Virginia Online Casino Bill Sponsor Pumps the Brakes, Aims to Start Over in 2026

Senator Mamie Locke observes Senate Debate at Richmond Capitol building in 2010
Photo by Steve Helber/AP Photos

Virginia’s online casino effort is on hold until at least 2026. A bill introduced at the beginning of the year would have allowed each of the state’s new retail casinos to apply for an online gaming license. However, the bill’s sponsor now wants to press pause and try again next year.

Senate Bill 827, which would have permitted licensees up to three partners or “skins” each, was pre-filed by Senator Mamie Locke on Dec. 31, 2024. However, in a surprising turn, on Monday, Locke requested the Senate Subcommittee on Gaming postpone consideration of the bill, citing the need for additional study. Locke said she expects the legislation to return to consideration in 2026.

Notably, the pause follows the Monday delivery of the Department of Planning and Budget‘s fiscal impact statement, which detailed the Virginia Lottery‘s opposition.

Said Locke:

This bill is designed to authorize reputable, regulated companies to offer internet gaming to Virginians within a safe and legal market. However, after introducing this bill, we have decided that it requires further study.

A companion bill, House Bill 2171, met the same fate after the House Subcommittee on Gaming unanimously tabled the measure following a similar fiscal report.

Virginia Lottery says iGaming would be net negative

Although history has taught industry watchers not to expect a first legalization effort to succeed, Locke’s shift is unique. To our knowledge, we’ve never seen a lawmaker start an online casino effort and then immediately change course.

Nonetheless, had it passed, Locke’s legislation would have required a $1 million application fee and a 15% tax on adjusted gross internet gaming revenue. The bill earmarked 2.5% of collected taxes to Virginia’s Problem Gambling Treatment and Support Fund and 97.5% to the state’s General Fund.

However, as noted above, the Virginia Lottery projected a net negative impact on the Commonwealth’s revenues in the fiscal report.

In summary, the statement concluded:

This bill will create new revenues for the General Fund and Problem Gambling Treatment and Support Fund, and could reduce revenues to the Lottery Proceeds Fund and School Construction Fund, due to negative impacts on lottery sales and profits, and casino gaming taxes. The Virginia Lottery indicates the net impact to all Commonwealth revenues is expected to be negative.

Specifically, the Lottery indicated that the bill’s licensing fees would not sufficiently cover its related regulatory costs.

As a solution, the fiscal note suggested that the implementation would require a share of tax revenues and licensing fees. Alternatively, the statement called for an “additional percentage-based fee assessment to licensed operators” intended for the Gaming Regulatory Fund to support the program’s costs.

Further, the statement cited proof that states with both iLottery and online casinos experience lower iLottery sales, profits, and growth rates than iLottery-only states.

Information, including reports from Eilers & Krejcik, show that the average annual growth in total iLottery sales is higher in states with only iLottery, compared to states (Michigan and Pennsylvania) with both iLottery and iGaming, (US iLottery Tracker – 1Q24).

The fiscal report further cautioned that online casinos could negatively impact Virginia’s online sports betting revenues and, as a result, the general fund.

About the Author

Robyn McNeil

Robyn McNeil

Robyn McNeil (she/they) is a Nova Scotia-based writer and editor, and the lead writer at Bonus. Here she focuses on news relevant to online casinos, specializing in responsible gambling coverage, legislative developments, gambling regulations, and industry-related legal fights.
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