Final regulations due in two months
The Virginia Lottery has released its initial draft regulations for the state’s upcoming sports betting industry, beginning a 60-day public comment period. The Lottery Board must adopt final regulations by September 15.
“The General Assembly was clear in its expectations for the Lottery to build a regulatory framework around sports betting on an expedited timeline, and we are committed to adopting responsible rules of the road in a timely and transparent way,” explained Lottery Executive Director Kevin Hall.
building the airplane while flying it”
Sports betting only became legal two weeks ago; finalizing regulations in two-and-a-half months is much faster than regulatory processes normally take. Hall said that it is akin to “building the airplane while flying it.”
Virginia does not currently have casino gambling, though that was also legalized with the gambling expansion bill. Thus, for now, all betting will be online. The Virginia Lottery will grant at least four online sports betting licenses and a maximum of 12. When the five brick-and-mortar casinos are built, they can each apply for a license as well, but they will not count against the four-license minimum. In effect, the count to a dozen licenses will not start until after the first four are awarded.
The application fee for a three-year license is $250,000. Operators will have to pay a 15% tax on gross gaming revenue. College sports betting is allowed, but not on games involving Virginia-based schools.
No required hold
Of particular note in the draft regulations is the absence of a mandatory operator hold. There was some talk of requiring a 10% hold by sportsbooks, but that idea was apparently nixed.
Tennessee is imposing a 10% hold on its sports betting operators, a mandate that has been decried around the industry. It is in effect requiring sportsbooks to have a larger profit margin than normal, which means that they will likely have to offer customers worse prices.
When Tennessee announced this regulation in April, industry experts calculated that a 10% hold equated to a -125 vig on a two-sided line. A normal vig is -110. Even if the books keep the vig at -110 on popular sports like NFL football, they could hide bad prices in bets about which customers are not as knowledgeable.
The risk of a mandatory hold is that it could drive bettors to illegal, unregulated sportsbooks for better pricing.
Bettors’ Bill of Rights
Also part of the regulations is the Virginia Sports Bettors’ Bill of Rights, a one-page document explicitly delineating what customers should expect from operators and the state. Taking a page out of the United States’ Bill of Rights, but half as long, the appendix lays out five definitive “rights” players have, ordered using Roman numerals.
Included are: I. The Right to Integrity and Transparency; II. The Right to Data Privacy and Security; III. The Right to Self-Exclude; IV. The Right to Protection of the Vulnerable; and V. The Right to Recourse.
operators have to present customers with all the information they need
They are all fairly self-explanatory, though the first lists additional detail. It focuses on the obligation that operators have to present customers with all the information they need to be educated about their wagers, such as clear odds and payouts. Operators must also be forthcoming with information about systems for reporting fraud and resources for problem gambling.