Virginia Lawmakers Propose New Regulations and Taxes for Fantasy Sports in 2026
Virginia Legislators Introduce Tax and Regulatory Changes for Fantasy Sports
Virginia’s lawmakers are moving to implement new regulations affecting daily fantasy sports companies operating within the state. Delegate Paul Krizek has put forward House Bill 145, which recently passed an initial review by a House subcommittee unanimously sending it to the Appropriations Committee for further consideration.
Key Provisions of the Proposed Bill
The legislation seeks to update the existing Fantasy Contests Act by introducing a tax framework and enhanced oversight measures. Under the proposed changes, fantasy sports operators would be required to pay a 10% tax on their revenue generated from contests in Virginia. The majority of these funds—95%—would be allocated to the state’s general fund, while the remaining 5% would support initiatives aimed at preventing and treating gambling addiction.
Additionally, the bill mandates that fantasy sports companies obtain a state-issued permit to conduct contests, valid for three years. The permit application and renewal fees are intended to finance regulatory activities and contribute to gambling addiction support programs.
Stronger Consumer Protections and Operational Standards
House Bill 145 outlines various safeguards to protect participants. Companies would have to verify that all players are at least 21 years old, keep player funds separated from business accounts, and maintain sufficient liquidity to cover prize payouts. Other safeguards include allowing players to self-exclude from contests, limiting insider access to confidential information, and prohibiting employees and their associates from participating in public games.
Ongoing Compliance and Enforcement
The bill requires annual audits by independent experts to ensure companies are adhering to both financial and operational regulations. Regulatory authorities would have increased powers to impose fines, revoke permits, or suspend licenses when violations occur.
Clarifying the Definition of Fantasy Contests
HB 145 refines what constitutes a fantasy contest by specifying that competitions must involve skill and statistics from multiple athletes. This change excludes “pick ’em” style games or those resembling traditional sports betting, a practice that has raised concern among regulators nationwide.
Context and Nationwide Trends
Virginia was a pioneer in legalizing daily fantasy sports back in 2016, initially setting a flat licensing fee without taxing operator revenue. The current bill reflects the state’s desire to align fantasy sports with other regulated gaming sectors.
Across the U.S., states are increasingly considering stricter rules for fantasy sports. While Illinois and Florida are contemplating new controls, others like California and Arizona have already imposed tighter restrictions on certain fantasy sports offerings.
Implications and Future Outlook
Supporters of HB 145 argue that these reforms would generate significant additional revenue for public use, improve player safety, and provide clearer regulations for both operators and participants. The bill’s progression indicates heightened regulatory focus on fantasy sports as the industry evolves to closely resemble sports betting.
If the legislature passes the bill and it receives the governor’s approval, the new regulations could take effect in Virginia starting in 2026, signaling a major shift in the state’s approach to fantasy sports.
