New DFS Laws Took Effect July 1:
What Illinois and Virginia Players Need to Know

What Happened on July 1

Daily fantasy sports has lived in a legal gray zone in a lot of states for a decade. Some states wrote rules early. Others never did, and operators ran under general skill-game reasoning. On July 1, 2026, two states moved decisively in the same direction: a formal license, a dedicated regulator, an operator tax, and a 21+ age requirement.

Illinois did it inside its state budget. The fantasy provisions ride in Senate Bill 3019, the fiscal year 2027 omnibus budget bill, which Gov. JB Pritzker signed on June 16. According to a Holland & Knight analysis published the same day, the fantasy sports provisions took effect July 1, 2026, and put DFS under the Illinois Gaming Board for the first time.

Virginia did it with a standalone bill. House Bill 145 was approved by the governor on April 13 as Chapter 565 of the 2026 Acts of Assembly, with an effective date of July 1, 2026. It repeals Virginia's old Fantasy Contests Act and moves fantasy regulation from the Department of Agriculture and Consumer Services to the Virginia Lottery.

Neither law bans DFS. Both do the opposite: they treat fantasy contests as a regulated industry with real rules. But "regulated" comes with strings, and some of those strings land on players.

Illinois: The State's First Fantasy Sports Framework

Illinois has never had a statute that defined fantasy sports or licensed fantasy operators. SB 3019 changes that. Here are the provisions that matter to players, based on Holland & Knight's June 16 summary of the law.

• Regulator: the Illinois Gaming Board (IGB), which is authorized to write rules on an emergency basis.
• Minimum age: 21.
• Operator tax: an annual privilege tax of 15% of operators' adjusted gross fantasy contest receipts. That's a tax on the operator, not on your winnings. ABC7 Chicago's report on the budget signing put the expected haul at about $5 million and noted that participants themselves are not taxed by this provision.
• Licensing tiers: smaller operators (7,500 or fewer Illinois users in the prior year) pay a $500 initial fee for a two-year license; larger operators pay $7,500.
• Pick'em: pick'em-style contests are expressly permitted.
• Single-player formats: excluded going forward, with a safe harbor for operators that offered them before the effective date.
• Gambling law carve-out: licensed fantasy activity is excluded from the criminal gambling definition and from the Illinois Gambling Loss Recovery Act.

That pick'em line is a big deal. Pick'em apps have spent years fighting over whether their contests count as fantasy or as sports betting, and Illinois chose to write pick'em into the fantasy framework rather than push it out. The flip side is the single-player exclusion: a contest where you're effectively playing alone against a pay table isn't part of the go-forward model. Peer-to-peer is.

The same budget bill also created a separate tax on sports "exchange wagers," the prediction-market-style products. A Taft Law bulletin from June 9 described it as 1.75% on each exchange wager for a licensee's first 5,000,000 exchange wagers in a fiscal year and 3.5% above that. That's a different product from DFS, but it tells you where Illinois is heading: license it, tax it, regulate it.

The Illinois Transition Window

Here's the part that headlines tend to skip. Under SB 3019, operators that were already active in Illinois before July 1 can keep operating for 90 days after the IGB's rules take effect, as long as they submit a license application in that window. Temporary licenses are available while applications are reviewed.

Read that carefully: the 90-day clock runs from the date the IGB's rules take effect, not from July 1. So the law is live, but the licensing machinery that turns it into day-to-day requirements is still being built. Holland & Knight flagged the same point for operators: be ready to file once the emergency rules land.

Under the law, the IGB's rules have to cover geolocation, know-your-customer (KYC) checks, anti-money-laundering controls, responsible gaming, underage-play prevention, and fraud detection. Those are the areas most likely to show up as account prompts once the rules are in place.

Virginia: New Regulator, New Tax, New Definition

Virginia has regulated fantasy contests since its original Fantasy Contests Act, administered by the Department of Agriculture and Consumer Services. HB 145 repeals that chapter and creates a new Chapter 42 in Title 58.1 of the Code of Virginia, putting fantasy contests under the Virginia Lottery, the same agency that oversees the state's sports betting and casino gaming.

The bill passed after a conference report that cleared the House 87–8 and the Senate 26–13 in March. Here's what the enacted text says.

• Permits: operators need a permit from the Lottery. Permits are valid for three years. The initial application fee is $50,000, deposited into the Problem Gambling Treatment and Support Fund. Renewal costs $25,000.
• Tax: 10% of an operator's fantasy contest revenue (entry fees minus prizes, adjusted for the share of entry fees collected from players located in Virginia). 2.5% of that tax goes to the Problem Gambling Treatment and Support Fund and 97.5% goes to the state's general fund.
• Extra fee: an additional 2.6% fee on fantasy contest revenue to cover the Lottery's cost of regulating the industry.
• Age: operators must have procedures to verify that every player is 21 or older.
• Audits: operators must get an annual independent CPA audit and an annual review from a testing lab recognized by the Lottery.

The Consumer Protections Written Into the Virginia Law

Before getting a permit, a Virginia operator has to show it has procedures that:

• Keep the operator, its employees, and their household members out of its cash-prize contests.
• Stop insiders from sharing confidential information that could affect contest play until that information is public.
• Verify that every player is 21 or older.
• Block athletes from contests based on the stats of teams they play on.
• Let players self-exclude on request, and take reasonable steps to keep self-excluded players out.
• Disclose how many entries a single player can submit to each contest, and enforce that cap.
• Keep player funds separate from operating funds and hold a reserve large enough to pay all advertised prizes.

For serious players, two of those stand out. Published entry caps matter in every large-field tournament, because they tell you how much of the field one multi-entry pro can own. And segregated player funds plus a prize reserve is the kind of protection you hope you never need, but it's the first thing you'd want if an operator ever got into trouble.

What Counts as a "Fantasy Contest" in Virginia

The new definition is worth reading word for word, because it describes the kind of product the state is licensing. Under the enacted text, a fantasy contest is an online game with an entry fee in which:

• two or more players compete against each other;
• prizes are set and disclosed before the contest starts;
• winning outcomes reflect the players' relative knowledge and skill and are determined by accumulated statistical results;
• no winning outcome is based on the score, point spread, or performance of a single real team or combination of teams, or solely on a single performance of one athlete in a single event; and
• no player competes against the operator.

Classic salary-cap DFS on DraftKings and FanDuel, where you build a multi-player lineup and compete against other entrants for a posted prize pool, is the textbook example. How the Virginia Lottery applies that definition to other formats is a question for the regulator, not for us, and the Lottery hasn't written its rules yet.

The Virginia Transition: Longer Than You Think

Virginia's transition is slower than most people assume. The enacted bill says:

• The Virginia Lottery Board must adopt regulations to implement the law by January 1, 2029.
• The existing Department of Agriculture regulations stay in force until the Board adopts its own.
• The Lottery begins accepting permit applications once those regulations are adopted.
• Operators that held a valid registration under the old law can keep offering contests until the Lottery approves or denies their new permit application.

Translation: the Lottery is now the regulator and the tax is in the statute, but there's no sudden July 1 cutoff for registered operators. The changeover happens as the Board writes rules and processes applications.

What Changes for You Right Now

Here's the honest version. If you play salary-cap DFS on a major app in either state, July 1 probably didn't change your next lineup. What it changed is the direction of travel. Expect these things over the coming months:

• Age checks. Both laws set 21 as the minimum. If you're 18 to 20, this is the provision to watch. How operators apply it depends on each state's licensing rules and each operator's own policies, so read any in-app notice carefully instead of relying on social media summaries.
• More verification prompts. KYC, geolocation, and responsible-gaming tools are named in both frameworks. If an app asks you to re-verify your identity or location, that's likely why.
• Product tweaks. Illinois' single-player exclusion and Virginia's player-versus-player definition both point toward peer-to-peer formats. If an app adjusts which contest types it shows you in either state, that's the reason.
• Promotions. New operator taxes and fees change the economics for operators. Whether any of that shows up in bonus offers is up to each company, and nothing in either law dictates it.

What doesn't change: neither law adds a new tax on players. The Illinois privilege tax and the Virginia tax and fee are levied on operators' fantasy contest revenue. For questions about your own tax situation, talk to a tax professional.

What This Means for DraftKings and FanDuel Players

For salary-cap players, these laws are mostly good news. A licensed, regulated market is a more stable market. The things DFS players actually need — reliable payouts, protected funds, published entry limits, a real regulator to complain to — are written into these frameworks.

The tradeoff is cost and friction. Operators now pay new taxes and fees in both states, and they have to build compliance programs for two new regulators. That's a cost of doing business, and it's the reason the industry spent years asking for clear rules instead of fighting them. Covers reported in early June that Illinois state Rep. Curtis Tarver said fantasy operators requested the change to create a regulated framework.

If you're new to DFS in either state, the playbook doesn't change: start with a platform that's licensed and transparent about where it operates, size your entries with a strict bankroll rule (our 1% bankroll guide is a good starting point), and don't chase volume until you understand the contest types. Our DraftKings vs FanDuel breakdown covers which platform fits which style.

A Five-Point Checklist for Illinois and Virginia Players

• Confirm your age eligibility. Both laws say 21+. Know where you stand before you deposit more.
• Keep your account details current. Name, address, and ID mismatches are the most common reason withdrawals stall when verification tightens.
• Read in-app notices. Operators will tell you about rule changes before blogs do. Don't skip the pop-up.
• Check contest availability by state. Formats can differ by state. Paid DFS is available in eligible states only — check your state in the app before you build a lineup.
• Use the responsible-gaming tools. Deposit limits and self-exclusion are now core requirements in these frameworks. They're there for a reason.

The Bottom Line

July 1 was a milestone, not a cliff. Illinois now has its first fantasy sports law, with a 21+ age limit, a 15% operator tax, and pick'em written into the framework. Virginia moved fantasy oversight to the Lottery, added a 10% tax plus a 2.6% fee, and wrote a player-versus-player definition into statute. In both states, the details that hit your account — verification, age checks, contest formats — arrive as regulators write their rules.

If you play salary-cap DFS, the smart move is boring: stay on licensed apps, keep your account verified, and let the regulated market do what it's supposed to do. We'll cover the rulemaking as it happens.