July 15 is the first of two red-letter dates for anyone with an interest in legal Virginia sports betting. The state’s Lottery will roll out proposed regulations at its July 15 meeting and, as required by law, 60 days later it will vote on those regulations in anticipation of getting licensed systems up and running by early 2021.
Virginia lawmakers legalized sports wagering in April, and the law went into effect on July 1. Since the law passed, Virginia Lottery Executive Director Kevin Hall and his staff have been on the sports betting fast track.
“We’ve known it was coming,” Hall told Sports Handle on Monday. “We had some nominal impact during the sausage-making process, but we got started ahead of the July 1 date. We’ve already kind of done a deep dive on some of the models out there. We’ve established relationships with operators.”
Expect Virginia operators to launch in early ’21
More importantly, Hall and his staff have mapped out a timeline and interpreted some of the ambiguous sections of the law. On that first key date of July 15, the Lottery will share its proposed sports betting rules with the Lottery commission and simultaneously post them online for public review, beginning the 30-day comment period.
Many in the industry have been pointing to operators being able to go live in Virginia in December, but Hall says it’s more likely to be January or February of next year.
While the Lottery is required to approve regulations by Sept. 15 and the application period following that is set at 90 days, Hall said that even with a Sept. 15 approval, the regulations won’t technically be official until they are published in the Virginia Register, which he anticipates taking about a month after approval.
The regulations “need to be published in the Virginia Register in October, so we could begin to accept applications at that point. I imagine the first licenses could be issued in January or early February.”
Tapped as the regulator, the Virginia Lottery continues its work to bring sports betting and casino legislation to life.
“We recognize that there can't be any do-overs here. We have to get this right from the start." https://t.co/bxs7EovBfe
— Wayne Epps Jr. (@wayneeppsjr) July 7, 2020
Either way, the idea that a state with no already-existing legal gambling activity and oversight could go from legal in April to live the following February is a heavy lift. Virginia’s timeline resembles Colorado‘s — voters there legalized sports betting via referendum in November 2019 and the first bets were placed on May 1, 2020, as mandated by law. But Colorado already had casinos, a regulatory board, and much of the key infrastructure in place.
In Virginia, Hall and his staff aren’t only crafting regulations for sports betting, but they’re also on a parallel track sorting out regulations and licensing for in-person casino gaming, as the legislature also authorized the building of five physical casinos — all of which may integrate legal sports betting — throughout the state.
In addition, the law allows for professional sports venues that have headquarters, training facilities, or stadiums in Virginia to offer sports betting. To date, that means both Washington’s to-be-renamed NFL team, whose headquarters are in Ashburn, and MLS DC United, which since 2019 has practiced at a facility in Springfield, could offer sports betting platforms.
How many mobile/online sportsbooks will be allowed?
Among the biggest questions created by the language of the new law is how many mobile/online sports betting platforms will ultimately be allowed in Virginia. Mobile platforms can either stand alone or be offered in conjunction with a physical casino. Physical sportsbooks will be legal at professional sports venues and casinos.
The law requires a minimum of four and a maximum of 12 mobile platforms, but there are multiple exceptions. None of the five potential casinos, sports franchises (Washington NFL team), or operators of a facility (MLS DC United) would count toward the minimum while sports franchises and operators of a facility do not count toward the maximum number of licenses.
By that reasoning, the Lottery says it will offer a minimum of 11 mobile platforms and a maximum of 14. Here’s how the breakdown will work: For the minimum of 11, the Lottery is counting the four required by law, five for casinos, and one each for the Washington NFL team and DC United. For the maximum of 14, the Lottery is counting the limit of 12 set by law plus one each for the Washington NFL team and MLS DC United. In this scenario, the five casinos are included in the limit of 12.
How does this shake down for operators? If the minimum number of mobile licenses are issued, there would be four available for mobile-only platforms (i.e. not tethered to a casino or sports venue/team, such as DraftKings or FanDuel). If the maximum number of mobile licenses are issued, there would be seven available for mobile-only platforms.
in addition, each of the new casinos must be approved by local voters, and those questions will be posed on the November ballot. The law appears to allow for approved casinos to go live with mobile/online sports betting ahead of opening a bricks-and-mortar location. It also implies that a professional sports venue with a sports betting license could offer a mobile/online platform before opening a physical location.
The number could change in the future — the law leaves open the possibility that any major professional sports team (read: MLB, MLS, NBA, NFL and NHL) with a foothold in Virginia could have access to a sports betting license. But that’s a side dish Hall isn’t going to put on his already full plate just yet.
Law does not mandate a set launch date
Hall said that crafting regulations for both sports betting and casinos on such a tight time frame is challenging, but not insurmountable. Besides the obvious — regulations and licensing — there are plenty of small pieces, including vetting all manner of sports betting companies from those providing geolocation services to those offering risk management services, creating a self-exclusion program, and developing a “consumer’s bill of rights.”
“We are kind of building the plane while we are flying it, those are key pieces that need to be handled before the operators can go live,” Hall said. “It’s important to get it right and get it right from the start, and I think we’ve done a good job getting ourselves ready. It’s no small thing that I think we are going hit the deadlines.”
Exactly how Virginia will handle launching operators to go live isn’t clear yet. In Colorado, lawmakers set a launch date of May 1, 2020, marking the first time since the fall of the Professional and Amateur Sports Protection Act that a law dictated a specific date for the state to be prepared to go live. Four online operators took advantage of that ready date, while others continue to debut.
In most other states — Illinois and Michigan are both recent examples — the regulatory body begins accepting and approving applications as they come in, and operators launch based on a combination of their own readiness and the state’s ability to sign off on the final details.
In Pennsylvania, for example, the Hollywood Casino was the first retail sportsbook to go live on Nov. 15, 2018, followed by the Rivers Philadelphia and Rivers Pittsburgh a month later, and it wasn’t until Jan. 10, 2019, that Parx Casino Sportsbook opened. In each case, the Pennsylvania Gaming Control Board allowed the sportsbooks to soft launch during a 72-hour period during which its inspectors were present.
If Hall’s prediction is right, Virginia should have at least some mobile/online platforms up and running ahead of the Super Bowl and possibly the NFL playoffs, both key events for a sportsbook.
Virginia studying other live sports betting states
Virginia wasn’t the first state in its region to approve sports betting — and from Hall’s perspective, that’s OK. Neighboring West Virginia was among the first to offer sports betting in the summer of 2018 shortly after the PASPA fell, and D.C. launched its GamBetDC sports betting app in May. Hall has been paying close attention — not just at home, but across the country — as other jurisdictions manage sports betting. And the end game is to get it right out of the gate.
“My sense is that the New Jersey framework is kind of road-tested and the industry is comfortable with it, and it’s operating pretty successfully,” Hall said. “We can take from here and borrow from there. We’re glad not to be first movers.
“It’s important to get it right and get it right the first time.”