With the passage of the Fantasy Contests Act, Virginia recently became the first US State to legalize daily fantasy sports. It’s a massive leap forward for the beleaguered daily fantasy sports industry, but it might not be such great news for smaller and start-up operators.

At its core, the Fantasy Contests Act, which was signed into law by Virginia Governor Terry McCauliffe, is a big win for daily fantasy sports operators like Fan Duel and DraftKings.

Not only does the law provide a relatively friendly regulatory framework for them to conduct business in, it also classifies daily fantasy sports as a, “game of skill.” This distinction could be incredibly important to industry operators as they battle to stay legal in other US States.

Both DraftKings and Fan Duel lavished praise on the law in separate statements to the press. DraftKings’ statement summed up the issue saying:

Today, Virginia became the first state in the nation this year to put in place a thoughtful and appropriate regulatory framework to protect the rights of fantasy players. We thank Governor McAuliffe for his leadership and advocacy and are hopeful that other states across the country will follow Virginia’s lead.

From that statement, it seems pretty clear that the daily fantasy sports industry will be using Virginia as a regulatory model that will be used in other states where DFS legalization is an issue.

The law is not, however, without its critics. Some industry watchers say that the $50,000 licensing fee Virginia is asking is more than most smaller operators could handle. If that’s the model that’s going to be used nationwide, it would definitely limit competition. (Not that DraftKings and Fan Duel would mind.)

For now, however, the daily fantasy sports industry is savoring a big win in a battle that’s likely to go on for quite some time.

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