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Virginia Passes Fantasy Contests Act
Practical Law Legal Update w-001-5098 (Approx. 4 pages)
Virginia Passes Fantasy Contests Act
by Practical Law Commercial Transactions
| Law stated as of 09 Mar 2016 • USA (National/Federal) |
Virginia recently passed the Fantasy Contests Act, which requires all fantasy contest operators to register with the state. With this act, Virginia becomes the first state to enact a law that specifically regulates fantasy sports contests.
On March 7, 2016, Virginia passed the Fantasy Contests Act (2016 VA H.B. 775 (NS)), which requires all fantasy contest operators to register with Virginia's Department of Agriculture and Consumer Services before they can offer any fantasy contest in the state. Under this new law, Virginia will not consider a registered fantasy contest an illegal gambling operation.
The Fantasy Contest Act defines a fantasy contest as any online fantasy or simulated game or contest in which:
- There is an entry fee.
- The value of all prizes and awards offered to winning participants is established and made known to the participants before the contest.
- All winning outcomes:
- reflect the participants' relative knowledge and skill; and
- are determined by the accumulated statistical results of the performance of individuals, including athletes in the case of sports events.
- No winning outcome is based:
- on the score, point spread, or any performance of any single actual team or combination of teams; or
- solely on any single performance of an individual athlete or player in any single actual event.
Registrations are valid for one year and the initial registration application fee is $50,000. If a party fails to comply with this new law, it can be fined up to $1,000 for each violation (for a total maximum fine of $50,000).
Virginia is the first state to pass legislation that specifically regulates fantasy sports contests. However, fantasy contest operators should anticipate other states following Virginia's model and adopting laws to regulate fantasy contests. Contest operators must also remember to comply with general state and federal laws restricting how parties can run a contest (see, for example, Legal Update, The NYC Marathon Class Action Lawsuit: Avoiding the Risks of Running an Illegal Lottery). For more detailed information on operating contests and other sales promotions, see Practice Note, Running a Sweepstakes or Contest in the US and Sales Promotions, Contests and Sweepstakes Checklist.
For more information on general advertising standards, see Practice Notes, Advertising: Overview and Advertising and Promotions in Social Media.