In November, Virginia lawmakers will meet to decide whether the state needs a unified gaming regulator, a job currently performed by the Virginia Lottery. The state legislature passed a bill in April 2020 calling for the licensing and construction of five retail casinos, three of which have at least temporary locations now operating.
The new body, the Virginia Gaming Commission (VGC), could be ready within two years of approval by the Virginia General Assembly. The VGC would oversee the new casinos and all other forms of gambling in the state, except lottery sales, finishing the unification process in 2027.
Even that timeline would put Virginia significantly behind most other states that have legalized commercial casinos. A few other states have belatedly created regulatory bodies or tasked their lotteries with oversight. However, the norm for most states has been to create a regulator alongside the first legal casinos or expand an existing one.
In January 2023, Virginia’s first commercial casino opened — Rivers Casino in Portsmouth.
On Aug. 21, 2024, state Sen. Bryce E. Reeves, R-Spotsylvania, acknowledged that the state was overdue for a regulatory body:
Typically, we don’t do the correct process around here. We put it into law and then figure out how to do it later. So this is an opportunity for us to get it as right as we can.
Reeves was presiding over the most recent meeting of the Joint Subcommittee to Study the Feasibility of Establishing the Virginia Gaming Commission.
The chairman said the subcommittee will likely approve creating the VGC, which will involve a “two-year phase-in” after legislation passes the Virginia General Assembly.
Bonus noticed on Sept. 14 that no meeting is yet scheduled for the timeframe Reeves outlined for the vote. He said the next subcommittee meeting will be scheduled in November, after the Nov. 5 election.
Reeves added during the Aug. 21 meeting that one of the reasons to form the VGC is to have a better, less fragmented structure in place to help problem gamblers. One of the entities advocating for the new commission is the Virginia Council on Problem Gambling (VCPG).
Reeves said:
If we’re going to profit greatly from [gambling] we’ve got to make sure we’re taking [care of] what I often call ‘the lost and least among us.’
Virginia Was the Front-Runner in US Lotteries
Virginia may be trailing when it comes to a gaming regulator, but it was ahead of its time in creating a lottery. In fact, it had the first legal lottery in the US.
Lotteries generally predate other legal forms of gambling, including commercial casinos and iGaming.
As Scott Neuman reported for NPR:
In 1612, the Virginia Company of London was authorized by King James I to run a lottery to help finance ships to the Jamestown colony in Virginia.
Virginia voters approved the current lottery in 1987, with ticket sales beginning in 1988.
Perhaps that’s why the Virginia Lottery was considered fit to regulate land-based casinos and online sportsbooks in the commonwealth. Presumably, if Virginia online casinos existed, the lottery would also oversee those. While iLottery is available, iGaming isn’t yet legal in Virginia.
However, in October 2022, the Joint Legislative Audit and Review Commission (JLARC) recommended the lottery be the state’s gaming regulator. JLARC, which “conducts program evaluation, policy analysis, and oversight of state agencies on behalf of the Virginia General Assembly,” said the lottery should oversee all Virginia gambling.
So, JLARC said the lottery should take over for the Virginia Department of Agriculture and Consumer Services (VDACS) that regulates charitable gaming and the Virginia Racing Commission (VRC), which oversees horse racing betting.
Other States With Lotteries as Regulators
The commonwealth isn’t alone in its current strategy.
Five of the 27 states that house commercial casinos permit their state lotteries to regulate them. However, Virginia is by far the most populous of the five, with 8.7 million residents, according to JLARC.
The other states with lottery agencies as regulators are the following:
- Delaware (Delaware Lottery)
- Maryland (Maryland Lottery and Gaming Control Commission)
- Rhode Island (Rhode Island Lottery)
- Virginia (Virginia Lottery Board)
- West Virginia (West Virginia Lottery)
The other 22 states have separate regulatory boards or commissions that aren’t related to the state lottery.
Together, the 486 commercial casinos in 27 states generated $66.65 billion in gross gaming revenue (GGR) during 2023. Also, according to the nonprofit American Gaming Association (AGA), Virginia’s Bristol, Danville, and Portsmouth casinos brought in $1.12 billion in GGR in 2023.
In the lottery-regulated commercial casino states, only Maryland’s six casinos surpassed that GGR — with $2.5 billion in 2023. However, Maryland’s 6 million residents may not represent the only casino visitors. When advocating for his online casino bill in 2024, state Sen. Ron L. Watson urged lawmakers to pass the measure partly to offset upcoming loss of revenue. He reasoned that Virginians who had been traveling to Maryland to gamble might change habits and do so at the new casinos in their state. Watson’s bill failed.
Casinos and Regulators Are Often a Package Deal
Roughly half the states with commercial casinos — 13 of 27, to be precise — established their gaming regulatory agency at the same time as they authorized casinos. In many of those cases, the same piece of legislation established the casinos and the body to oversee them.
Many of these state agencies aren’t very old. For instance, New York created its Gaming Commission to oversee the activities of upstate retail casinos. Therefore, that body is only about a dozen years old.
The states that established their casinos and casino regulator simultaneously are:
- Colorado (Colorado Department of Revenue, Division of Gaming)
- Florida (Florida Department of Business and Professional Regulation)
- Ohio (Ohio Casino Control Commission)
- New York (New York State Gaming Commission)
- Illinois (Illinois Gaming Board)
- Indiana (Indiana Gaming Commission)
- Maine (Maine Gambling Control Board)
- Massachusetts (Massachusetts Gaming Commission)
- Michigan (Michigan Gaming Control Board)
- Missouri (Missouri Gaming Commission)
- Nebraska (Nebraska State Racing and Gaming Commission)
- New Jersey (New Jersey Casino Control Commission and the Division of Gaming Enforcement)
- New Mexico (New Mexico Gaming Control Board)
- Pennsylvania (Pennsylvania Gaming Control Board)
- South Dakota (South Dakota Commission on Gambling)
Expansion of Historic Gaming Commissions
Like lotteries, betting on horse races has been around a lot longer in the US than legal casino gambling. For many states with racetracks, the horse racing regulator has served as a natural fit for casino oversight.
Arkansas and Oklahoma made no hay about adding casino responsibilities to their equine oversight bodies:
- Arkansas (Arkansas Racing Commission added a Casino Gaming Section)
- Oklahoma (Oklahoma Horse Racing Commission)
Three other states had the foresight to assign gambling to their racing regulators even before full-featured commercial casinos entered the picture:
- Iowa (Iowa Racing and Gaming Commission)
- Kansas (Kansas Racing and Gaming Commission)
- Mississippi (Mississippi Gaming Commission)
Regulating After the Fact
At the other extreme, three states added regulators noticeably late in the game, after casino-style gambling had already established firm roots. Notably, all of these are states where the commercial gaming industry exists alongside a tribal gaming sector under the sovereign regulation of the tribes themselves.
- California (California Gambling Control Commission)
- Louisiana (Louisiana Gaming Control Board)
- Nevada (Nevada Gaming Commission and the Gaming Control Board)
California and Nevada have a history of gambling dating back to the 19th century and created their regulators to tame their unlicensed cardrooms and casinos. Louisiana, on the other hand, legalized riverboat gambling in 1991 but waited five more years before establishing its gaming control board.
All of this information relates to the modern era. Because New Orleans offered legal gambling beginning in 1806, 1876-era Deadwood was known for its casinos until South Dakota stopped being an illegal settlement in 1889, and Nevada’s reputation precedes legal gambling.
VGC Timeline May Begin in 2027
On Aug. 22, Markus Schmidt summarized for the Virginia Mercury what happens once the Virginia General Assembly approves the VGC:
The proposed two-year roadmap toward the creation of the new state agency would formally begin on July 1, [2025]. After a successful launch of the Virginia Gaming Commission, lawmakers would reconsider consolidating Virginia Lottery operations under the same roof.
‘This is the first time in 13 years that I have seen us take a proactive approach to government rather than making a cheese sandwich and saying you’ve got to eat it,’ Reeves said. ‘It’s going to allow more people the opportunity to enter the process and to those setting it up a realistic timeline so it’s not so stressful. This is what I would call a good way to govern.’
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