The public-comment period on the proposed Virginia sports betting regulations closed on Sept. 9, and stakeholders had plenty to say — operators shared their disdain at the idea of having to post handle and odds for individual bets, professional sports leagues balked at the implication they might have to apply for sports betting licenses, and no one thinks its a good idea to ban betting on Olympics sports (not to mention, the law doesn’t expressly prohibit it).
The 183 comments from more than 30 stakeholders and private citizens are a lot to digest, and the Virginia Lottery has only until Sept. 15 to do so and to incorporate changes into its proposed rules. The new state law mandates that regulations be adopted by Sept. 15, and the Lottery Board has a meeting to do just that set for Tuesday. The meeting will be held virtually due to COVID-19 restrictions.
The list of commenters opened a window into which operators are considering applying for the limited number of sports betting licenses. According to the Lottery, it interprets the law to mean that up to 14 mobile/online licenses will be available when the Lottery opens the application process. That number could rise in the coming years should any new pro sports teams choose to make Virginia their home.
All big-name sportsbooks eyeing Virginia
Among the commenters were BetAmerica, Caesars Entertainment, DraftKings, FanDuel, Hard Rock International, Penn National, PointsBet, Rush Street International (BetRivers), theScore, and William Hill.
Hard Rock (Bristol), Caesars (Danville) and Rush Street (Portsmouth) have already partnered with three of the five cities that could have land-based casinos. Those partnerships all but cement the operators’ chance of being licensed.
As the NFL returns, Virginians still can't legally gamble on sports yet.
But state regulators and big sports betting platforms are hashing out the rules for an early 2021 launch.https://t.co/sASJV1JNH7
— The Virginia Mercury (@MercuryVirginia) September 10, 2020
The proposed regulations were issued in two phases, on July 15 and Aug. 10, and stakeholders submitted comments on both the Phase 1 and Phase 2 comment pages.
Phase 1 covered sports betting licensing and consumer protections, including a first-of-its kind Sports Bettors Bill of Rights, and Phase 2 covered operations and internal controls.
Operators balk at having to share handle, odds
Several issues popped up repeatedly in operator comments:
- Opposition to being required to make available handle and odds for individual bets. Most operators argued that this information is not readily available and, in fact, odds continually change in sports betting, unlike with casino games.
- The NFL requested a prohibition on any bets related to officiating (i.e. bets related to penalties or ejections).
- Every operator requested that the Lottery specify that “Know Your Customer” software or vendors be available for use rather than the current rules, which at least imply that operators should vet customers on their own. Most use a third party, which is standard in other legal sports betting states.
- Many operators suggested that they must be nimble with regard to advertising and marketing. The proposed rules call for the Lottery Director to approve new advertising and marketing campaigns, which would slow down the process. There were other red flags within the proposed advertising and marketing rules, including Penn National asking for a more “objective standard” to ensure that materials meet “contemporary standards of good taste.”
- All operators asked for an extension on the amount of time available for security and integrity assessments. The proposed rules call for these assessments to be available at launch; operators are asking for the industry standard of 90 days.
Some additional points
- Multiple operators asked for definition clarification for everything from the term “sports betting” to “affiliate” to “principal” to “managerial capacity.” With regard to principals and managerial capacity, operators are trying to understand who counts in terms of licensing fees. The regulations call for a $50,000 licensing fee for each individual and other fees for those in certain managerial roles on top of the $250,000 licensing fee.
- Operators and companies that handle risk management and/or actually run the platforms requested that the Sports Wagering Integrity Monitoring Association (SWIMA) rather than the Global Lottery Management System (GLMS) be used to monitor real-time account data. The proposed rules specify GLMS, which is often used by lotteries.
Self-exclusion a hot topic
Among the most interesting requests are ones that with a tiny bit of language that could essentially allow a bettor to cancel a wager by putting him- or herself on the self-exclusion list. Every potential operator commented on this language, which reads:
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:
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.
The Penn National comments put a fine point on why the language should be changed, as Rhea P. Loney, the company’s director of compliance, wrote:
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.
There were many other comments supporting Penn National’s position. In addition, operators requested that self-exclusion forms be available through the Lottery or some sort of central clearinghouse, rather than asking those with a gambling problem to log on to a sports betting site to self-exclude.
Leagues: We shouldn’t need to be licensed
The professional sports leagues — in this case the NBA, Major League Baseball and the PGA Tour — also weighed in, noting that the proposed regulations at least suggest that pro teams should be licensed as sports betting suppliers.
In a letter from officials/lobbyists Dan Spillane (NBA), Andy Levinson (PGA TOUR) and Marquest Meeks (MLB), the three called the current language “overbroad” and said it could 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.”
The leagues also pointed to issues with the proposed regulations in relation to real-time information sharing and the sports governing bodies’ ability to to disclose or receive information related to integrity issues.
GLI alone submitted 50-plus comments
The most prolific commenter was Gaming Laboratories International, which handles integrity, testing and certification for many operators in the U.S. and abroad. GLI alone submitted more than 50 comments.
GLI asked for changes in language, including removing the phrase “sports betting” from references to accounts, players, and permit holders. In addition, the company struck the phrase “self” throughout the text of the proposed regulations in relation to exclusion, preferring instead the terms “involuntary exclusion” and “voluntary exclusion.”
The company offered up revamped definitions of everything from “college sports” and “stadium” to “prizes” and “withdrawals.”
Once the proposed regulations are approved, the Virginia Lottery will submit them for publication in the Virginia Register. At the time of publication, the rules will be considered official, and according to the Lottery, once the regulations are proposed, it will open the application process.
