RICHMOND, Va. – Lawmakers in Virginia are considering legislation that could change the future of fantasy sports in the Commonwealth.
From office leagues to high-stakes season-long contests, fantasy sports have become a major part of the football experience for fans across the country and the state.
Now, two newly proposed bills in the Virginia General Assembly—HB145 and SB129—would significantly change how fantasy sports companies, like FanDuel or DraftKings, operate in Virginia.
The legislation, known as the Fantasy Contests Act, would require fantasy contest operators to pay a 10 percent monthly tax on contest revenue, a $50,000 application fee for a three-year permit, and a $50,000 fee which will go into the Problem Gambling Treatment and Support Fund. In addition, fantasy contest operators will be required to pay a $25,000 renewal application fee.
The proposed fees would be a sharp increase from the current $6,500 annual registration fee and zero tax on revenue.
Supporters of the bill say it closes a loophole, arguing some companies have blurred the line between fantasy sports and traditional sports betting.
“It’s a lot of fun. But it can be addiction though,” said Lucas Rogers, who lives in Roanoke.
Industry groups, however, warn the changes could have unintended consequences, especially for smaller operators and the people who play fantasy sports.
“They would either exit the state or they would increase fees for Virginia residents, one of the two,” said Peter Schoenke, a board member with the Fantasy Sports & Gaming Association. “Neither one’s a great thing for consumers.”
Schoenke says fantasy sports are legally considered games of skill, not sports betting or gambling. He added that higher fees could push smaller companies out of Virginia altogether.
“[To] the fantasy sports fans in Virginia, what I would say to them is, contact your legislator. I mean, you’re not going to be able to play some of the games and contests that you did before. That’s the reality of the situation,” Schoenke said
He adds that fewer operators could also mean less innovation and fewer options for casual players who enjoy joining contests outside of their work or friend groups.
The bill would not affect free fantasy leagues among friends, but companies could pass down the added costs to players.
“I would definitely feel some type of way if they made it more expensive,” said Roanoke resident Gloria Stukes, who plays fantasy sports.
If passed, 95 percent of the tax revenue would go into Virginia’s general fund, with the remaining 5 percent dedicated to the Problem Gambling Treatment and Support Fund.