Virginia Lawmakers Push New Rules and Taxes for Fantasy Sports Industry

Virginia lawmakers are taking steps to change how daily fantasy sports companies do business in the state. Delegate Paul Krizek introduced House Bill 145, which just passed its first test. A House subcommittee voted to send the bill to the Appropriations Committee, with all members in favor.

Virginia Lawmakers Target Fantasy Sports With New Taxes and Safeguards

The bill aims to update Virginia’s Fantasy Contests Act by setting up a tax system and boosting oversight. If passed, fantasy sports companies would have to pay a 10% tax on the money they make from contests in Virginia. Most of this tax money – 95% – would go to the state’s general fund. The other 5% would help fund programs to treat and prevent gambling addiction.

HB 145 also wants to make the rules stricter for fantasy sports businesses. These companies would need to get a permit from the state before they can run contests. These permits would last for three years. The fees for applying and renewing these permits would help pay for regulation and support efforts to combat gambling addiction.

The new law spells out several rules to protect consumers. Companies would need to check that players are at least 21, keep player money separate from business accounts, and have enough cash to pay out prizes. Other safety measures include giving options to ban yourself, restricting insider access to private data, and stopping staff or connected people from joining public games.

Virginia Lawmakers Move to Curb Betting-Like Fantasy Sports Games

Each year, external experts would have to check if companies follow both the financial and day-to-day rules. Rule-makers would also get the power to hand out fines, revoke permits, or take away licenses when someone breaks the rules.

HB 145 also tightens the definition of a fantasy contest. The bill highlights competitions between players that rely on skill and stats from multiple athletes. This rules out “pick ’em” or house-backed games that look like regular sports betting, which worries regulators across the country more and more.

Virginia was one of the first states to recognize daily fantasy sports in 2016, but its first setup had a flat licensing fee and no tax on revenue. Lawmakers now seem keen to make the industry more similar to other regulated gaming areas.

States across the country are looking at tougher rules for fantasy sports. Some places, like Illinois and Florida, are thinking about new ways to control it. Others, such as California and Arizona, have already cracked down on certain fantasy sports products.

People who back HB 145 say the changes will bring in more money for the public and make things safer and clearer for players. The bill moving forward shows that more people want to keep a closer eye on fantasy sports as it keeps changing and getting more like sports betting.

If lawmakers pass the bill and the governor signs it, these new rules could change how fantasy sports work in Virginia from 2026 on.