Democrats in the Virginia General Assembly are advancing legislation that could impose a 10 percent tax on fantasy contest revenue and tighten regulations on operators. This could change how daily fantasy sports operators do business in the state.
Virginia Democrats are advancing HB 145, proposing a 10% tax on daily fantasy sports and stricter regulations for operators. Images for representational purposes. (unsplash)House Bill 145 (HB 145), proposed by Representative Paul Krizek, has passed its preliminary examination. All members of a House subcommittee voted to send the bill to the Appropriations Committee.
Also read: What the new online gaming rules could mean for fantasy sports and real-money games.
What is the state of the bill?Under the bill introduced by Democratic lawmakers, fantasy sports operators would have to pay a 10 percent tax on the revenue they generate from contests in Virginia.95 percent of the tax revenue will go to the Virginia General Fund, while 5 percent will be earmarked for gambling addiction prevention and treatment assistance programs.To conduct the competition, operators must secure a three-year permit; Application and renewal fees will help pay for regulatory oversight and enforcement.The bill mandates stricter controls on player protection. Players must be at least 21 years of age and will be age verified. It also mandates the separation of player funds from operating funds and sufficient cash to pay out prizes, to name a few.If someone violates the rules, external experts will be appointed who will also have the power to impose fines, cancel licenses or revoke permits.The bill further refines what qualifies as a “fantasy contest” by limiting it to skill- and statistics-based games involving multiple athletes, effectively excluding “pick ’em” or house-backed games that are similar to sports betting.Also Read: Fantasy plays: Players to start and sit for NFL Week 15
“Change will bring more money to the public”In 2016, Virginia became one of the first jurisdictions to recognize daily fantasy sports. Nevertheless, the initial arrangement included no revenue tax and a flat licensing cost. Lawmakers are now keen to bring the sector closer to other regulated gaming sectors.
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Many states, including California and Arizona, have moved to stricter rules for fantasy sports, according to Gambling News. According to the news outlet, supporters of HB 145 claim the changes will “bring in more money for the public.”
