                                 CODE OF VIRGINIA

APPLICATION FOR A SPORTS BETTING PERMIT; PENALTY (§ 58.1-4032)

A. An applicant for a sports betting permit shall:

   1. Submit an application to the Director, on forms prescribed by the Director,
   containing the information prescribed in subsection B; and

   2. Pay to the Department a nonrefundable fee of $50,000 for each principal at
   the time of filing to defray the costs associated with the background
   investigations conducted by the Department. If the reasonable costs of the
   investigation exceed the application fee, the applicant shall pay the
   additional amount to the Department. The Board may establish regulations
   calculating the reasonable costs to the Department in performing its functions
   under this article and allocating such costs to the applicants for licensure
   at the time of filing. The fees for each principal and any additional
   investigation costs paid to the Department shall be deposited into the Gaming
   Regulatory Fund established pursuant to &#xA7; 58.1-4048.

B. An application for a sports betting permit shall include the following
information:

   1. The applicant&#8217;s background in sports betting;

   2. The applicant&#8217;s experience in wagering activities in other
   jurisdictions, including the applicant&#8217;s history and reputation of
   integrity and compliance;

   3. The applicant&#8217;s proposed internal controls, including controls to
   ensure that no prohibited or voluntarily excluded person will be able to
   participate in sports betting;

   4. The applicant&#8217;s history of working to prevent compulsive gambling,
   including training programs for its employees;

   5. If applicable, any supporting documentation necessary to establish
   eligibility for substantial and preferred consideration pursuant to the
   provisions of this section;

   6. The applicant&#8217;s proposed procedures to detect and report suspicious
   or illegal betting activity; and

   7. Any other information the Director deems necessary.

C. The Department shall conduct a background investigation on the applicant. The
background investigation shall include a credit history check, a tax record
check, and a criminal history records check.

D. 1. The Director shall not issue any permit pursuant to this article until the
Board has established a consumer protection program and published a consumer
protection bill of rights pursuant to the provisions of subdivision A 14 of §
58.1-4007.

   2. The Director shall issue no fewer than four and no more than 12 permits
   pursuant to this section; however, if an insufficient number of applicants
   apply for the Director to satisfy the minimum, this provision shall not be
   interpreted to direct the Director to issue a permit to an unqualified
   applicant. A permit shall not count toward the minimum or maximum if it (i) is
   issued pursuant to subdivision 4 or 5 to a major league sports franchise or to
   the operator of a facility; (ii) is issued pursuant to subdivision 6 to an
   applicant that operates or intends to operate a casino gaming establishment;
   or (iii) is revoked, expires, or otherwise becomes not effective.

   3. In issuing permits to operate sports betting platforms and sports betting
   facilities, the Director shall consider the following factors:
   				a. The contents of the applicant&#8217;s application as required by
   subsection B;
   				b. The extent to which the applicant demonstrates past experience,
   financial viability, compliance with applicable laws and regulations, and
   success with sports betting operations in other states;
   				c. The extent to which the applicant will be able to meet the duties of a
   permit holder, as specified in &#xA7; 58.1-4034;
   				d. Whether the applicant has demonstrated to the Department that it has
   made serious, good-faith efforts to solicit and interview a reasonable number
   of investors that are minority individuals, as defined in &#xA7; 2.2-1604;
   				e. The amount of adjusted gross revenue and associated tax revenue that an
   applicant is expected to generate;
   				f. The effect of issuing an additional permit on the amount of gross
   revenue and associated tax revenue generated by all existing permit holders,
   considered in the aggregate; and
   				g. Any other factor the Director considers relevant.

   4. In issuing permits to operate sports betting platforms prior to July 1,
   2025, the Director shall give substantial and preferred consideration to any
   applicant that is a major league sports franchise headquartered in the
   Commonwealth that remitted personal state income tax withholdings based on
   taxable wages in the Commonwealth in excess of $200 million for the 2019
   taxable year. Any permit holder granted a permit pursuant to this subdivision
   shall receive substantial and preferred consideration of its first, second,
   and third applications for renewal pursuant to the provisions of &#xA7;
   58.1-4033; however, such permit holder shall not receive substantial and
   preferred consideration of its fourth and subsequent applications for renewal.
   Any permit granted pursuant to this subdivision shall expire if the permit
   holder ceases to maintain its headquarters in the Commonwealth.

   5. In issuing permits to operate sports betting platforms prior to July 1,
   2025, the Director shall give substantial and preferred consideration to any
   applicant that is a major league sports franchise that plays five or more
   regular season games per year at a facility in the Commonwealth or that is the
   operator of a facility in the Commonwealth where a major league sports
   franchise plays five or more regular season games per year; however, the
   Director shall give such substantial and preferred consideration only if the
   applicant (i) is headquartered in the Commonwealth, (ii) has an annualized
   payroll for taxable wages in the Commonwealth that is in excess of $10 million
   over the 90-day period prior to the application date, and (iii) the total
   number of individuals working at the facility in the Commonwealth where the
   major league sports franchise plays five or more regular season games is in
   excess of 100.

   6. If casino gaming is authorized under the laws of the Commonwealth, then in
   issuing permits to operate sports betting platforms and sports betting
   facilities, the Director shall give substantial and preferred consideration to
   any applicant that (i) has made or intends to make a capital investment of at
   least $300 million in a casino gaming establishment, including the value of
   the real property upon which such establishment is located and all
   furnishings, fixtures, and other improvements; (ii) has had its name submitted
   as a preferred casino gaming operator to the Department by an eligible host
   city; and (iii) has been certified by the Department to proceed to a local
   referendum on whether casino gaming will be allowed in the locality in which
   the applicant intends to operate a casino gaming establishment.

   7. In issuing permits to operate sports betting platforms prior to July 1,
   2025, the Director shall give substantial and preferred consideration to any
   applicant that demonstrates in its application (i) a description of any equity
   interest owned by minority individuals or minority-owned businesses, (ii) a
   detailed plan to achieve increased minority equity investment, (iii) a
   description of all efforts made to seek equity investment from minority
   individuals or minority-owned businesses, or (iv) a plan detailing efforts
   made to solicit participation of minority individuals or minority-owned
   businesses in the applicant&#8217;s purchase of goods and services related to
   the sports betting platform or to provide assistance to a historically
   disadvantaged community or historically black colleges and universities
   located within the Commonwealth. As used in this subdivision,
   &#8220;historically black colleges and universities,&#8221; &#8220;minority
   individual,&#8221; and &#8220;minority-owned business&#8221; mean the same as
   those terms are defined in &#xA7; 2.2-1604.

   8. In a manner as may be required by Board regulation, any entity that applies
   pursuant to subdivision 4, 5, 6, or 7 may demonstrate compliance with the
   requirements of an application, the duties of a permit holder, and any other
   provision of this article through the use of a partner, subcontractor, or
   other affiliate of the applicant.

E. The Director shall make a determination on an initial application for a
sports betting permit within 90 days of receipt. The Director&#8217;s action
shall be final unless appealed in accordance with &#xA7; 58.1-4007.

F. The following shall be grounds for denial of a permit or renewal of a permit:

   1. The Director reasonably believes the applicant will be unable to satisfy
   the duties of a permit holder as described in subsection A of &#xA7;
   58.1-4034;

   2. The Director reasonably believes that the applicant or its directors lack
   good character, honesty, or integrity;

   3. The Director reasonably believes that the applicant&#8217;s prior
   activities, criminal record, reputation, or associations are likely to (i)
   pose a threat to the public interest, (ii) impede the regulation of sports
   betting, or (iii) promote unfair or illegal activities in the conduct of
   sports betting;

   4. The applicant or its directors knowingly make a false statement of material
   fact or deliberately fail to disclose information requested by the Director;

   5. The applicant or its directors knowingly fail to comply with the provisions
   of this article or any requirements of the Director;

   6. The applicant or its directors were convicted of a felony, a crime of moral
   turpitude, or any criminal offense involving dishonesty or breach of trust
   within the 10 years prior to the submission date of the permit application;

   7. The applicant&#8217;s license, registration, or permit to conduct a sports
   betting operation issued by any other jurisdiction has been suspended or
   revoked;

   8. The applicant defaults in payment of any obligation or debt due to the
   Commonwealth; or

   9. The applicant&#8217;s application is incomplete.

G. The Director shall have the discretion to waive any of the grounds for denial
of a permit or renewal of a permit if he determines that denial would limit the
number of applicants or permit holders in a manner contrary to the best
interests of the Commonwealth.

H. Prior to issuance of a permit, each permit holder shall either (i) be bonded
by a surety company entitled to do business in the Commonwealth in such amount
and penalty as may be prescribed by the regulations of the Board or (ii) provide
other surety, letter of credit, or reserve as may be satisfactory to the
Director. Such surety shall be prescribed by Board regulations and shall not
exceed a reasonable amount.

I. Any person who knowingly and willfully falsifies, conceals, or misrepresents
a material fact or knowingly and willfully makes a false, fictitious, or
fraudulent statement or representation in any application pursuant to this
article is guilty of a Class 1 misdemeanor.

J. In addition to the fee required pursuant to subdivision A 2, any applicant to
which the Department issues a permit shall pay a nonrefundable fee of $250,000
to the Department prior to the issuance of such permit. Such fees shall be
deposited by the Department into the Gaming Regulatory Fund established pursuant
to &#xA7; 58.1-4048.

HISTORY: 2020, cc. 1218, 1256; 2021, Sp. Sess. I, cc. 351, 352; 2023, cc. 586,
587.