West Virginia imposes 15% tax on daily fantasy sports contest revenues

On March 18, 2025, the West Virginia State Legislature introduced House Bill 3481, a significant piece of legislation aimed at regulating daily fantasy sports contests within the state. The bill seeks to establish a framework for the operation of these contests, ensuring both consumer protection and revenue generation for state programs.

One of the primary provisions of House Bill 3481 is the imposition of a 15% privilege tax on the adjusted gross receipts of daily fantasy sports operators. This tax is designed to replace other state and local taxes, with the exception of property taxes, thereby simplifying the tax structure for operators. The revenue generated from this tax will be deposited into the newly created West Virginia Daily Fantasy Sports Contests Fund, which will support the administration of the contests and contribute to the State Lottery Fund and the Public Employees Insurance Agency Financial Stability Fund.

The bill also addresses issues of accountability and transparency. It mandates that any complaints regarding prohibited conduct by athletes be reported to the appropriate sports governing body, while ensuring the confidentiality of the reporting individuals unless they choose to disclose their identity. Furthermore, the legislation outlines the commission's authority to adopt rules governing investigations and referrals to law enforcement, enhancing oversight in the industry.

Debate surrounding House Bill 3481 has focused on its potential economic implications. Proponents argue that the bill will create a regulated environment for daily fantasy sports, which could lead to increased participation and revenue for the state. Critics, however, express concerns about the potential for gambling addiction and the adequacy of measures to protect vulnerable individuals. The inclusion of provisions for compulsive gaming assistance in marketing materials aims to address these concerns.

As the bill progresses through the legislative process, its implications for the state's economy and public health will be closely monitored. If passed, House Bill 3481 could pave the way for a more structured approach to daily fantasy sports in West Virginia, balancing the interests of operators, consumers, and the state government. The next steps will involve further discussions and potential amendments as lawmakers weigh the benefits and challenges presented by this legislation.