Virginia’s journey toward legalizing online casinos has made significant strides this month as lawmakers approved key aspects of House Bill 161 and Senate Bill 118. However, the path remains uncertain, with several hurdles ahead. These bills aim to regulate iGaming, provide consumer protection, and curb illegal gambling, but the debate has sparked intense opposition and support from various stakeholders.

Legislative Progress: A Step Toward Legalization

House Bill 161, which seeks to authorize online casinos in Virginia, passed through the General Laws Gaming Subcommittee and the full General Laws Committee in early February, although the votes were far from unanimous. The subcommittee approved the bill by a narrow 5-4 vote, and the full committee voted 12-8 in favor. The bill is now set to go before the Appropriations Committee for further review.

In parallel, the Senate’s companion bill, SB 118, initially struggled but found renewed life after amendments aimed at bolstering responsible gaming protections. After passing a committee by a 9-6 vote, the bill is now awaiting review by the Finance Committee. If both bills continue to gain momentum, they could lead to the launch of a legal iGaming market in Virginia within a few years.

The proposal to legalize online casinos in Virginia is partly a response to the state’s unregulated $12 billion online casino market. Proponents argue that legalizing iGaming could address the issue of illegal operators while generating much-needed tax revenue. According to Del. Marcus Simon, the sponsor of HB 161, “The best way to combat the illegal operators is to create a legal alternative for them, bring it in and then have everybody subject to the regulations.”

Under the proposed legislation, Virginia’s five existing land-based casinos would be allowed to offer up to three online casino platforms each, creating a maximum of 15 iGaming platforms. These platforms would be regulated by the Virginia Lottery, which would impose a tax rate of 15% on operators’ gross gaming revenue—a relatively low rate compared to other states. A licensing fee of $500,000 per operator and a platform fee of $2 million would also apply.

While the focus of the bill is on online casinos, it also targets a controversial form of gambling known as sweepstakes gaming. These types of contests, often operated in a legal gray area, allow players to exchange virtual currency for prizes. HB 161 would make it illegal for any entity to offer sweepstakes gaming unless they are licensed as iGaming operators, with penalties for non-compliance. This provision is aimed at cleaning up the state’s online gambling environment by shifting players away from unregulated platforms to those that are subject to consumer protections.

Responsible Gambling Measures

Both HB 161 and SB 118 emphasize responsible gambling practices, which have been a significant concern for lawmakers. The bills require operators to monitor player behavior and implement intervention measures when necessary. Players showing signs of problematic gambling, such as increased bets or extended sessions, would be subject to warnings, account restrictions, and even termination in severe cases. Additionally, prepaid cards would be banned as a funding method, and credit card usage would remain prohibited.

The legalization of online casinos is expected to bring significant economic benefits to Virginia. Paralleling the benefits of legal sports betting, the iGaming market could generate substantial tax revenue and create new jobs. The bill also mandates the establishment of live dealer studios within the state, a move that is expected to generate hundreds of high-quality, local jobs. If approved, the iGaming expansion could further enhance Virginia’s reputation as a key player in the regional gaming market.

Despite the growing support for legalized iGaming, there remains strong opposition from some quarters. Local casino operators, such as Live! Casino Virginia, have voiced concerns about the potential revenue loss from the expansion of online gambling. The company has warned that online casinos could siphon revenue away from physical venues, harming jobs and tax income in the process. Furthermore, some lawmakers worry that online casinos could increase problem gambling, particularly among vulnerable groups.

Opponents of the bill argue that legalizing online casinos would undermine the existing brick-and-mortar casinos and push more players into the unregulated, black-market space. According to SBC Americas, Mark Stewart, representing Live! Casino, cautioned against the proliferation of online casinos, saying, “Please don’t put a casino on every phone, in every pocket, in every car, even in middle schools.”