The Virginia General Assembly is currently the site of a heated debate over the future of the state’s fantasy sports industry. Two pieces of legislation, House Bill 145 and Senate Bill 129, collectively form the proposed Fantasy Contests Act, which would introduce some of the strictest financial and regulatory requirements in the United States.
A Major Shift in Taxation and Licensing
Currently, Virginia does not impose taxes on fantasy sports revenue, requiring only a $6,500 annual registration fee. The new act would replace this with a 10% monthly tax on the proceeds from Virginia-based fantasy competitions. Additionally, operators would be forced to pay a $50,000 application fee for a three-year permit, alongside a mandated $50,000 payment to the Problem Gambling Treatment and Support Fund.
Should the bill pass, renewal fees would sit at $25,000, creating a significant barrier to entry for smaller companies. Lawmakers argue these changes are necessary to close “regulatory gaps,” noting that many modern fantasy products now function similarly to legal sports betting systems.
Industry Pushback and Consumer Impact
Representatives from across the sector have warned that these changes could lead to a significant market contraction. Stakeholders argue that the high financial strain might force smaller competitors to exit Virginia entirely, limiting choices for consumers.
“The sector’s operational costs may be higher due to higher taxes. The additional restrictions might make it difficult for smaller companies to stay competitive,” industry stakeholders warned in a joint statement.
While the bill focuses on paid competitions, it explicitly excludes free fantasy leagues between friends. The discussion remains centered on striking a balance between protecting consumers through better funding for responsible gaming and maintaining a competitive market for authorized businesses.
