Virginia Nears Legalizing Online Casinos as Both Chambers Pass iGaming Bills

Virginia could become the ninth state in the US to legalize online casinos after both the Senate and the House passed legislation that would allow the state’s existing casinos to launch online platforms.

The Senate eventually approved SB118 on Tuesday, voting 19-17 in favor of the legislation despite an earlier rejection in a 20-19 vote. The final vote came after Senator Schuyler VanValkenburg, who initially voted no, called for a reconsideration vote. Then, VanValkenburg and two other previous no votes, Senators Bill DeSteph and Stella Pekarsky, declined to vote.

The House, meanwhile, approved a similar, but separate bill. Like the Senate, lawmakers initially voted against the proposal, rejecting HB161 in a 49-46 vote. After calls for a reconsideration vote, the state’s Representatives then reversed course, approving the legislation in a 67-30 vote.

Tuesday was the deadline for legislation to pass through its original chamber. Lawmakers on the fence agreed that the issue should be kept alive, but the House bill now requires further approval in the next legislative session.

In the Senate, the effective date for legalization was pushed back to July 2027. With House lawmakers having to vote on the issue again next year, it could be 2028 before online casinos go live in the state, if everything is approved.

Maine became the latest state to legalize online casinos earlier this year, following New Jersey, Pennsylvania, Delaware, West Virginia, Connecticut, Rhode Island, and Michigan.

Potential iGaming Market Terms

The bills both include the same terms for the iGaming market, which include:

• Making licenses available to existing Virginia casino operators
• Charging $500,000 for initial licenses (five-year term), $250,000 renewal
• Allowing up to three platforms per operator, with a $2 million platform fee
• Levying a 20% tax on adjusted gross iGaming revenue
• Allocating funds to problem gambling support and the state general fund
• Prohibiting sweepstakes casinos

Amid debate over the legislation, lawmakers raised the tax rate from 15% to 20%. Of this revenue, 5% will be allocated to problem gambling treatment. Until 2037, 6% will also be assigned to the Internet Lottery Hold Harmless Fund, with the remaining 89% going to the state’s general fund. After 2037, 95% will go to the general fund, with the remaining 5% continuing to fund problem gambling initiatives.

A fiscal review projected online casinos will generate $343 million in total state revenue in FY28, growing to over $1 billion annually by FY32.

The state has been increasing the number of casinos, which would be allowed to launch online platforms under the legislation’s terms. Live! Casino Virginia opened a temporary venue last month, generating $4.7 million in its first 10 days of operations. A full-scale venue is scheduled to open in 2027, along with the HeadWaters Resort & Casino development.

That would mean there will be six casinos eligible to offer online gaming if the state eventually legalizes.

Issue Remains Up for Debate

Although lawmakers in both chambers eventually approved the bills, there remain strong voices of opposition to legalizing iGaming. Sen. Bill Stanley, who voted against SB118, warned of the addiction risks, stating, “We are being asked to take the single most addictive device in human history, the smartphone … and now we’re being asked to put a slot machine on it, let that sink in for a moment.”

The bill’s sponsor, Sen. Mamie Locke, claimed that rather than increasing addiction, legalization is a way to control an already existing market. Locke said that legalization could “dramatically curtail Virginia’s thriving illegal iGaming market.”

The bill would see sweepstakes casinos made explicitly illegal. The legislation’s text states, “offering or conducting a sweepstakes in which a person present in the Commonwealth may participate by paying or proffering something of value, including an entry fee for the opportunity to win or receive cash or a cash equivalent, shall constitute illegal internet gaming.”

Violators will be hit with civil penalties of $100,000 for first offences and $250,000 if platforms continue to operate. In West Virginia, where online casinos are legal, most major sweepstakes operators have exited the state.

Both bills will now move to the opposite chambers for consideration, with opinion divided, it remains uncertain whether the chambers will approve or reject the legislation before the current session ends on March 14. Even if the bills are approved, lawmakers will still have to revisit the issue next year, at least in the House.