Virginia could become the next state to join the fantasy sports crackdown.
Old Dominion Del. Paul Krizek (D-Fairfax) told the Virginia Mercury this week that fantasy sports is “a compliance nightmare” and something that “needs to be reined in.”
Krizek, who is on a gambling law subcommittee, plans to introduce legislation in the 2025 General Assembly session to clarify the ambiguity between legal sports betting in the Commonwealth and prop-centric, pick ’em-style fantasy sports. He also wants to up the age limit on for-cash fantasy games from 18 to 21.
Krizek has many of the same issues with fantasy sports that other lawmakers and regulators in Massachusetts, Florida, and New York, among others, have had in recent months.
The lawmaker said that DFS operators like Underdog Fantasy and PrizePicks are creating the same prop bets that traditional, regulated sportsbooks offer.
“I think they’re kind of taking advantage of the lack of regulatory oversight,” Krizek said.
Not the same?
Unlike traditional sportsbooks, fantasy sports operators aren't subject to a 15% tax rate on adjusted gross gaming revenue. DFS also isn’t regulated by the same state entity.
Sports betting is handled by the Virginia Lottery, which requires an initial $250,000 fee to receive an operating license and a $200,000 annual renewal. DFS is overseen by the Virginia Department of Agriculture and Consumer Services, which charges fantasy operators $8,300 to obtain and renew licenses.
During a recent subcommittee meeting, Sen. Bryce Reeves (R-Spotsylvania) told DraftKings, which operates a sportsbook and DFS in the Commonwealth, that they are working to “get it to fair and equal ground.”
Attorney General Jason Miyares wrote in a letter last year that DFS sites offering over/under props must comply with the same requirements as sports betting operators, but no enforcement has occurred.
The Coalition of Fantasy Sports said in a statement to the Virginia Mercury that it plans to work with legislators and remain fully compliant with Virginia law.
What could they do?
Old Dominion lawmakers and regulators can look to other states on how to handle the murkiness of prop-style DFS sites.
New York, Florida, and Michigan are markets that have outlawed the pick ’em-style games completely. PrizePicks has found a way around this by offering an arena product that groups players and pits them against each other in a game using prop picks.
Virginia could adopt a similar system that isn’t advantageous to DFS operators but differentiates DFS and sports betting enough to suit some regulators.
The Commonwealth could also take a more drastic approach and ban them altogether or make the DFS operators pay the same rates as legal sportsbooks.
Both seem less likely, and the latter would greatly hurt the fantasy site’s chances of staying in the state. Regardless, 2025 appears to be a year of clarity for Virginia.
