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A select group of bipartisan lawmakers will introduce a measure in next year’s legislative session that would take Virginia’s multiple state agencies that regulate gaming and consolidate most of them into a single independent authority.
“Through no fault of their own, there are so many different agencies; three agencies that are currently responsible for gaming in Virginia,” said Delegate Paul Krizek, a Democrat and member of the Joint Subcommittee to Study the Feasibility of Establishing the Virginia Gaming Commission.
Krizek said the state’s structure for regulating gaming was “inadequate when it comes to addressing new gaming and the issues that may be coming down the pike”.
The Virginia gaming market has experienced a major expansion following the enactment of legislation in 2020, which authorized online sports wagering and commercial casinos.
The Virginia Lottery currently operates retail and internet lottery sales, as well as overseeing sports betting and casino gaming.
But the Virginia Racing Commission regulates live horseracing, historic horseracing machines, and advanced-deposit wagering (ADW), while the Virginia Department of Agriculture and Consumer Services regulates fantasy sports plus all forms of charitable gaming, including electronic pull-tabs.
The Virginia Alcoholic Beverage Control Authority formerly regulated skill-game devices under a now expired registration system applied to the machines.
“There really is a lack right now of a comprehensive regulatory oversight process, which really represents risks for the consumer and the Commonwealth and for the legal gaming market,” Krizek said. “So, we need to address that and that is what we have been doing.”
The idea of giving a single state agency the power to regulate most forms of gambling was first proposed in a 2022 report by Virginia's Joint Legislative Audit and Review Commission (JLARC).
The report recommended that the Virginia Lottery become the primary regulator, noting the agency has already increased its staff to oversee sports betting and casinos.
House Joint Resolution 10, filed by Krizek, was approved earlier this year by the Virginia General Assembly, which continued the mandate of the joint subcommittee to continue studying the potential creation of a Virginia Gaming Commission to consolidate regulatory oversight under just one agency.
Initially, Krizek recommended the commission be a state agency, but a new report has recommended that the Virginia Gaming Commission be an independent authority.
Under a two-year plan recommended by Guidehouse, a Virginia-based consulting firm, the state would create a gaming commission to regulate retail and online sports betting, charitable gaming, live horseracing, historical horseracing (HHR), new gaming types, simulcast racing, advanced deposit wagering (ADW), fantasy sports contests, the state’s five licensed casinos and ten licensed Rosie’s Gaming Emporium off-track betting outlets.
The Virginia Lottery, which was created in 1987, would remain a separate entity and continue to oversee the retail and online sale of lottery tickets in the state.
“This continues to be a growing field,” Colin Hood, a director at Guidehouse, told the joint subcommittee during a hearing last week. “There is no perfect model; it’s about trying to strike a balance.”
Hood stressed that the operating model for the Virginia Gaming Commission should be as an “efficient, cost-effective and strong regulator”. He added that the idea was to create a structure that can regulate diverse gaming types.
“It is really important that we build an organization that is sustainable for new gaming types and can help the Commonwealth make decisions on new gaming types and quickly regulate them as desired by the General Assembly,” Hood told lawmakers during his presentation.
Guidehouse offered 13 recommendations for creating the Virginia Gaming Commission, including establishing a problem gambling division within the commission that could coordinate with local, state and national stakeholders to manage prevention, recovery and treatment efforts.
Other recommendations include creating an external affairs and policy division within the commission to recommend gaming policy decisions to legislators and communicate with stakeholders within the state, including the beneficiaries of revenue derived from each type of gaming.
Hood said the new commission would be a “one-stop regulatory home”, although it would take up to two years to establish.
“There are a lot of important conversations to be had over the coming months to enable us to start the process on July 1, 2025,” Hood said. noting that “the Virginia General Assembly would need to pass legislation during the upcoming session. That’s the starting point of the process”.
The option recommended by Guidehouse, whose 36-page plan included four options, garnered overwhelming support form subcommittee members last week.
As for the next step, Republican state Senator Bryce Reeves explained that Guidehouse consultants will deliver the final report for the joint subcommittee to vote on at its next meeting in November.
“Lawmakers would then begin to develop the legislative framework to change the code for the consolidation,” said Reeves, who chairs the joint subcommittee. The Virginia General Assembly convenes on January 8, 2025.
After the launch of the Virginia Gaming Commission, lawmakers could later consider putting the Virginia Lottery under the same roof, according to Hood.
