NFFC Exempting Virginia From Registration Page

[Greg Ambrosius]

This is something we first reported on our football site because it immediately impacted our football players, but our baseball customers should learn about this too. With the NFBC Post-Season Contest available for signups in the next week or two, Virginia residents should realize that they won't be eligible to play in that contest. And right now it looks unlikely that Virginia residents will be allowed to play in the NFBC in 2017 unless the state drastically changes its stance.

Here's the facts from the story I wrote on the football site and feel free to contact me at [email protected] if you need more information. Also feel free to contact your state legislator and the Virginia Governor if you think they should alter the Fantasy Sports Act for season-long fantasy games. Thanks all.


It's a shame that on Independence Weekend we have to announce that an entire state of harmless fantasy football players are now being told they can't play for cash prizes. It seems contrary to the type of Independence our Forefathers faught against an overbearing government.

But that's what we're doing today. As of today, July 1st, the NFFC has been forced to exempt all Virginia state residents from playing in any of our contests. Any Virginia resident who signed up before July 1st is still eligible to compete and play for prizes, so no problem if you are already set for 2016. But we are exempting Virginia starting today.

On March 8th, Virginia became the first state to legalize Daily Fantasy Sports, declaring it a legal game of skill. The Fantasy Contests Act was signed that day by Governor Terry McAuliffe and it included a $50,000 licensing fee for any pay-to-play fantasy sports company. Season-long game operators were included in this DFS bill and the state made no attempts to differentiate between the two formats. For more on the history of this bill, see the ESPN.com story below:

http://espn.go.com/chalk/story/_/id/149 ... tasy-games

This bill was a huge win for Fanduel and DraftKings as it set the precedent that a state recognized DFS as a legal hobby. The catch was that someone pushed for all fantasy games to be included in the bill and legislators obviously didn't take the time to figure out how inclusive this new club would be. They may have thought they were punishing DFS companies with such a high licensing fee, but in fact all they've done is enable the biggest companies to have a duopoly on Virginia state fantasy players. For $50,000, Fanduel and DraftKings now control the entire Virginia fantasy sports market because no other company in the industry can afford to pay this huge fee. It's a bit of extortion on a government level and only the biggest can play in this game.

The reason for the short notice is because most of us in the industry thought we had time to apply for a license in Virginia and to work with the regulator there. Unfortunately, both the SBFSTA and the FSTA heard back from the regulator this week and there is absolutely no wiggle room there. The regulator at the Virginia Agriculture and Consumer Services Department (I kid you not) stated that the $50,000 licensing fee had to be in hand by July 1st and licenses could then be applied for after that. There was no grace period in Virginia as they were asking for payment first. As a result, I'm sure that every single season-long game operator will be exiting the state and I'd be surprised if more than 2 DFS companies remain there.

We remain hopeful that the other states that have included season-long into their DFS bills will be a little more flexible when we ask to work with them. After all, in the state of Virginia season-long pay-to-play fantasy games have been around for 30+ years and never once has the state interceded or forced companies to leave the state. While they are touting consumer protections, it sure looks like more of a money grab to me. And shame on everyone involved in passing this bill that they agreed to these outlandish terms that anyone could see would eliminate small businesses in the state. This is a law written for big business by big business lawmakers who don't even understand this business. Criminal.

We will honor what the Virginia lawmakers have passed, but we ask all Virginia residents to continue to talk to their legislators about this bill. At the very least, the regulator has a right to meet with small businesses and to carve out a way to continue working in Virginia, similar to what New York and other states are doing. We are all for consumer protections in our space -- don't get me wrong there, we support that -- but to create a law that basically pushes every small business out of the state for good makes no sense. Let's continue to put pressure on Virginia lawmakers and show them what an outlier they are on this subject with the hope that something gets changed for 2017. It probably won't happen, but let's see what we can do as an industry together.

Sorry about this Virginia residents, but there's nothing we can do. Virginia joins 5 other states that are exempt from the NFFC, but this is the first exempt state as part of DFS legislation. Not good for Virginia. Not good for our industry.

If you have any questions on this please contact me at [email protected]. Thanks all and good luck.

[TRAIN]

Greg - Just out of curiosty, how many Virginia residents participated in the NFBC and the NFFC in the past year?

Also, do you have a breakdown of how many NFBC and NFFC customers there are on a state by state basis in the past year?

[Greg Ambrosius]

Greg - Just out of curiosty, how many Virginia residents participated in the NFBC and the NFFC in the past year?

Also, do you have a breakdown of how many NFBC and NFFC customers there are on a state by state basis in the past year?

In the dozens, and more in the NFBC than the NFFC. We sure do have a state-by-state analysis and with all of these state taxes that seem to be coming we'll really need to have this accounting for tax purposes in the future.

Now a Virginia resident can be a co-manager in our contests, but the principle owner can not be from one of our six exempt states: Arizona, Washington, Virginia, Louisiana, Iowa or Montana. And there will likely be more exempt states in the nexst few years unless laws change. We are watching Indiana to see if anything changes there as they also have a $50,000 licensing fee in the law that goes into effect this August. Everyone should pay attention to these so-called DFS bills because some of them are sweeping season-long into their gambling laws even though UIEGA clearly stated that season-long fantasy games were not gambling.

[Fourslot40]

Some state DFS bills such as Massachusetts and Tennessee have monthly deposit limits. Are contest entry fees for season long considered deposits and/ or does this apply to season long?

[Greg Ambrosius]

Some state DFS bills such as Massachusetts and Tennessee have monthly deposit limits. Are contest entry fees for season long considered deposits and/ or does this apply to season long?

No idea. These are obviously written into law for DFS contests to prevent obsessive "playing." We don't have that with season-long, at least not to the extent of DFS where owners can own 800+ teams a night. But once these laws are in play and we meet with regulators we'll let you know what the limits are.

Don't worry, Big Government will control ourselves from ourselves. They know best how we should spend our discretionary income.

Oh, by the way they encourage the Powerball Lottery this weekend and penny slot machines!! Like that's better for us.

[Deadheadz]

We don't have that with season-long, at least not to the extent of DFS where owners can own 800+ teams a night.

Do you anticipate a possible cap on the number of season long entries per entrant?
Hopefully it's higher than 68 or I know one manager who will be pissed.


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[Fourslot40]

Oh, by the way they encourage the Powerball Lottery this weekend and penny slot machines!! Like that's better for us.

No deposit limits for that