11 Va. Admin. Code § 5-80-100

Current through Register Vol. 41, No. 2, September 9, 2024

Section 11VAC5-80-100 - Security of funds and data

A. A permit holder shall comply with all applicable state and federal requirements for data security.

B. A permit holder shall not share information that could be used to personally identify a sports bettor with any third party other than the department, law enforcement with a warrant or subpoena, or a credit-reporting agency, except when a better provides consent. Information that could be used to personally identify a sports bettor includes gaming habits, except when this information has been anonymized.

C. Funds in a sports bettor's player's account shall be held either

(i) in trust for the sports bettor in a segregated account or

(ii) in a special-purpose segregated account that is maintained and controlled by a properly constituted corporate entity that is not the permit holder and whose governing board includes one or more corporate directors who are independent of the permit holder and of any corporation related to or controlled by the permit holder. A corporate entity that maintains a special purpose segregated account shall:

1. Require a unanimous vote of all corporate directors to file bankruptcy and have articles of incorporation that prohibit commingling of funds with those of the permit holder except as necessary to reconcile the accounts of sports bettors with sums owed by those sports bettors to the permit holder;

2. Be restricted from incurring debt other than to sports bettors pursuant to the rules that govern their user accounts;

3. Be restricted from taking on obligations of the permit holder other than obligations to sports bettors pursuant to the rules that govern their user accounts; and

4. Be prohibited from dissolving, merging, or consolidating with another company, other than a special-purpose corporate entity established by another permit holder that meets the requirements of this section, while there are unsatisfied obligations to sports bettors.

D. A permit holder shall maintain a reserve for bets that are settled, plus the amount of outstanding and unsettled bets.

E. A permit holder shall implement and prominently publish the following on its platform or within the terms and conditions inside the sports betting platform:

1. Policies that prevent unauthorized withdrawals from a sports bettor's account by a permit holder or others;

2. Notices that make clear that the funds in the segregated account do not belong to the permit holder and are not available to creditors other than the sports bettor whose funds are being held;

3. Policies that prevent commingling of funds in the segregated account with other funds, including funds of the permit holder;

4. Consistent with the provisions of § 58.1-4043 of the Code of Virginia, procedures for responding to and reporting on complaints by sports bettors that their accounts have been misallocated, compromised, or otherwise mishandled;

5. Procedures that allow a sports bettor to request withdrawal of funds from the sports bettor's user account whether such account is open or closed. The permit holder shall honor any sports bettor's request to withdraw funds by the later of five days after receipt of the request or 10 days after submission of any tax reporting paperwork required by law unless the permit holder believes in good faith that the sports bettor has engaged in either fraudulent conduct or other conduct that would put the permit holder in violation of this chapter, in which case the permit holder may decline to honor the request for withdrawal for a reasonable investigatory period until the permit holder's investigation is resolved if the permit holder provides notice of the nature of the investigation to the sports bettor. For the purposes of this subdivision, a request for withdrawal shall be considered honored if the request is processed by the permit holder but is delayed by a payment processor, a credit card issuer, or the custodian of a segregated account; and

6. Procedures that allow a sports bettor to permanently close a player account at any time and for any reason. The procedures shall allow for cancellation by any means, including by a sports bettor on any platform used by that sports bettor to make deposits into a segregated account.

F. If winnings are awarded to a sports bettor with a closed account, those winnings, to the extent that the winnings consist of funds, shall be distributed by the permit holder within seven days, provided, however, that if an account is closed on the basis of the permit holder's good faith belief after investigation that the sports bettor has engaged in fraud or has attempted to engage in behavior that would put the permit holder in violation of this chapter, such winnings may be withheld, provided that the winnings are redistributed in a manner that reflects the outcome that would have resulted had that sports bettor not participated.

G. If a sports bettor's segregated account remains unclaimed for five years after the balances are payable or deliverable to the sports bettor, the permit holder shall presume the account to be abandoned. The permit holder shall report and remit all segregated accounts presumed abandoned to the State Treasurer or his designee pursuant to Chapter 25 (§ 55.1-2500 et seq.) of Title 55.1 of the Code of Virginia. Before closing an account pursuant to this subsection, a permit holder shall attempt to contact the player by mail, phone, and email.

H. A permit holder shall prominently publish all contractual terms and conditions and rules of general applicability that affect a sports bettor's segregated account. Presentation of such terms, conditions, and rules at the time a sports bettor initially acquires a segregated account shall not be deemed sufficient to satisfy the provisions of this subsection.

11 Va. Admin. Code § 5-80-100

Derived from Virginia Register Volume 37, Issue 04, eff. 10/12/2020.

Statutory Authority: §§ 58.1-4007, 58.1-4015.1, and 58.1-4030 through 58.1-4047 of the Code of Virginia.