Virginia, Jan 29: Virginia lawmakers advanced legislation that would impose new taxes and regulatory requirements on daily fantasy sports operators, marking a shift away from the state’s light-touch approach to the industry.
House Bill 145, introduced by Paul Krizek, cleared its first hurdle after a House subcommittee voted unanimously to send the measure to the Appropriations Committee.
If enacted, the bill would levy a 10% tax on contest-generated revenue earned in Virginia. Under the proposal, 95% of the proceeds would be directed to the state’s general fund, while 5% would be earmarked for gambling addiction treatment and prevention programs.
The legislation would also introduce a new permitting regime for fantasy sports operators, requiring companies to obtain a state permit valid for three years. Application and renewal fees would be used to fund regulatory oversight and responsible gambling initiatives, and operators would be subject to annual audits by independent experts.
HB 145 includes a range of consumer protection measures, including age verification to ensure players are 21 or older, segregation of player funds from business accounts, and liquidity requirements to guarantee prize payouts. Operators would also be required to offer self-exclusion tools, restrict insider access to sensitive data, and bar employees or affiliated parties from entering public contests.
The bill further narrows the legal definition of fantasy contests to skill-based competitions that rely on statistics from multiple athletes, effectively excluding “pick ’em” and other house-backed formats that regulators say increasingly resemble sports betting.
Virginia was among the first U.S. states to formally recognize daily fantasy sports in 2016, adopting a flat licensing fee and no tax on operator revenue. Lawmakers now appear intent on aligning the sector more closely with other regulated gaming activities.
The move comes as states across the country reassess oversight of fantasy sports. Legislators in Illinois and Florida are considering tighter controls, while California and Arizona have already taken action against certain fantasy sports products.
If the bill is approved by the legislature and signed by the governor, the new tax and regulatory framework could take effect from 2026, reshaping how fantasy sports operators do business in Virginia.
