Sports Betting Operators Concerned with Draft Regulation

Sports betting rules in Virginia released for public comments by the state lottery were subdued to criticism by some of the operators. Big wagering names such as Flutter-owned FanDuel and Boston-based DraftKings openly expressed their discontent at some of the consumer protection measures put forward for discussion.

The draft regulation was published by the Virginia Lottery as part of its task to oversee the licensing process in the state, and remained open for public comments until September 9. The comments expressed during that time revealed some of the concerns of sports betting operations regarding one section of the regulation, the Sports Bettors Bill of Rights.

Odds Calculation, Handle Data and Payout Amounts                                         

The provision for data to help customers make informed decisions about their bets that requires operators to explain how the odds were calculated, including handle data and payout amounts created the biggest discontent among sports book operators. Both DraftKings and FanDuel expressed their concern that such a requirement would force them to re-engineer their operations as such a requirement does not exist in any other state.

The provision of such data in real-time creates a logistical challenge on a large scale for the operators and they claimed they had neither the space nor the processing capabilities to meet that requirement. Moreover, the re-engineering of the applications to include capabilities to provide such details which are essentially immaterial to the payout a bettor would receive from a successful wager, would affect the user experience in a negative way.

Self-Exclusion to Put Extra Operational Burden

Another area of concern for sports betting operators is the process of self-exclusion in which the state requires players to have the ability to exclude voluntarily from sports betting. The Virginia Lottery’s proposal asks for operators to grant players’ wishes to ban themselves for a period of 2 or 5 years, or for life, by providing their social security and telephone numbers.

If such a player is caught betting, the lottery proposes for the operator to have the player’s account frozen and winnings or other things of value seized, where operators feel asking them to seize the money in the player account may be too much. In addition, some operators suggest the process be changed so that the self-exclusion happens through the lottery website, instead of using the sports betting apps.

Advertising Constraints

The third area of concern regarding the draft regulation is advertising. As expected, minors cannot be targeted but the biggest strain is posed by the requirement to have all advertising, marketing and promotion materials approved by the Virginia Lottery prior to their publishing in the app or the platform.

Sports book operators feel this would take away from their capabilities to post options quickly and came up with a counter proposal to be allowed to just notify the regulator and continue with their campaigns without waiting for an approval.

The regulator responded to criticism by stating that all public comments would be taken into account before setting the final draft, and upon finalizing the rules, the Virginia Lottery would begin to accept license applications.