2026 SESSION
INTRODUCED
26100034D
HOUSE BILL NO. 145
Offered January 14, 2026
Prefiled January 5, 2026
A BILL to amend and reenact §§ 2.2-3705.3, as it is currently effective and as it shall become effective, 37.2-314.2, 59.1-556 through 59.1-559, 59.1-561, 59.1-562, 59.1-563, 59.1-565, 59.1-566, and 59.1-567 of the Code of Virginia, to amend the Code of Virginia by adding in Chapter 3 of Title 11 a section numbered 11-16.3 and by adding a section numbered 59.1-563.1, and to repeal § 59.1-564 of the Code of Virginia, relating to Fantasy Contests Act; regulation and taxation.
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Patron—Krizek
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Referred to Committee on General Laws
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Be it enacted by the General Assembly of Virginia:
1. That §§ 2.2-3705.3, as it is currently effective and as it shall become effective, 37.2-314.2, 59.1-556 through 59.1-559, 59.1-561, 59.1-562, 59.1-563, 59.1-565, 59.1-566, and 59.1-567 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding in Chapter 3 of Title 11 a section numbered 11-16.3 and by adding a section numbered 59.1-563.1 as follows:
§ 2.2-3705.3. (Effective until July 1, 2026) Exclusions to application of chapter; records relating to administrative investigations.
The following information contained in a public record is excluded from the mandatory disclosure provisions of this chapter but may be disclosed by the custodian in his discretion, except where such disclosure is prohibited by law. Redaction of information excluded under this section from a public record shall be conducted in accordance with § 2.2-3704.01.
1. Information relating to investigations of applicants for licenses and permits, and of all licensees and permittees, made by or submitted to the Virginia Alcoholic Beverage Control Authority, the Virginia Cannabis Control Authority, the Virginia Lottery pursuant to Chapter 40 (§ 58.1-4000 et seq.) and Chapter 41 (§ 58.1-4100 et seq.) of Title 58.1, the Virginia Racing Commission, the Department of Agriculture and Consumer Services relating to investigations and applications pursuant to Article 1.1:1 (§ 18.2-340.15 et seq.) of Chapter 8 of Title 18.2 and the Fantasy Contests Act (§ 59.1-556 et seq.), or the Private Security Services Unit of the Department of Criminal Justice Services.
2. Records of active investigations being conducted by the Virginia Cannabis Control Authority or by the Department of Health Professions or any health regulatory board in the Commonwealth pursuant to § 54.1-108.
3. Investigator notes, and other correspondence and information, furnished in confidence with respect to an active investigation of individual employment discrimination complaints made to the Department of Human Resource Management, to such personnel of any local public body, including local school boards, as are responsible for conducting such investigations in confidence, or to any public institution of higher education. However, nothing in this subdivision shall prevent the disclosure of information taken from inactive reports in a form that does not reveal the identity of charging parties, persons supplying the information, or other individuals involved in the investigation.
4. Records of active investigations being conducted by the Department of Medical Assistance Services pursuant to Chapter 10 (§ 32.1-323 et seq.) of Title 32.1.
5. Investigative notes and other correspondence and information furnished in confidence with respect to an investigation or conciliation process involving an alleged unlawful discriminatory practice under the Virginia Human Rights Act (§ 2.2-3900 et seq.) or under any local ordinance adopted in accordance with the authority specified in § 2.2-524, or adopted pursuant to § 15.2-965, or adopted prior to July 1, 1987, in accordance with applicable law, relating to local human rights or human relations commissions. However, nothing in this subdivision shall prevent the distribution of information taken from inactive reports in a form that does not reveal the identity of the parties involved or other persons supplying information.
6. Information relating to studies and investigations by the Virginia Lottery of (i) lottery agents, (ii) lottery vendors, (iii) lottery crimes under §§ 58.1-4014 through 58.1-4018, (iv) defects in the law or regulations that cause abuses in the administration and operation of the lottery and any evasions of such provisions, or (v) the use of the lottery as a subterfuge for organized crime and illegal gambling where such information has not been publicly released, published or copyrighted. All studies and investigations referred to under clauses (iii), (iv), and (v) shall be open to inspection and copying upon completion of the study or investigation.
7. Investigative notes, correspondence and information furnished in confidence, and records otherwise exempted by this chapter or any Virginia statute, provided to or produced by or for (i) the Auditor of Public Accounts; (ii) the Joint Legislative Audit and Review Commission; (iii) an appropriate authority as defined in § 2.2-3010 with respect to an allegation of wrongdoing or abuse under the Fraud and Abuse Whistle Blower Protection Act (§ 2.2-3009 et seq.); (iv) the Office of the State Inspector General with respect to an investigation initiated through the Fraud, Waste and Abuse Hotline or an investigation initiated pursuant to Chapter 3.2 (§ 2.2-307 et seq.); (v) internal auditors appointed by the head of a state agency or by any public institution of higher education; (vi) the committee or the auditor with respect to an investigation or audit conducted pursuant to § 15.2-825; (vii) the auditors, appointed by the local governing body of any county, city, or town or a school board, who by charter, ordinance, or statute have responsibility for conducting an investigation of any officer, department, or program of such body; or (viii) the Behavioral Health Commission. Information contained in completed investigations shall be disclosed in a form that does not reveal the identity of the complainants or persons supplying information to investigators. Unless disclosure is excluded by this subdivision, the information disclosed shall include the agency involved, the identity of the person who is the subject of the complaint, the nature of the complaint, and the actions taken to resolve the complaint. If an investigation does not lead to corrective action, the identity of the person who is the subject of the complaint may be released only with the consent of the subject person. Local governing bodies shall adopt guidelines to govern the disclosure required by this subdivision.
8. The names and personal contact information of complainants furnished in confidence with respect to an investigation of individual zoning enforcement complaints or complaints relating to the Uniform Statewide Building Code (§ 36-97 et seq.) or the Statewide Fire Prevention Code (§ 27-94 et seq.) made to a local governing body. As used in this subdivision, "personal contact information" includes the complainant's home or business (i) address, (ii) email address, or (iii) telephone number or comparable number assigned to any other electronic communication device.
9. Records of active investigations being conducted by the Department of Criminal Justice Services pursuant to Article 4 (§ 9.1-138 et seq.), Article 4.1 (§ 9.1-150.1 et seq.), Article 11 (§ 9.1-185 et seq.), and Article 12 (§ 9.1-186 et seq.) of Chapter 1 of Title 9.1.
10. Information furnished to or prepared by the Board of Education pursuant to subsection D of § 22.1-253.13:3 in connection with the review or investigation of any alleged breach in security, unauthorized alteration, or improper administration of tests by local school board employees responsible for the distribution or administration of the tests. However, this section shall not prohibit the disclosure of such information to (i) a local school board or division superintendent for the purpose of permitting such board or superintendent to consider or to take personnel action with regard to an employee or (ii) any requester, after the conclusion of a review or investigation, in a form that (a) does not reveal the identity of any person making a complaint or supplying information to the Board on a confidential basis and (b) does not compromise the security of any test mandated by the Board.
11. Information contained in (i) an application for licensure or renewal of a license for teachers and other school personnel, including transcripts or other documents submitted in support of an application, and (ii) an active investigation conducted by or for the Board of Education related to the denial, suspension, cancellation, revocation, or reinstatement of teacher and other school personnel licenses including investigator notes and other correspondence and information, furnished in confidence with respect to such investigation. However, this subdivision shall not prohibit the disclosure of such (a) application information to the applicant at his own expense or (b) investigation information to a local school board or division superintendent for the purpose of permitting such board or superintendent to consider or to take personnel action with regard to an employee. Information contained in completed investigations shall be disclosed in a form that does not reveal the identity of any complainant or person supplying information to investigators. The completed investigation information disclosed shall include information regarding the school or facility involved, the identity of the person who was the subject of the complaint, the nature of the complaint, and the actions taken to resolve the complaint. If an investigation fails to support a complaint or does not lead to corrective action, the identity of the person who was the subject of the complaint may be released only with the consent of the subject person. No personally identifiable information regarding a current or former student shall be released except as permitted by state or federal law.
12. Information provided in confidence and related to an investigation by the Attorney General under Article 1 (§ 3.2-4200 et seq.) or Article 3 (§ 3.2-4204 et seq.) of Chapter 42 of Title 3.2, Article 10 (§ 18.2-246.6 et seq.) of Chapter 6 or Chapter 13 (§ 18.2-512 et seq.) of Title 18.2, or Article 1 (§ 58.1-1000) of Chapter 10 of Title 58.1. However, information related to an investigation that has been inactive for more than six months shall, upon request, be disclosed provided such disclosure is not otherwise prohibited by law and does not reveal the identity of charging parties, complainants, persons supplying information, witnesses, or other individuals involved in the investigation.
13. Records of active investigations being conducted by the Department of Behavioral Health and Developmental Services pursuant to Chapter 4 (§ 37.2-400 et seq.) of Title 37.2.
§ 2.2-3705.3. (Effective July 1, 2026) Exclusions to application of chapter; records relating to administrative investigations.
The following information contained in a public record is excluded from the mandatory disclosure provisions of this chapter but may be disclosed by the custodian in his discretion, except where such disclosure is prohibited by law. Redaction of information excluded under this section from a public record shall be conducted in accordance with § 2.2-3704.01.
1. Information relating to investigations of applicants for licenses and permits, and of all licensees and permittees, made by or submitted to the Virginia Alcoholic Beverage Control Authority, the Virginia Cannabis Control Authority, the Virginia Lottery pursuant to Chapter 40 (§ 58.1-4000 et seq.) and Chapter 41 (§ 58.1-4100 et seq.) of Title 58.1, the Virginia Racing Commission, the Department of Agriculture and Consumer Services relating to investigations and applications pursuant to Article 1.1:1 (§ 18.2-340.15 et seq.) of Chapter 8 of Title 18.2 and the Fantasy Contests Act (§ 59.1-556 et seq.), or the Private Security Services Unit of the Department of Criminal Justice Services.
2. Records of active investigations being conducted by the Virginia Cannabis Control Authority or by the Department of Health Professions or any health regulatory board in the Commonwealth pursuant to § 54.1-108.
3. Investigator notes, and other correspondence and information, furnished in confidence with respect to an active investigation of individual employment discrimination complaints made to the Department of Human Resource Management, to such personnel of any local public body, including local school boards, as are responsible for conducting such investigations in confidence, or to any public institution of higher education. However, nothing in this subdivision shall prevent the disclosure of information taken from inactive reports in a form that does not reveal the identity of charging parties, persons supplying the information, or other individuals involved in the investigation.
4. Records of active investigations being conducted by the Department of Medical Assistance Services pursuant to Chapter 10 (§ 32.1-323 et seq.) of Title 32.1.
5. Investigative notes and other correspondence and information furnished in confidence with respect to an investigation or conciliation process involving an alleged unlawful discriminatory practice under the Virginia Human Rights Act (§ 2.2-3900 et seq.) or under any local ordinance adopted in accordance with the authority specified in § 2.2-524, or adopted pursuant to § 15.2-965, or adopted prior to July 1, 1987, in accordance with applicable law, relating to local human rights or human relations commissions. However, nothing in this subdivision shall prevent the distribution of information taken from inactive reports in a form that does not reveal the identity of the parties involved or other persons supplying information.
6. Information relating to studies and investigations by the Virginia Lottery of (i) lottery agents, (ii) lottery vendors, (iii) lottery crimes under §§ 58.1-4014 through 58.1-4018, (iv) defects in the law or regulations that cause abuses in the administration and operation of the lottery and any evasions of such provisions, or (v) the use of the lottery as a subterfuge for organized crime and illegal gambling where such information has not been publicly released, published or copyrighted. All studies and investigations referred to under clauses (iii), (iv), and (v) shall be open to inspection and copying upon completion of the study or investigation.
7. Investigative notes, correspondence and information furnished in confidence, and records otherwise exempted by this chapter or any Virginia statute, provided to or produced by or for (i) the Auditor of Public Accounts; (ii) the Joint Legislative Audit and Review Commission; (iii) an appropriate authority as defined in § 2.2-3010 with respect to an allegation of wrongdoing or abuse under the Fraud and Abuse Whistle Blower Protection Act (§ 2.2-3009 et seq.); (iv) the Office of the State Inspector General with respect to an investigation initiated through the Fraud, Waste and Abuse Hotline or an investigation initiated pursuant to Chapter 3.2 (§ 2.2-307 et seq.); (v) internal auditors appointed by the head of a state agency or by any public institution of higher education; (vi) the committee or the auditor with respect to an investigation or audit conducted pursuant to § 15.2-825; (vii) the auditors, appointed by the local governing body of any county, city, or town or a school board, who by charter, ordinance, or statute have responsibility for conducting an investigation of any officer, department, or program of such body; or (viii) the Behavioral Health Commission. Information contained in completed investigations shall be disclosed in a form that does not reveal the identity of the complainants or persons supplying information to investigators. Unless disclosure is excluded by this subdivision, the information disclosed shall include the agency involved, the identity of the person who is the subject of the complaint, the nature of the complaint, and the actions taken to resolve the complaint. If an investigation does not lead to corrective action, the identity of the person who is the subject of the complaint may be released only with the consent of the subject person. Local governing bodies shall adopt guidelines to govern the disclosure required by this subdivision.
8. The names and personal contact information of complainants furnished in confidence with respect to an investigation of individual zoning enforcement complaints or complaints relating to the Uniform Statewide Building Code (§ 36-97 et seq.) or the Statewide Fire Prevention Code (§ 27-94 et seq.) made to a local governing body. As used in this subdivision, "personal contact information" includes the complainant's home or business (i) address, (ii) email address, or (iii) telephone number or comparable number assigned to any other electronic communication device.
9. Records of active investigations being conducted by the Department of Criminal Justice Services pursuant to Article 4 (§ 9.1-138 et seq.), Article 4.1 (§ 9.1-150.1 et seq.), Article 11 (§ 9.1-185 et seq.), and Article 12 (§ 9.1-186 et seq.) of Chapter 1 of Title 9.1.
10. Information furnished to or prepared by the Board of Education pursuant to subsection F of § 22.1-253.13:3 in connection with the review or investigation of any alleged breach in security, unauthorized alteration, or improper administration of tests by local school board employees responsible for the distribution or administration of the tests. However, this section shall not prohibit the disclosure of such information to (i) a local school board or division superintendent for the purpose of permitting such board or superintendent to consider or to take personnel action with regard to an employee or (ii) any requester, after the conclusion of a review or investigation, in a form that (a) does not reveal the identity of any person making a complaint or supplying information to the Board on a confidential basis and (b) does not compromise the security of any test mandated by the Board.
11. Information contained in (i) an application for licensure or renewal of a license for teachers and other school personnel, including transcripts or other documents submitted in support of an application, and (ii) an active investigation conducted by or for the Board of Education related to the denial, suspension, cancellation, revocation, or reinstatement of teacher and other school personnel licenses including investigator notes and other correspondence and information, furnished in confidence with respect to such investigation. However, this subdivision shall not prohibit the disclosure of such (a) application information to the applicant at his own expense or (b) investigation information to a local school board or division superintendent for the purpose of permitting such board or superintendent to consider or to take personnel action with regard to an employee. Information contained in completed investigations shall be disclosed in a form that does not reveal the identity of any complainant or person supplying information to investigators. The completed investigation information disclosed shall include information regarding the school or facility involved, the identity of the person who was the subject of the complaint, the nature of the complaint, and the actions taken to resolve the complaint. If an investigation fails to support a complaint or does not lead to corrective action, the identity of the person who was the subject of the complaint may be released only with the consent of the subject person. No personally identifiable information regarding a current or former student shall be released except as permitted by state or federal law.
12. Information provided in confidence and related to an investigation by the Attorney General under Article 1 (§ 3.2-4200 et seq.) or Article 3 (§ 3.2-4204 et seq.) of Chapter 42 of Title 3.2, Article 10 (§ 18.2-246.6 et seq.) of Chapter 6 or Chapter 13 (§ 18.2-512 et seq.) of Title 18.2, or Article 1 (§ 58.1-1000) of Chapter 10 of Title 58.1. However, information related to an investigation that has been inactive for more than six months shall, upon request, be disclosed provided such disclosure is not otherwise prohibited by law and does not reveal the identity of charging parties, complainants, persons supplying information, witnesses, or other individuals involved in the investigation.
13. Records of active investigations being conducted by the Department of Behavioral Health and Developmental Services pursuant to Chapter 4 (§ 37.2-400 et seq.) of Title 37.2.
§ 11-16.3. Exemption; authorized fantasy contests.
This chapter shall not apply to any fantasy contests or related activity that is lawful under the Fantasy Contests Act (§ 59.1-556 et seq.).
§ 37.2-314.2. Problem Gambling Treatment and Support Fund.
A. As used in this section:
"Compulsive gambling" means persistent and recurrent problem gambling behavior leading to clinically significant impairment or distress, as indicated by an individual exhibiting four or more of the criteria as defined by the Diagnostic Statistical Manual of Mental Disorders in a 12-month period and where the behavior is not better explained by a manic episode.
"Problem gambling" means a gambling behavior that causes disruptions in any major area of life, including the psychological, social, or vocational areas of life, but does not fulfill the criteria for diagnosis as a gambling disorder.
B. There is hereby created in the state treasury a special nonreverting fund to be known as the Problem Gambling Treatment and Support Fund, referred to in this section as "the Fund." The Fund shall be established on the books of the Comptroller. All revenue accruing to the Fund pursuant to subsection A of § 58.1-4038 and moneys required to be deposited into the Fund pursuant to Chapter 41 (§ 58.1-4100 et seq.) of Title 58.1, subsection H of § 59.1-557, and § 59.1-563.1 shall be paid into the state treasury and credited to the Fund. Interest earned on moneys in the Fund shall remain in the Fund and be credited to it. Any moneys remaining in the Fund, including interest thereon, at the end of each fiscal year shall not revert to the general fund but shall remain in the Fund. Moneys in the Fund shall be used solely for the purposes of (i) providing counseling and other support services for compulsive and problem gamblers, (ii) developing and implementing compulsive and problem gambling treatment and prevention programs, and (iii) providing grants to support organizations that provide assistance to compulsive and problem gamblers. Expenditures and disbursements from the Fund shall be made by the State Treasurer on warrants issued by the Comptroller upon written request signed by the Commissioner.
§ 59.1-556. Definitions.
As used in this chapter, unless the context requires otherwise:
"Confidential information" means information related to the play of a fantasy contest by fantasy contest players obtained as a result of or by virtue of a person's employment.
"Department" means the Department of Agriculture and Consumer Services.
"Entry fee" means cash or cash equivalent that is required to be paid by a fantasy contest participant player to a fantasy contest operator in order to participate compete in a fantasy contest.
"Fantasy contest" includes any online fantasy or simulated game or contest with an entry fee in which (i) two or more fantasy contest players compete against each other; (ii) the value of all prizes and awards offered to winning participants players is established and made known to the participants players in advance of the contest; (ii) (iii) all winning outcomes reflect the relative knowledge and skill of the participants players and shall be determined by accumulated statistical results of the performance of individuals, including athletes in the case of sports events; and (iii) (iv) no winning outcome is based on the score, point spread, or any performance of any single actual team or combination of teams or solely on any single performance of an individual athlete or player in any single actual event; and (v) no player competes against the fantasy contest operator.
"Fantasy contest operator" or "operator" means a person or entity that offers fantasy contests for a cash prize to members of the public to which the Department issues a fantasy contest permit pursuant to § 59.1-558.
"Fantasy contest permit" means a permit to operate fantasy contests issued pursuant to the provisions of this chapter.
"Fantasy contest player" or "player" means a person who participates competes in a fantasy contest offered by a fantasy contest operator. "Fantasy contest player" does not include a fantasy contest operator.
"Fantasy contest revenue" means the amount equal to the total of all entry fees that a fantasy contest operator collects from all fantasy contest players, less the total of all sums paid out to all fantasy contest players, multiplied by the location percentage.
"Location percentage" means the percentage of the amount equal to the total of all entry fees, rounded to the nearest tenth of a percent, collected by a fantasy contest operator from fantasy contest players located in the Commonwealth, divided by the amount equal to the total of all entry fees collected by a fantasy contest operator from all fantasy contest players in fantasy contests.
"Principal stockholder" means any person who individually or in concert with his spouse and immediate family members beneficially owns or controls, directly or indirectly, 15 percent or more of the equity ownership of a fantasy contest operator or who in concert with his spouse and immediate family members has the power to vote or cause the vote of 15 percent or more of the equity ownership of any such operator.
§ 59.1-557. Application for a fantasy contest permit; penalty.
A. No fantasy contest operator shall offer any fantasy contest in the Commonwealth without first being registered with receiving a permit issued by the Department. Applications for registration a permit shall be on forms prescribed by the Department. Any registration permit issued by the Department shall be valid for one year three years from the date of issuance.
B. The application for registration a permit submitted by a fantasy contest operator shall contain the following information:
1. The name and principal address of the applicant; if a corporation, the state of its incorporation, the full name and address of each officer and director thereof, and, if a foreign corporation, whether it is qualified to do business in the Commonwealth; if a partnership or joint venture, the name and address of each officer thereof;
2. The address of any offices of the applicant in the Commonwealth and its designated agent for process within the Commonwealth. If no such agent is designated, the applicant shall be deemed to have designated the Commissioner of the Department. If the operator does not maintain an office, the name and address of the person having custody of its financial records;
3. The place where and the date when the applicant was legally established and the form of its organization;
4. The names and addresses of the officers, directors, trustees, and principal salaried executive staff officer;
5. The name and address of each principal stockholder or member of such corporation; and
6. The applicant's experience in operating fantasy contests in any other state or country, including the operator's history and reputation of integrity, financial viability, and compliance with applicable laws and regulations;
7. The applicant's proposed internal controls, including controls to ensure that no prohibited or voluntarily excluded person will be able to compete in fantasy contests;
8. The applicant's history of working to prevent problem gambling, including instituting applicable training programs for its employees; and
9. Such information as the Department deems necessary to ensure compliance with the provisions of this chapter.
C. Every registration filed under permit issued pursuant to this chapter shall be accompanied by a nonrefundable, initial application fee set by the Department of $50,000.
D. As a condition of registration being issued a permit, a fantasy contest operator shall submit evidence satisfactory to the Department that the operator has established and will implement procedures for fantasy contests that:
1. Prevent him or his employees and relatives living in the same household as the operator from competing in any public fantasy contest offered by such operator in which the operator offers a cash prize;
2. Prevent the sharing of confidential information that could affect fantasy contest play with third parties until the such information is made publicly available;
3. Verify that any fantasy contest player is 21 years of age or older;
4. Ensure that players who are the subject of a fantasy contest are restricted from entering a fantasy contest that is determined, in whole or part, on the accumulated statistical results of a team of individuals in which such players are participants fantasy contest players;
5. Allow individuals to restrict themselves from entering a fantasy contest upon request and take reasonable steps to prevent those individuals from entering the operator's fantasy contests;
6. Disclose the number of entries a single fantasy contest player may submit to each fantasy contest and take reasonable steps to prevent such players from submitting more than the allowable number; and
7. Segregate player funds from operational funds in separate accounts and maintain a reserve in the form of cash, cash equivalents, irrevocable letter of credit, bond, or a combination thereof in an amount sufficient to pay all prizes and awards offered to winning participants players.
E. If the registration forms permit application forms are filed online using a website approved by the Commissioner of the Department, the operator shall follow the procedures on that such website for signing the forms application forms.
F. Any operator that allows its registration permit to lapse, without requesting an extension of time to file, shall be required to resubmit an initial registration permit application. An extension may be granted by the Department upon receipt of a written request.
G. 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 permit application submitted pursuant to this chapter is guilty of a Class 1 misdemeanor.
H. In addition to the application fee required pursuant to subsection C, any operator to which the Department issues a permit shall pay a nonrefundable fee of $50,000 to the Department prior to the issuance of such permit. Such fees shall be deposited by the Department into the Problem Gambling Treatment and Support Fund established pursuant to § 37.2-314.2.
§ 59.1-558. Issuance of permit; denial of same.
A. The Department shall consider all applications for registration a permit and shall issue a valid registration permit to an applicant that meets the criteria set forth in this chapter.
B. The Department shall deny registration a permit to any applicant unless it finds that:
1. If the corporation is a stock corporation, such stock is fully paid and nonassessable and has been subscribed and paid for only in cash or property to the exclusion of past services and, if the corporation is a nonstock corporation, that there are at least five members;
2. All principal stockholders or members have submitted to the jurisdiction of the Virginia courts of the Commonwealth for the purposes of this chapter, and all nonresident principal stockholders or members have designated the Commissioner of the Department as their agent for receipt of process;
3. The applicant's articles of incorporation provide that the corporation may, on vote of a majority of the stockholders or members, purchase at fair market value the entire membership interest of any stockholder or require the resignation of any member who is or becomes unqualified for such position under subsection C; and
4. The applicant meets the criteria established by the Department for the granting of registration a permit.
C. The Department may deny registration a permit to an applicant if it finds that the applicant, or any officer, partner, principal stockholder, or director of the applicant:
1. Has knowingly made a false statement of material fact or has deliberately failed to disclose any information requested;
2. Is or has been found guilty of any illegal, corrupt, or fraudulent act, practice, or conduct in connection with any fantasy contest in this the Commonwealth or any other state or has been 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 date of application for registration a permit;
3. Has at any time knowingly failed to comply with the provisions of this chapter or of any requirements of the Department;
4. Has had a registration or permit to hold or conduct fantasy contests denied for just cause, suspended, or revoked in any other state or country;
5. Has legally defaulted in the payment of any obligation or debt due to the Commonwealth; or
6. Is not qualified to do business in the Commonwealth or is not subject to the jurisdiction of the courts of the Commonwealth.
D. Any operator applying for registration a permit or renewal of a registration permit may operate during the application period unless the Department has reasonable cause to believe that such operator is or may be in violation of the provisions of this chapter and the Department requires such operator to suspend the operation of any fantasy contest until registration a permit or renewal of registration a permit is issued.
E. The Department shall issue such registration permit within 60 days of receipt of the application for registration a permit. If the registration a permit is not issued, the Department shall provide the operator with the a specific justification for not issuing such registration with specificity permit.
F. At least 60 days before the expiration of a permit, an operator shall submit a renewal application, on forms prescribed by the Department, accompanied by a nonrefundable fee of $25,000. The Department shall make a determination on an application for a renewal of a fantasy contest permit within 30 days of receipt. Any fees collected pursuant to this subsection shall be payable to the State Treasurer. All such fees received by the State Treasurer shall be remitted to the Department for the administration of this chapter.
§ 59.1-559. Independent audit required; submission to Department.
A registered An operator that has been issued a permit shall (i) annually (i) contract with a certified public accountant to conduct an independent audit, consistent with the standards accepted by the Board of Accountancy; (ii) annually contract with a testing laboratory recognized by the Department to verify compliance with the provisions of subsection D of § 59.1-557; and (iii) submit to the Department a copy of the (a) audit report and (b) report of the testing laboratory as such reports required by clause clauses (i) and (ii).
§ 59.1-561. Suspension or revocation of a permit.
A. After a hearing with 15 days' notice, If the Department determines that a fantasy contest operator has violated any of the provisions of this chapter, the Department may, with at least 15 days' notice and a hearing, (i) suspend or revoke any registration the operator's permit or (ii) impose on such operator a monetary penalty of not more than $1,000 per day for each violation of this chapter, not to exceed $50,000, in any case where a violation of this chapter has been shown by a preponderance of the evidence. The Department may revoke a registration permit if it finds that facts not known by it at the time it considered the permit application indicate that such registration permit should not have been issued.
B. The Department may summarily suspend any registration permit for a period of not more than seven days pending a hearing and final determination by the Department if the Department determines that a violation of this chapter has occurred and emergency action is required to protect the public health, safety, and welfare. The Department shall (i) schedule a hearing within seven business days after the registration permit is summarily suspended and (ii) notify the registered operator not less than five business days before the hearing of the date, time, and place of the hearing.
C. If any such registration permit is suspended or revoked, the Department shall state its reasons for doing so, which shall be entered of record. Such action shall be final unless appealed in accordance with § 59.1-562. Suspension or revocation of a registration permit issued by the Department for any violation shall not preclude civil liability for such violation.
§ 59.1-562. Hearing and appeal.
Any person aggrieved by a denial of the Department to issue a registration permit, the suspension or revocation of a registration permit, the imposition of a fine, or any other action of the Department may seek review of such action in accordance with Article 5 (§ 2.2-4025 et seq.) of the Administrative Process Act in the Circuit Court of the City of Richmond. Further appeals shall also be in accordance with Article 5 (§ 2.2-4025 et seq.) of the Administrative Process Act.
§ 59.1-563. Fees and charges.
All Except as provided in subsection H of § 59.1-557 and § 59.1-568, all fees, charges, and monetary penalties collected by the Department as provided in this chapter shall be paid into a special fund of the state treasury. Such funds shall be used to finance the administration and operation of this chapter.
§ 59.1-563.1. Taxation on fantasy contest revenue; allocation of tax revenue.
A. There shall be imposed a tax of 10 percent on an operator's fantasy contest revenue.
B. The tax imposed pursuant to this section is due monthly to the Department, and the fantasy contest operator shall remit it on or before the twentieth day of the next succeeding calendar month. If the operator's accounting necessitates corrections to a previously remitted tax, the operator shall document such corrections when it remits the following month's taxes.
C. The Department shall allocate the tax revenue as follows:
1. Five percent to the Problem Gambling Treatment and Support Fund established pursuant to § 37.2-314.2; and
2. Ninety-five percent to the general fund.
§ 59.1-565. Public inspection of information filed with Department; charges for production.
A. Except as provided in subsection B, registrations required to be filed under permits issued pursuant to this chapter shall be open to the public for inspection at such time and under such conditions as the Department may prescribe. A charge not exceeding $1 per page may be made for any copy of such documents as may be furnished to any person by the Department.
B. Reports, data, or documents submitted to the Department pursuant to the audit requirements of § 59.1-559 and records submitted to the Department as part of an application for registration a permit or renewal of a permit that contain information about the character or financial responsibility of the operator or its principal stockholders shall be deemed confidential and shall be exempt from disclosure under the Virginia Freedom of Information Act (§ 2.2-3700 et seq.).
§ 59.1-566. Permit not endorsement.
No registered fantasy contest operator shall use or exploit the fact of registration under being issued a permit pursuant to this chapter so as to lead the public to believe that such registration permit in any manner constitutes an endorsement or approval by the Commonwealth.
§ 59.1-567. Acquisition of interest in fantasy contest operator.
A. If any person acquires actual control of a registered fantasy contest operator that has been issued a permit pursuant to the provisions of this chapter, such person shall register submit an application for a permit with the Department in accordance with § 59.1-557.
B. Where any such acquisition of control is without prior approval of the Department, the Department may suspend any registration permit it has issued to such operator, order compliance with this section, or take such other action as may be appropriate within the authority of the Department.
2. That any fantasy contest operator offering fantasy contests pursuant to a valid registration issued by the Department of Agriculture and Consumer Services (the Department) to fantasy contest players in the Commonwealth prior to the effective date of this act may continue to offer fantasy contests in the Commonwealth until the fantasy contest operator's permit application submitted pursuant to § 59.1-557 of the Code of Virginia, as amended by this act, has been approved or denied by the Department pursuant to § 59.1-558 of the Code of Virginia, as amended by this act, so long as the fantasy contest operator submits such permit application to the Department within 90 days following the effective date of this act.
3. That § 59.1-564 of the Code of Virginia is repealed.