Virginia considers centralised regulator

Garance Limouzy August 27, 2024

SiGMA news

Virginia considers centralised regulator

In Virginia, USA, legislators are evaluating the creation of a unified state agency regulator to oversee the rapidly expanding gaming industry. This proposal, which will be considered in the upcoming 2025 legislative session, seeks to consolidate the responsibilities currently spread across multiple state agencies into a single independent authority, tentatively named the Virginia Gaming Commission.

Current oversight fragmentation

Virginia’s gaming industry, once limited to the state lottery and pari-mutuel betting, has seen an exponential expansion since the legalisation of online sports betting and the development of commercial casinos in 2020. However, regulatory oversight is currently divided among several state bodies, leading to concerns about the effectiveness and efficiency of the current system.

The Virginia Lottery, established in 1987, regulates traditional lottery sales, sports betting, and casino gaming. Meanwhile, the Virginia Racing Commission oversees live horse racing and historical horse racing machines, and the Virginia Department of Agriculture and Consumer Services (VDACS) manages charitable gaming and fantasy sports. Additionally, the Virginia Alcoholic Beverage Control Authority previously regulated skill-game devices under an expired registration system.

Lawmaker Paul Krizek, a Democrat and member of the Joint Subcommittee to Study the Feasibility of Establishing the Virginia Gaming Commission describes the current regulatory structure as “inadequate” for addressing emerging gaming trends and associated issues.

A centralised regulator

In response to these concerns, a bipartisan group of lawmakers has proposed consolidating most gaming regulatory responsibilities under the new Virginia Gaming Commission, an independent authority rather than a state agency. This new body would regulate retail and online sports betting, charitable gaming, live horse racing, historical horse racing, fantasy sports, the state’s five licensed casinos, and ten licensed off-track betting outlets like Rosie’s Gaming Emporium.

The Virginia Lotter would remain a separate entity, continuing to oversee its traditional responsibilities. However, some lawmakers are already talking about the possibility of bringing the Virginia Lottery under its purview.

The proposed Virginia Gaming Commission is envisioned as a “one-stop regulatory home” capable of quickly adapting to new gaming types and ensuring comprehensive oversight. Among the key recommendations is the creation of a problem gambling division within the commission, which would coordinate with local, state, and national stakeholders to manage prevention, recovery, and treatment efforts. Another significant suggestion includes establishing an external affairs and policy division to advise lawmakers on gaming-related decisions and communicate with relevant stakeholders.

Next steps

The new commission would likely take two years to become fully operational, with a tentative start date of July 1, 2025, when wagers are expected to reach $21 billion. During this period, the Virginia General Assembly will need to pass the necessary legislation to formalise the commission’s creation and outline its regulatory powers.