March 8, 2016
Frank Angst, Blood-Horse
State policies on the legality of daily fantasy games continue to take shape with Virginia the first to legalize and regulate the relatively new form of gaming.
According to the Virginia legislation, each daily fantasy outlet interested in operating in the state will need to register with the Department of Agriculture and Consumer services and pay a $50,000 state registration fee.
Virginia will require sites to provide information on their ownership with the state reserving the right to review the records of those owners, specifically looking for past illegal activities in connection with daily fantasy gaming.
The sites will be subject to annual independent audits. Player funds must be segregated from operating funds. Sites are required to ensure that their players are 18-years-old or older. The sites must take measures to prevent employees, or family of employees, from competing in daily fantasy contests.
Also, sites are required to disclose the number of entries a single fantasy contest player may submit to each fantasy contest and take “reasonable steps to prevent such players from submitting more than the allowable number.”
Critics noted that the bill does little to distinguish between daily fantasy games and more traditional season fantasy, which are played over entire seasons. They also noted that the $50,000 fee could prevent some of the smaller daily fantasy sites from participating in Virginia.
New York attorney general Eric Schneiderman in November issued cease and desist orders to daily fantasy sites. The Texas attorney general issued a January opinion that daily fantasy is illegal under state laws.
Many states are considering regulating the games. New Jersey is considering a plan that would regulate the games in a similar manner to current online gaming in the state and tax the games at a 9.25% rate on gross revenue, according to NJ.com.