Virginia increasingly looks like it could be the first state to turn a daily fantasy sports regulatory bill into reality. The Senate passed a DFS bill on Wednesday after the House approved the same piece of legislation earlier in the week, meaning the bill will head to the desk of Gov. Terry McAuliffe.
DFS bills have been gaining momentum in a number of states, but no other state has seen both chambers pass legislation.
The backstory of the Virginia DFS bill
DFS legislation has been rolling through the Virginia General Assembly at lightning speed. SB646 — the bill heading to the governor — was introduced on Jan. 18.
The only thing that slowed it down was that the House and Senate originally passed different DFS bills, and the two chambers had to go back, conform the bills to one another, and pass them again.
The House passed the bill 80-20, and the Senate approved the legislation 31-9.
Inside the DFS bill
The bill sets up regulation of the DFS industry. Provisions include:
- Operators must register with the Department of Agriculture and Consumer Services.
- Operators must pay a $50,000 fee to register in the state.
- The DACS may investigate violations of the act and is granted powers to enforce it.
- Sites must take steps to prevent employees and their immediate relatives from playing in contests; to ensure security of data at the sites; and to segregate player funds from operational funds, among other consumer protections.
- Sets a minimum age of 18 to play DFS.
- An annual audit of all registered operators is required.
While the bill has more strenuous language than legislation that appears in a lot of states, it does fall into the class of bills that potentially authorize forms of sports betting that don’t resemble fantasy sports.
The $50,000 fee for access to Virginia players may also be too high for some small operators to afford in the current environment.
Reaction from DraftKings
DraftKings Director of Public Affairs Griffin Finan, issued the following statement in the wake of the bill’s passage by the Senate:
“Today the Virginia General Assembly took an important step toward ensuring that fans in Virginia can continue to enjoy fantasy sports contests with thoughtful and appropriate consumer protections in place. We thank Delegates Jackson Miller and Marcus Simon and Senator Ryan McDougle for their leadership in bringing a common sense regulatory framework through the legislature. We are grateful for their support and are actively engaged with dozens of legislatures around the country to replicate this success.”
Just one step left
The bill must still be signed by McAuliffe before it becomes law. Given the overwhelming margins with which the bill passed both chambers, it would be unlikely to think he would veto it. A straight veto in Virginia could be overridden by a two-thirds vote of both houses.
McAuliffe’s options:
- Sign the bill into law
- Amend the bill and return it to the GA for approval
- Veto the bill
- Take no action on the bill; in that case, it would then take effect seven days after it officially landed on his desk.
Now the DFS industry will wait to see what the governor does. If the bill becomes law, that would create a new dynamic for the industry: The first state with a regulated environment for conducting fantasy contests.
