The Virginia Lottery on Monday released its second set of proposed sports betting regulations, which include sections on operations, internal controls, and enforcement. The Lottery previously rolled out Phase 1 proposed regulations on July 15 dealing with consumer protections, self-exclusion and applications, among others. Seventeen new proposed rules were added Monday, and the definitions section of Phase 1 proposed rules was updated.
On first review, there doesn’t appear to be anything too out of the ordinary in the latest proposed rules, which cover everything from auditing and banking to allowed wagers, along with requirements for sports betting platforms. Virginia’s new law allows for statewide mobile sports betting, as well as retail sports betting at five yet-to-be-built casinos and specific professional sports venues.
The Lottery posted two versions of the Phase 2 rules on Monday — at about noontime, an 85-page version was posted, and later in the afternoon was replaced with a 69-page version. The second version, though it has fewer pages, covers more ground, including sections on “official league data” and “requests from sports governing bodies,” as well as one titled “liability pooling,” which were absent in the first version.
“The draft process is ongoing. We inadvertently uploaded a previous draft and as soon as we realized that, we uploaded the corrected draft, which contains more information, corrected numbering and additional sections,” a Lottery spokesperson told Sports Handle.
No college props, no betting on Virginia college teams
The proposed rules echo the law in terms of permitted wagers, as Section 70-170 details the allowance of prop bets for all events except collegiate events or a wager placed on an injury, and allows for in-play wagering as defined by the statute. The Virginia General Assembly and Senate went back-and-forth about allowing wagering on college sports and eventually agreed to prohibit betting on Virginia college teams and prop bets on any college sports.
Wagering on events featuring Virginia college athletic programs is prohibited. Bettors, however, will still be able to wager on college events in Virginia that do not involve Virginia teams (i.e. the NCAA men’s basketball tournament) and big-time college football or basketball, as long as no Virginia team is involved.
— Virginia Business (@VirginiaBiz) August 1, 2018
The proposed regulations also detail the use of official league data as well as how a sports governing body can request that official league data be used. The law — like others across the country — stops short of mandating the use of official league data to settle some bets. Instead, it leaves open the option for a sports governing body (i.e. the NFL, Major League Baseball or the NCAA) to formally request that operators use this data.
In the proposed regulations, once a sports governing body requests the use of official league data and the Lottery approves the request, operators must begin using official league data within 60 days.
A permit holder can opt out of the official data requirement if the sportsbook operator provides sufficient information to the Lottery Director that one of the following conditions has not been met:
1. The sports governing body is unable to provide, on commercially reasonable terms as determined by the Director, a feed of official league data; or
2. A permit holder demonstrates to the Director that a sports governing body has not provided or offered to provide a feed of official league data to the permit holder on commercially reasonable terms, by providing the Director with sufficient information to show:
a. The availability of a sports governing body’s official league data for such bets from more than one authorized source;
b. Market information regarding the purchase, in Virginia and in other states, by permit holders of data from all authorized sources;
c. The nature and quantity of the data, including the quality and complexity of the process used for collecting the data; and
d. Any other information
Some of the other highlights
There is plenty of detail in the rest of the new proposed rules, but most appear to be in line with industry standards. Some highlights:
- Operators are required to keep a $500,000 cash reserve on hand, must have $5 million in liability insurance and $15 million in errors and omissions insurance;
- For integrity monitoring, operators are required to be members of the Global Lottery Monitoring System, and must immediately notify the Lottery Director of suspicious activity;
- Under the proposed rules for advertising and marketing, operators must refrain from advertising to anyone under the age of 21, including avoiding any media outlets — including social media — that are geared for those under the age of 21. The regulations also caution operators against targeting potential
vulnerable groups through advertising campaigns, including self-excluded bettors.
- The “Platform Requirements” section carefully spells out what operators must provide to an independent testing lab before going live, and includes this section:
A permit holder shall provide the Director with remote, read-only, real-time access to the sports
betting platform that shall include, at a minimum:
1. Complete access to all wagers, including canceled, voided, pending, and redeemed wagers;
2. The ability to query or sort wagering data; and
3. The ability to export wagering data.
While regulators in most jurisdictions have similar access to sports betting platforms, what makes this proposed rule unusual is the phrase “real-time,” meaning that the Lottery office could monitor activity as it is happening, rather than after the fact. As they have in other states, operators may push back on sharing real-time information.
Public-comment period open until Sept. 9
Stakeholders will have about a month to comment on proposed rules before the Lottery board votes on them in September. The public-comment period closes on Sept. 9 and the next Lottery board meeting is scheduled for Sept. 15.
In Virginia, public comments on proposed sports betting regulations have begun rolling in, and bettors want sports betting live ASAP.https://t.co/7DYu5dDhPg
— Sports Handle (@sports_handle) August 6, 2020
To date, the Lottery has received public comments from about a dozen interested parties, but no potential operators or suppliers.
Virginia lawmakers legalized sports betting in April of this year, amidst the COVID-19 crisis, and put regulators on a fast track to be ready for operators to go live. Regulations must be approved by Sept. 15, and the Virginia Lottery is aiming to have the first operator take sports bets before the end of the year — which would technically mean that Virginia went from legal to live in six months, as the law became effective on July 1.