The Commonwealth of Virginia has become the first U.S. State to legalize and regulate daily fantasy sports. It’s the first good news the beleaguered daily fantasy sports industry has had since its free-fall began last October.

The Fantasy Contests Act (SB 646) was approved by both houses of the Virginia Legislature and is now awaiting  Governor Terry McCauliffe’s signature. If and when McCauliffe approves the measure, it will be the first piece of legislation of its kind in the United States.

It’s worth noting SB 6464 goes out of its way to distinguish daily fantasy sports from traditional sports betting. To that end, fantasy sports are limited to contests that are based on the performance of individual players, not teams and not individual players.

That means that anything with a point spread is still off-limits in the Commonwealth.

The bill’s authors also make it clear that they do not consider daily fantasy sports to be a form of gambling. That said, they pointedly avoid the game of skill vs. game of chance argument that’s been dogging the industry through its troubled times.

DFS operators that want to stay in Virginia’s good graces must also hire third party auditors to evaluate their processes and procedures. The issue of transparency, and potential insider trading, was the impetus for the industry’s massive free-fall in the fall of 2015.

Virginia lawmakers are also barring players who participate in a particular sport from playing DFS tournaments that involve their sport. (Thought Virginia doesn’t currently have an NFL, NBA, NHL or MLB team, it’s likely that players who play for Washington D.C. teams could live in the state.)

The big question now is whether other states will use the Virginia bill as a template for their own daily fantasy sports regulations.

Tags: ,

Related posts: