operators that has never been used in the industry. 

DraftKings respectfully requests the above modifications for similar reasons to the requested changes to 11 VAC 5-80-20(C)(1)(a). We believe providing information to sports bettors about how to read odds and understand the potential outcome of their bets is of the utmost importance. Through this description, a permit holder will also partially address how odds are calculated. For example, if describing to an individual the difference between a line that is -500 and one that is +500, the important factor is that the -500 bet would be on an outcome that is very likely to occur compared to the +500 bet which is very unlikely to occur based on the information available.

 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:

…

2. Information on play (e.g., player feedback); and

DraftKings respectfully requests clarification on the above language. As written, it is unclear whether this requirement is addressing any or all of the following: sport settlement rules (how different bets are graded and paid out), a player’s information about their sports wagering (wager history), or the player complaint process, which is covered in 11 VAC 5-80-30.

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:

…

3. [Designated p]Player information or support services regarding player management tools.

Similar to our comments above to 11 VAC 5-80-20 C. 2., DraftKings respectfully requests clarification on the above language and also respectfully requests the word “designated” be removed. The term “player information” can be interpreted many ways, but generally, sports wagering operators are required in other jurisdictions to make summary statements of a player’s wagering activity available to them on request that includes information like deposit and withdrawal history, wager history, and responsible gaming limit history. The term “support services regarding player management tools” can also be interpreted many ways, but generally, sports wagering operators are required to provide responsible gaming information and features for bettors.

11 VAC 5-80-30           Consumer complaints

A. A permit holder shall develop and prominently publish procedures by which a sports bettor may file a complaint with the permit holder [in person, in writing, online, or by other means about any aspect of the sports betting program].

DraftKings respectfully requests the above language be removed as it could create practical problems for permit holders. Article 2 of the Virginia Lottery Law allows for permit holders to offer their sports betting platforms through websites, apps, or other platforms accessible via the Internet, and mandating that permit holders offering a purely online product take complaints in writing or in-person is impractical.

D. All escalated complaints received by a permit holder from a sports bettor and the permit holder's responses to such complaints shall be retained by the permit holder for at least four years and made available to the Department within seven days of any request from the Department.

DraftKings respectfully suggests that the recordkeeping requirements should be limited only to escalated complaints that require follow up from the permit holder. We provide this suggestion because, in the normal course of business, sports betting operators regularly receive minor complaints that do not implicate any consumer protection or operational requirements raised by the law or regulations, and only the substantive complaints should be subject to a recordkeeping requirement. 

11 VAC 5-80-40           Prohibition on out-of-state betting

A permit holder shall ensure that only people physically located in Virginia are able to place bets through its Virginia-facing sports betting platform.

DraftKings respectfully requests the above modifications to clarify the intent of this requirement. Sports betting operators use geolocation services to ensure only people located in a certain jurisdiction can wager in that jurisdiction. However, we would like to clarify that sports betting operators use the same sports betting platform across different jurisdictions (e.g. the DraftKings Sportsbook App) that is automatically tailored to match the requirements of each jurisdiction it is operating in. Read literally, this requirement could prevent the use of the app in other states, which DraftKings believes is against the legislative intent of Article 2 of the Virginia Lottery Act.

11 VAC 5-80-50           Underage betting

A. A permit holder shall implement age-verification procedures approved by the Department to verify that an individual is at least 21 years of age and require an individual to acknowledge the legal age for sports betting and that no sports bet [is] may be placed by or on behalf of an individual under the age of 21. [Procedures for verifying an individual’s age that satisfy this requirement include:

1. Providing a verification form to be signed by the individual and returned to the permit holder by postal mail, facsimile, or electronic scan;

2. Requiring the individual, in connection with a monetary transaction, to use a credit card, debit card, or other online payment system that provides notification of each discrete transaction to the primary account holder;

3. Having the individual call a toll-free telephone number staffed by trained personnel;

4. Having the individual contact trained personnel via video conferencing technology; or

5. Checking a form of government-issued identification provided by the individual against databases of such information, provided that the individual's identification is deleted from the permit holder's records promptly after the verification procedure is complete.]

DraftKings respectfully requests the above modifications be adopted to better conform with the robust and effective age verification measures currently implemented by sports betting operators. The procedures identified in 11 VAC 5-80-50 A. 1 – 5. do not align with the way the sports betting industry performs age verification. During account creation, sports betting operators perform identification verification by collecting certain information (name, address, date of birth, Social Security Number or Last four numbers of Social Security Number, etc.) and use industry-approved vendors to verify identity based on that information. Any patrons who cannot be positively identified using that information are prohibited from creating an account until they upload documentation to customer support for review, such as valid state-issued forms of identification. On DraftKings’ platform, if a player attempts to verify a date of birth below the minimum age of eligibility, the system automatically applies restrictions to that account and the individuals are subject to review by our risk management team. This process, and the process other sports betting operators use, is effective in verifying age and consistent with identification methods used by other secure ecommerce providers. For those reasons, DraftKings respectfully requests the Director remove the proscriptive requirements around how a permit holder identifies age, and instead reserve the right to approve the process. We believe this will benefit permit holders and the Director, ultimately creating a sports betting industry in Virginia that prevents underage betting. These changes also appear consistent with 11 VAC 5-70-210.

B. A permit holder shall promptly refund the balance of a sports betting account and close the sports betting account if the permit holder determines a sports betting account has been accessed by or used to place any [money] wagers[ed] by or on behalf of a minor. [A permit holder may withhold and, if practicable and as approved by the Department, redistribute to other winners any prize won by a minor upon a good faith determination, following reasonable investigation, that the minor misrepresented his age in order to place a sports bet.]

DraftKings respectfully requests the above modification to align with how sports betting operators deal with accounts that have been determined to have bets placed through access by a minor or on behalf of a minor. Specifically, DraftKings has a zero-tolerance policy and will immediately close that account and refund the remaining account balance. The second sentence of this requirement is not applicable to traditional sports betting, and may only apply to bets on things like pools, and the process of what happens when a bet is voided or cancelled by a permit holder will be described in their house rules.

[C. A permit holder shall make available, prominently publish, and facilitate parental control procedures to allow parents or guardians to exclude minors from access to any sports betting platform.]

DraftKings respectfully requests the above requirement be removed entirely, as it is not applicable. Due to the identity and age verification procedures sports betting operators use, only users 21 and over are able to create a sports betting account. Further, in our proposed changes to 11 VAC 5-80-50 A. we suggest requiring that individuals acknowledge the legal age for sports betting and that no sports bet may be placed by or on behalf of an individual under the age of 21. Finally, if there is any concern as to misuse of the platform or a violation of the terms and conditions those concerns can be reported through the consumer complaint process.

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.

DraftKings Comments on 11 VAC 5-80 Sports Betting Consumer Protection Program (Sections 100-110)

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

11 VAC 5-80-100 Security of funds and data

B. A permit holder shall not share information that could be used to personally identify a sports bettor with any third party other than the Department, law enforcement with a warrant or subpoena or a credit-reporting agency, except when a bettor provides consent. Information that could be used to personally identify a sports bettor includes gaming habits, except when this information has been anonymized.

DraftKings respectfully requests the above modifications to provide for narrow exceptions to when a permit holder may share information about a bettor. The first instance would be if the permit holder receives consent from the bettor. The second instance would be anonymizing information to learn more about player habits to better improve a permit holder’s offering, and if this information about a player’s gaming habits has been anonymized it cannot be used to personally identify a sports bettor.

D. A permit holder shall maintain a reserve in the form of cash, cash equivalents, payment processors reserves, payment processor receivables, an irrevocable letter of credit, a bond, or a combination thereof in an amount approved by the Department and sufficient to pay all prizes and awards owed [offered] to a winning sports bettor.

DraftKings respectfully requests the above modifications to the reserve requirement to better align with industry standards. Specifically, we suggest adding payment processors receivables and payment processor reserves to the approved ways a permit holder may meet its reserve requirement. These two reserve methods are approved in other jurisdictions across the country, as bettors can be fully protected by a reserve comprising various 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.

Further, DraftKings respectfully requests replacing the word “offered” with “owed” to better align with the realities of sports betting. Due to the nature of sports betting, sports betting operators sometimes have an almost infinite amount of potential liability due to parlay wagers with near impossible odds, and this modification adopts a reasonable approach for all parties by requiring permit holders to have enough in reserves to cover money actually owed to bettors for winning sports wagers. These changes are also consistent with 11 VAC 5-70-140 B. 3.

 E. 5. Procedures that allow a sports bettor to request withdrawal of funds from his user account, whether such account is open or closed, including:

The permit holder shall honor any sports bettor's request to withdraw funds by the later of 10 business days after receipt of the request or 10 business days after submission of any tax reporting paperwork required by law, unless the permit holder believes in good faith that the sports bettor has engaged in either fraudulent conduct or other conduct that would put the permit holder in violation of this chapter, in which case the permit holder may decline to honor the request for withdrawal for a reasonable investigatory period until its investigation is resolved if it provides notice of the nature of the investigation to the sports bettor. For the purposes of this subdivision, a request for withdrawal shall be considered honored if it is processed by the permit holder but delayed by a payment processor, a credit card issuer, or the custodian of a segregated account; and

DraftKings respectfully requests the Department insert “10 business days” into the above requirement to provide operators ample time to process withdrawals, and amend the 10 days related to submission of tax reporting paperwork to 10 business days.  While sports betting operators try to transfer withdrawals back to players as soon as possible, there are some payment methods that take longer to complete than other payment methods. For example, if a player may receive a withdrawal in the form of a paper check, the process will take substantially longer than processing an online transaction.

E. 6. Procedures that allow a sports bettor to permanently close a user account at any time and for any reason. The procedures shall allow for cancellation by any means, including by a sports bettor on any platform used by that sports bettor to make deposits into a segregated account.

DraftKings respectfully requests clarification that establishing and making known procedures for contacting customer service to permanently close a user account at any time for any reason would satisfy this requirement. This is traditionally how we close user accounts, especially for those people that have self-excluded or are unable to access their accounts.

F. If a prize is awarded to a sports bettor with a closed account, that prize, to the extent that it consists of funds, shall be distributed by the permit holder within seven days, provided, however, that if an account is closed on the basis of the permit holder's good faith belief, after investigation, that the sports bettor has engaged in fraud or has attempted to engage in behavior that would put the permit holder in violation of this chapter, such prize may be withheld, provided that the prize is redistributed in a manner that reflects the outcome that would have resulted had that sports bettor not participated.

DraftKings respectfully requests clarification that the above requirement applies to closed accounts and not suspended accounts. We also respectfully request clarification on the definition of a prize and specifically request that the term prize does not include promotional offers that do not have a cash value.

G. If a sports bettor's segregated account remains unclaimed for two [five] years after the balances are payable or deliverable to the sports bettor, the permit holder shall presume the account to be abandoned. The permit holder shall report and remit all segregated accounts presumed abandoned to the State Treasurer or his designee pursuant to Chapter 25 (§ 55.1-2500 et seq.) of Title 55.1 of the Code of Virginia.

DraftKings respectfully requests the above modifications to the duration of an inactive bettor before the account is zeroed out and closed. Our platform traditionally treats an account as “dormant” if an individual account holder is dormant for 24 months, and at that point we follow the requirements of the jurisdiction where that individual is located to zero out the account. In order to keep our technology consistent across jurisdictions, we respectfully request the Department make this change to two years, as it is a sufficient amount of time to deem an individual’s sports betting account inactive. 

11 VAC 5-80-110         Limitations on user accounts

A. A permit holder shall not allow a sports bettor to establish more than one username or more than one user account per sports betting platform.

DraftKings respectfully requests that above change to clarify that a sports bettor may create no more than one account for each individual sports betting platform operated in Virginia. 

B. A permit holder shall take commercially and technologically reasonable measures to verify a sports bettor's identity [and address] and shall use such information to enforce the provisions of this section.

DraftKings respectfully requests the above modification be adopted to remove the requirement that permit holders verify a sports bettor’s address. Through our verification process, described in detail in our comment to section 11 VAC 5-80-50(A), we exceed industry standards to identify bettors, and while the individual’s address plays a role in that, the address is used to verify identity and is not verified as an end unto itself.  Instead, we respectfully request the Department narrow the focus of this requirement to allow for the successful processes we have implemented in other states to be implemented in Virginia.

DraftKings Comments on 11 VAC 5-80 Sports Betting Consumer Protection Program (Sections 120-150)

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

11 VAC 5-80-120         Protections for at-risk or problem bettors

A. In accordance with chapter 60 of this subtitle sports bettors have the right to self-exclude from and to self-impose restrictions on their participation in sports betting in the Commonwealth. Sports bettors may self-exclude through the voluntary exclusion program as provided in § 58.1-4015.1 or directly with a permit holder. In addition to participation in the voluntary exclusion program as provided in § 58.1-4015.1, a permit holder shall honor requests from a sports bettor to self-exclude from all sports betting activities, to set deposit limits, to set limits on the sports bettor’s total betting activity, or to limit participation to bets below an established limit on a platform owned by the permit holder.

DraftKings respectfully requests clarification on what limit the Department intends for permit holders to offer bettors when it states in the above requirement, “to set limits on the sports bettor’s total activity.” We interpret this to be a “spend” limit, which is a standard feature on our platform that allows players to set a limit on the amount of money they wish to spend while playing, which is different than a deposit limit, which we also offer.

B. 1. Opportunities to self-exclude from or to set self-imposed limits on [any] each permit holder’s sports betting platform used by that sports bettor to make deposits into a segregated account;

DraftKings respectfully requests the above modification to clarify that each individual permit holder is responsible for providing consumers with self-imposed betting limits and exclusions. While a master self-exclusion list run through the lottery is an effective way to control bettors who need a prolonged break from all sports betting, there is no way to effectively implement a master list of betting limits to share between platforms that would be responsive to customer needs, while fulfilling the consumer protection objectives of these regulations. Therefore, we respectfully request the above modifications in order to stipulate that each permit holder is responsible for implementing an individual’s limits and exclusions set by that individual on its platform.

[B. 2. Options to set pop-up warnings concerning excessive sports betting activity: and]

DraftKings respectfully suggests deleting this requirement as the term “excessive” is ambiguous and would be difficult for operators to comply with. Further, permit holders are required to provide different types of limit options outlined in 11 VAC 5-80-120(A). Finally, per our comments with suggested edits to 11 VAC 5-80-90(A)((2), there are requirements in place that ensure a bettor is aware of the time spent on an operator’s platform.

B. 3.Options to implement [permit holder-enforced]limits and timeouts (e.g. cooling off periods). Sports bettors shall have the option to adjust self-imposed limits to make them more restrictive as often as they like but shall not have the option to make limits less restrictive [within 90 days of setting such limits.] before such limit expires.

DraftKings respectfully requests this change to create greater consistency across the proposed regulations. While allowing consumers to self-restrict is extremely important, not allowing them to reduce the self-selected time of restriction just as important and setting a specific time to make changes may conflict with the self-selected time out. For example, DraftKings provides individuals the opportunity to set daily, weekly and monthly limits, and individuals are not able to remove or make the limit less restrictive unless the initial limit has expired. Additionally, an individual must take affirmative action for this limit to be removed or become less restrictive, so a daily limit could, in theory, stay active on an individual’s account the entire duration their account is open with DraftKings.

C. A permit holder shall not directly market sports betting by mail, phone, email, or social media or by knowingly directing any form of individually targeted advertisement or marketing material to a sports bettor if the sports bettor is self-excluded or otherwise barred from participating in sports betting.

DraftKings respectfully requests this change to reflect the operational realities of social media. Social media advertising and presence, especially in a state with a direct mobile market, is an important tool to bring players into the legal market. While platforms can ensure consumers on the self-excluded list are not specifically targeted by coordinated advertising campaigns, operators have less control over whether consumers interact with or are exposed to social media organically. This slight change removes overly burdensome requirements from operators’ business practices, while promising safety for consumers who have opted to exclude themselves from gaming activity.

G. A permit holder shall provide a conspicuously available link on its responsible gaming page to the Department’s responsible gaming page that details information [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] any platform owned by [the] a permit holder, including:

DraftKings respectfully requests the above modification to allow the Department to administer this program and manage such requests. Given the high bar needed to exclude a third party it’s appropriate that this action be done on the statewide basis rather than on an operator by operator basis. Permit holders should provide links to and text on information related to the third-party exclusion process, as administered by the Department. If a requester has documentary evidence of sole or joint financial responsibility and raises concerns over the related-individual’s sports betting, this is something that is likely best handled after the Department can validate and honor the requester’s request, place the related-individual on the state-wide exclusion list, and operators will then add these individuals to its exclusion database upon receipt of the list from the Department.

11 VAC 5-80-140         Promotional Offers

A. A permit holder shall fully and accurately disclose the material terms of all promotional offers involving sports betting at the time any such offer is advertised and provide full disclosure of the terms of and limitations on the offer before the sports bettor provides anything of value in exchange for the offer. If the material terms of a promotional offer cannot be fully and accurately disclosed within the constraints of a particular advertising medium[, such as on a billboard, the promotional offer may not be advertised in that medium] the material terms and conditions shall be accessed by hyperlink that takes the individual directly to the material terms or directs the individual to the site to access the offer or bonus terms and in reasonably prominent size.

DraftKings respectfully requests the above modifications to allow individuals to access material terms of all promotional offers as easily as practical. Specifically, our requested changes would allow a permit holder to provide an individual that sees a promotional offer, for example on a billboard, and the billboard directs the individual to a page on the permit holder’s website to receive that promotional offer, if the material terms of the promotional offer did not fit on the billboard, they must be prominently displayed on the permit holder’s directed landing page or provide a link that takes the individual directly to the material terms.

[B. No promotional offer available to a sports bettor who sets up a new user account may contain terms that delay full implementation of the offer by the permit holder for a period of longer than 90 days, regardless of the number or amount of wagers in that period by the sports bettor.]

DraftKings respectfully suggests removal of this proposed regulation to provide additional flexibility to consumers, as well as operators. A consumer’s ability to complete a deposit bonus should not be required to be completed within a specific timeframe. Allowing a consumer to spread out wagering activity over an extended period of time should be at the discretion of the operator, as there may be individuals that register for a sports betting account to wager on the Super Bowl and do not bet again until the following National Football League season.

11 VAC 5-80-150         Advertising in General

B. An advertisement for sports betting may not [depict] feature: 1. Minors, other than professional athletes who may be minors; 2. Students; 3. Primary or secondary [S]schools or Virginia colleges; or 4. Primary or secondary [S]school [or college] athletic associations.

DraftKings respectfully requests modification of this provision to permit incidental depiction of minors or educational campuses, for example in a video of a crowd or a shot of a city skyline. As to the prohibition on depicting colleges or college athletic associations, we note that Virginia’s law and regulations only prohibit wagering on contests that feature colleges from the Commonwealth, but allows for bets on the results of other college sporting events. Wager options in Virginia will include college sports, and advertising should be able to reflect the full scope of wager options in order to draw bettors to the legal market.

I agree with Caesars and Draftkings. The law in no way bans betting on olympic events. It should be allowed.

Please do not mandate that a GLI-33 certification is preferred. This would harm competition among all testing labs.

August 28, 2020

Mr. Kevin Hall

Executive Director

Virginia Lottery Board

600 E Main Street

Richmond, Virginia

Re: Virginia Lottery Board Comment on SB 384 Sports Betting Rules

Dear Executive Director Hall:

Penn National Gaming, Inc., and Penn Interactive Ventures, LLC, a wholly owned subsidiary of Penn National Gaming, Inc., and the digital arm of Penn National Gaming, Inc. (collectively, “Penn”), appreciate the opportunity to provide comments to the Draft Sports Betting Regulations promulgated by the Virginia Lottery Board (“VA Lottery”). Penn owns, operates or has ownership interests in 41 gaming and racing properties in 19 jurisdictions and video gaming terminal operations with a focus on slot machine entertainment. Penn currently has 16 retail sportsbooks in eight states. In addition, in 2019, Penn opened the first interactive (online) casino in the Commonwealth of Pennsylvania.

We would like to thank the staff for promulgating a comprehensive set of draft rules and for soliciting comments from interested parties. Penn has extensive experience in the online gaming and sports wagering space and, having been involved in the rulemaking process in multiple states legalizing sports wagering, we appreciate the opportunity to provide input on the draft regulations. In addition, we have separately submitted a version of red-lined rules for your further consideration and welcome any further conversation that may be desired. Penn appreciates the partnership with the VA Lottery Board and look forward to sports betting in the Commonwealth of Virginia.

Summary of Rule Comments:

• Employee Licensing: The current definition of “Principal” includes anyone “employed in a Managerial Capacity”, however “Managerial Capacity” is not defined by the rules, which leaves open the possibility of an excessive number of individuals being considered principals when there is no regulatory purpose served by doing so. Strictly construed, this could include a large number of middle level management employees. Considering the associated fee of $50,000 for each Principal License, this could potentially create a barrier to entry into the Commonwealth. In addition, licensing any employee with managerial capacity with fees associated with principal employees does not exist in any other jurisdiction with sports wagering. We respectfully propose defining “Managerial Capacity” in a manner to include only those managerial employees acting as officers or directors, which we believe is the legislative intent of the statutory provision.  Furthermore, employees in strict “managerial capacity”, including middle level management, could alternatively be subject to more reasonable licensing and associated fees.

• Self-Exclusion Process: Penn is supportive of a process whereby users can self-exclude directly with the VA Lottery and the Lottery then sharing the excluded list with all permit holders. We believe this carries out the intent to its fullest, which is to ensure the user is not able to establish another account with a different permit holder, and all other existing accounts are closed. We did, however, have a few additional suggestions in this process. The rules currently require a permit holder to provide a link within the player’s Internet gaming account directly to an Internet self-exclusion application form, an electronic signature and waiver acknowledgement. We recommend that the self-exclusion application form, signature, and waiver request all be located on the VA Lottery website. Permit Holders could provide a Self-Exclusion Page on their online or mobile application which provides information and links the patron to the VA Lottery website within the interactive platform. By permit holders providing a direct access to the VA Lottery’s dedicated website, it is easier for the user to understand they are excluding through the VA Lottery’s program, and to instill confidence that they are doing so through a credible source. This self-exclusion process is used in other jurisdictions such as Pennsylvania, where it has proven effective.  Additionally, to encourage patrons who would like to self-exclude, we recommend amending the rules requiring permit holders remit any balance back to the newly self-excluded patron, rather than remit the funds to the state as currently drafted in rules. The rule as written could act as a deterrent to those patrons wanting to self-exclude and a deterrent to a strong responsible gaming program in the Commonwealth of Virginia.

• Online Lottery Practices Applied to Sports Wagering: There are several rule sections which appears to be a carryover of current practices surrounding online lottery sales. While these are best practices for online lottery sales, they are not practical to apply to online sports wagering and create unclear requirements for Permit Holders and challenges in enforcing for the VA Lottery. In our specific comments to the  rules, we where we indicate where these occur and create challenges, which include, but are not limited to, some of the items required in the “Sports Bettors Bill of Rights”, the lack of ability to fund an account with cash and how accounts are registered.

• Definitions for Supplier and Vendor Licenses: We have proposed suggestions to assist in classifying licensing of certain common providers in the online sports wagering industry. Suppliers should be limited to those entities providing services to register players, and those specific to the data and risk management components of sports wagering. Vendors should be limited to ancillary services such as payment service providers and affiliate marketers. These licensing levels are consistent with other major sports wagering jurisdictions an creates consistency across states and clear expectations on expected to obtain licensing.

Again, Penn appreciates the opportunity to provide the above input to the Lottery Board as they consider the final substance of sports betting rules. We look forward to discussing the above items for final rulemaking in the coming weeks. In the interim, please do not hesitate to reach out to us if there is any support we can provide.

Best Regards,

Rhea P. Loney
             Director of Compliance

Penn Interactive Ventures, LLC

Good afternoon,

I am interested in knowing, regarding the future mobile sports betting license(s) being issued by the State of Virginia and The Virginia Lottery will the state and the agency consider a Minority Ownership participation in the decision process for a license?  Thank You.

Best,

Darrick Young

A. A sports betting permit holder shall establish procedures that are designed, to the greatest extent practicable, to:
1. Prevent an individual on the self-exclusion list from opening a new sports betting account;
2. Identify and suspend any sports betting accounts of an individual on the self-exclusion list;
3. Void all outstanding wagers of an individual on the self-exclusion list;
4. Refund any remaining balance to an individual on the self-exclusion list consistent with the permit holder’s internal controls approved by the Department;

We respectfully recommend removing this section of the rule. It allows a patron to self-exclude when they know a wager is going to lose, in order to receive a refund of the wager. For example, a patron may have a future wager on a team to win the Super Bowl. As soon as they know the team will not make the playoffs, they self-exclude in order to get a refund.

B. Upon verification of a self-excluded status, the sports betting permit holder shall:
1. Immediately prohibit access to the individual's sports betting account and seize return the individual’s winnings or other things of value;
2. Issue a Payout Receipt and Notice of Forfeiture to the excluded player via electronic or regular mail, containing the following:
a. The total value and a detailed description of winnings or things of value that were seized;
b. The date of the incident;
c. The name of the self-excluded individual, if known, and basis for determining the individual is a self-excluded individual;
d. The street and mailing address of the self-excluded individual, if known, at which he or she may be noticed regarding any future proceedings;
e. The identification date of the internet or mobile wagering session during which the self- excluded individual was engaged in a gaming transaction; and
f. Notice to the self-excluded individual that the Department shall be seeking forfeiture of the winnings or things of value seized that the individual has the right to be heard about the forfeiture, and that failure to respond to a forfeiture notice from the Department shall be deemed a waiver of the right to be heard.

We respectfully recommend the VA Lottery follow the industry standard and require permit holders return the funds back to the individual that is self-excluding.

We respectfully recommend requiring permit holders provide the date in which the self-excluded individual was engaged in play, rather than the specific internet or mobile wagering session.

“Affiliate” means a person that, directly or indirectly, through 1 or more intermediaries, controls or is controlled by an internet gaming operator.[1]

“Managerial Capacity” means an employee performing the function of an officer or director of the company.[1]

11VAC5-70-10 Sports governing bodies should not qualify as “sports betting supplier[s]”

Sports governing bodies should not be subject to licensure merely because sports betting operators accept wagers on the events that our organizations oversee. Under the draft definition of sports betting supplier, any entity that “manages, administers, or controls the games on which wagers are initiated, received, or made . . .” qualifies for this level of licensure. As written, this definition is overbroad, and can be interpreted to include sports governing bodies; however, we do not believe it was the Board’s intention to require all entities that “administer . . . games” to obtain supplier licenses.  We encourage the board to clarify that sports governing bodies do not—by virtue of their status as entities that present and oversee sporting events—qualify as suppliers by amending the relevant definition as follows:

“Sports betting supplier” or “Supplier” means a person who: (a) manages, administers, or controls wagers initiated, received or made on a sports betting platform; (b) manages, administers, or controls the games on which wagers are initiated, received, or made on a sports betting platform, excluding sports governing bodies as defined in this section; or (c) maintains or operates the software or hardware of a sports betting platform, including geolocation services, customer integration, and customer account management.

11VAC5-70-230(C) Sports governing bodies should receive account-level betting information

Virginia’s sports betting law requires permit holders to cooperate with sports governing bodies’ investigations, including the provision of account-level betting information, and audio and video files. See Virginia Lottery Law; Sports Betting Section 58.1-4043(E). As the Board is aware, this information will be important to the resolution of sports betting investigations. As written, however, the Board’s draft regulations only require regulated entities to provide account-level betting information and data files to the Executive Director and law enforcement agencies. To better reflect the language and intent of the statute, we urge the Board to amend this provision as follows:

C. A regulated entity shall provide or facilitate provision of account-level betting information and data files relating to individuals placing wagers and any other information necessary for investigations conducted by the Director, a sports governing body, or a law enforcement agency.   

11VAC5-70-230(M) Sports governing bodies should receive real-time, account-level information from betting operators as set forth in the sports betting statute

Virginia’s sports betting law mandates that permit holders share in real time, or as frequently as is commercially reasonable, certain betting information with sports governing bodies. See Virginia Lottery Law; Sports Betting, Section 58.1-4034(B). However, the Board’s draft regulations undercut this mandate and state that disclosure is only required if the Director determines, in his or her sole discretion, that such information sharing is “necessary.”  We recommend that the Board amend this regulation to harmonize it with the type of data sharing that is contemplated in the statute.

Using technology to identify potential integrity issues based upon abnormal betting patterns is essential for all parts of the sports betting ecosystem, and sports governing bodies are best positioned to detect integrity issues across operators and across jurisdictions. Because sports betting in the United States is currently being legalized and regulated at the state level, there simply is no interstate system that collects and monitors betting data on a nationwide basis; states thus remain unable to detect abnormal betting activity that may occur across multiple jurisdictions. Sports governing bodies are uniquely positioned to fill this gap for their sports. They also have resources that no regulator or sports betting operator has in terms of investigative reach and authority, including access to teams, referees, players, and other insiders. For all of these reasons, we recommend the following amendment to the proposed regulations:

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 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.

11VAC5-70-230(K).  Sports governing bodies should have more flexibility in making disclosures related to integrity investigations

The draft regulations provide that sports governing bodies must receive prior approval from the Director to disclose information reported under the regulations for integrity-related investigations.  Prior approval from the Director (and regulators in other jurisdictions) may not be practicable in certain instances, e.g., a potential integrity issue that materially threatens the league and requires immediate public comment.  Also, information reported to a sports governing body under this provision (that may relate to multiple states) may not be decipherable from information reported under other operative regulations in other jurisdictions, leading to confusion as to whether Director approval is required for certain disclosures.  We thus respectfully request that this section be revised as follows:

K. A regulated entity shall promptly report information relating to conduct described in subdivision I. 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 or if disclosure is necessary to allow the sports governing body to conduct and resolve integrity-related investigations.  The sports governing body shall endeavor to provide the Director with prior notice of any such disclosure to conduct or resolve integrity-related investigations to the extent reasonably practicable.

B. The narrative component of the application shall include information describing:

5. If applicable:

b. The identity of any partner, subcontractor, or other affiliate through which the applicant wishes to demonstrate compliance with the requirements of this chapter; and[1]

11 VAC 5-70-60. Principal Applications.

B. A principal who will be employed in a managerial capacity for a sports betting platform on behalf of a permit holder:[18]

B. Identification Card

1. An identification card shall display a photograph of the licensee and, at a minimum, indicate:

1. The individual's name;b. License Number[1]

11VAC5-70-180. Requests from Sports Governing Bodies. *UPDATED*[1]

1. By written request in the form and format required by the Director, a sports governing body may ask the Director to restrict, limit, or prohibit sports betting on its sporting events, or to restrict the types of bets on such sporting events that may be offered by a permit holder.
2. For any request made by a sports governing body under subsection A.:

1. The requester 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;  any steps the sports governing body has taken in relation to that activity, and any other relevant information surrounding the relevant betting or other activity relating to the sports governing bodies’ concern to significant and unreasonable integrity risk.[2]

1. 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.
2. 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.[1]

11VAC5-70-260. House Rules. *UPDATED*

1. 1. House rules shall include minimum and maximum wagers, as approved by the Director.[1]

2. At least every 90 days a permit holder shall provide the Director evidence that the geolocation system is updated to the latest solution, whenever a new solution is implemented.[1]

6. The Director may issue additional geolocation requirements in the form of a technical bulletin.[2]

D. If a permit holder determines that the information provided by a player to make a deposit or process a withdrawal is inaccurate or incapable of verification; fails to verify the identity of the player; or the player violates the policies and procedures of the permit holder, the permit holder shall, within its own discretionary timeframe ten days,[1] require the submission of additional information from the player that can be used to remedy any violation or failure to verify the identity or funds deposit or withdrawal information of the player. If such information is not provided or does not result in verification of the player’s identity or deposit or withdrawal information, the permit holder shall:

1. Immediately suspend the player account and not allow the player to place wagers;

2. Submit any winnings attributable to the player to the Director for distribution to the Problem Gambling Treatment and Support Fund established pursuant to § 37.2-314.2.;

3. Refund the balance of deposits made to the account to the source of such deposit or by issuance of a check; and

4. Deactivate the account.[2]

11 VAC 5-80-20 Sports bettors’ bill of rights

1. A permit holder shall publish prominently on its platform the Virginia Sports Bettors’ Bill of Rights in the form established and made available by the Department on its website.[1]

11 VAC 5-80-90 Sports betting platform features

A sports betting platform must possess the following features:

1. A prominent link to information about the permit holder’s self-exclusion program
2. Ample opportunities for a player to take note of the passage of time
3. Game designs Responsible Gaming Limits that promote breaks in play and avoidance of excessive play

[1]

4. Practices and procedures on the site do not reinforce myths and misconceptions about gambling
5. Information about the website’s terms and conditions is readily accessible
6. Promotional or free games do not mislead players
7. Notification to players of age-verification procedures
8. Access to credit is prohibited

   Cash transfers and automatic deposits are prohibited or restricted

9. Games display credits/spending as cash[2]

[1] We respectfully recommend removing this section as it may be a carryover from Lottery Rules.  Further we recommend clarifying that promoting breaks in play can be solved with responsible gaming “reality checks” that promote breaks in wagering/play.

11 VAC 5-80-100 Security of funds and data

1. A permit holder shall comply with all applicable state and federal requirements for data security.
2. A permit holder shall not share information that could be used to personally identify a sports bettor with any third party other than the Department, law enforcement with a warrant or subpoena or a credit-reporting agency. Information that could be used to personally identify a sports bettor includes gaming habits.[3]

G. 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 limited to:[4]

Sports betting permit holders must employ industry best practices to verify the age of the account holder and block access by anyone under 21 years of age. All sports bettors must have easy access, through their preferred sports betting platform, to resources about addiction warning signs and treatment. Sports betting permit holders are to be proactive in preventing at-risk customers from becoming problem gamblers by implementing responsible gaming programs, trainings, and other practices to help sports bettors play responsibly.

5. 5. The Right to Recourse

 A sports bettor has the right to recourse against a sports betting permit holder in the event he or she believes a transaction or other interaction has been mishandled. Such recourse is essential to establish the credibility of legalized sports betting and to maintain consumer trust. Sports bettors have the right to seek relief as outlined in the Virginia’s sports betting laws and regulations, and sports betting permit holders must have a clear, expeditious protocol to address concerns raised by sports bettors.

(continued from prior post due to space limitations)

11VAC5-70-230(C) Sports governing bodies should receive account-level betting information

Virginia’s sports betting law requires permit holders to cooperate with sports governing bodies’ investigations, including the provision of account-level betting information, and audio and video files. See Virginia Lottery Law; Sports Betting Section 58.1-4043(E). As the Board is aware, this information will be important to the resolution of sports betting investigations. As written, however, the Board’s draft regulations only require regulated entities to provide account-level betting information and data files to the Executive Director and law enforcement agencies. To better reflect the language and intent of the statute, we urge the Board to amend this provision as follows:

C. A regulated entity shall provide or facilitate provision of account-level betting information and data files relating to individuals placing wagers and any other information necessary for investigations conducted by the Director, a sports governing body, or a law enforcement agency.

11VAC5-70-230(M) Sports governing bodies should receive real-time, account-level information from betting operators as set forth in the sports betting statute

Virginia’s sports betting law mandates that permit holders share in real time, or as frequently as is commercially reasonable, certain betting information with sports governing bodies. See Virginia Lottery Law; Sports Betting, Section 58.1-4034(B). However, the Board’s draft regulations undercut this mandate and state that disclosure is only required if the Director determines, in his or her sole discretion, that such information sharing is “necessary.” We recommend that the Board amend this regulation to harmonize it with the type of data sharing that is contemplated in the statute.

Using technology to identify potential integrity issues based upon abnormal betting patterns is essential for all parts of the sports betting ecosystem, and sports governing bodies are best positioned to detect integrity issues across operators and across jurisdictions. Because sports betting in the United States is currently being legalized and regulated at the state level, there simply is no interstate system that collects and monitors betting data on a nationwide basis; states thus remain unable to detect abnormal betting activity that may occur across multiple jurisdictions. Sports governing bodies are uniquely positioned to fill this gap for their sports. They also have resources that no regulator or sports betting operator has in terms of investigative reach and authority, including access to teams, referees, players, and other insiders. For all of these reasons, we recommend the following amendment to the proposed regulations:

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Sincerely,

Dan Spillane, Esq., National Basketball Association Mr. Andy Levinson, PGA TOUR

Marquest J. Meeks, Esq., Major League Baseball

Sports governing bodies should not be subject to licensure merely because sports betting operators accept wagers on the events that our organizations oversee. Under the draft definition of sports betting supplier, any entity that “manages, administers, or controls the games on which wagers are initiated, received, or made . . .” qualifies for this level of licensure. As written, this definition is overbroad, and can be interpreted to include sports governing bodies; however, we do not believe it was the Board’s intention to require all entities that “administer . . . games” to obtain supplier licenses.  We encourage the board to clarify that sports governing bodies do not—by virtue of their status as entities that present and oversee sporting events—qualify as suppliers by amending the relevant definition as follows:

“Sports betting supplier” or “Supplier” means a person who: (a) manages, administers, or controls wagers initiated, received or made on a sports betting platform; (b) manages, administers, or controls the games on which wagers are initiated, received, or made on a sports betting platform, excluding sports governing bodies as defined in this section; or (c) maintains or operates the software or hardware of a sports betting platform, including geolocation services, customer integration, and customer account management."