A legislative effort to bring online casinos to Virginia has hit a bump in the road.
The Senate General Laws and Technology Gaming subcommittee rejected Senate Bill 118, a measure to legalize online casinos, by a 3-4 vote last week. . The vote temporarily prevents SB 118 from being considered by the state’s full General Law and Technology Committee. Virginia’s legislative session, which concludes on March 14, allows the measure to be reconsidered with amendments at a forthcoming meeting that includes the entire subcommittee. Virginia’s legislature rules require Senate bills to advance out of their original chamber by Feb. 17.
What SB 118 wants iGaming to look like in Virginia
SB 118 proposes the authorization of online casino gaming for slots, poker and table games, with up to 15 operators allowed to accept customers in the state. Under SB 118, operators are required to ink market access deals with one of Virginia’s five retail casinos.
Each land-based casino can hold up to three online casino skins.
Why do some lawmakers want legalized online casinos?
SB 118, sponsored by Sen. Mamie Locke, was introduced to provide the state with a new revenue-generating opportunity and to combat the proliferation of unlicensed gaming platforms that operate illegally within the state. SB 118 aims to provide a regulatory framework for online casino gaming that is currently absent without its legalization.
“We can sit here and clutch our moralistic pearls all we want to. But it’s [online casino gaming] already being done. So, we can keep it illegal, or we can put up some guardrails,” said Locke during the subcommittee’s hearing on the piece of legislation.
Locke’s effort to legalize online casinos in Virginia has support from Boyd Gaming, Evolution, Caesars Entertainment and the Sports Betting Alliance, a trade group with current members that include bet365, BetMGM, DraftKings, FanDuel, and Fanatics.
Opponents of Virginia online casinos
SB 118 is receiving support from major operators but is receiving pushback from retail horse racing giant Churchill Downs and the National Association Against iGaming (NAAiG), a group that opposes online casinos over cannibalization and gambling addiction concerns. According to data provided by the Innovation Group and the NAAiG, land-based casinos could lose $78.2 million in tax revenue and up to 2,200 jobs from iGaming.
Lawmaker wants more problem gaming requirements
Problem gambling concerns were also raised by lawmakers who currently opposed SB 118.
“We gotta figure this out,” said subcommittee Chairman Jeremy McPike during the hearing. “I’m going to abstain on this one because I do want to see legislation that really ups the game in terms of problem gaming. We need to deal with this and this is probably one of the most challenging areas with problem gaming.”
McPike is calling for adequate problem gambling protocols for online casino gaming as one of the lawmakers who was responsible for the legalization of sports betting in Virginia.
The Campaign for Fairer Gambling (CFG) also voiced concerns during SB 118’s hearing.
“Research is clear, these [online casinos] are the single most addictive gambling products by about 10 times the rate. Is this body [legislative body] prepared to turn every Virginian’s hand into a casino?,” CFG representative Brianne Doura-Schawohl asked lawmakers.
The viability of the Virginia Lottery to regulate online casino gaming is also being questioned as lawmakers also propose bills to create a new independent agency for gaming regulation, the Virginia Gaming Commission. Lawmakers in the state are currently considering bills in both the House and Senate that aim to create the new regulator.
SGLA wants to separate social plus & iGaming
SB 118 has also garnered the attention of the Social Gaming Leadership Alliance (SGLA), an advocacy group for social gaming that has a membership that includes Virtual Gaming Worlds and Publishers Clearing House owner ARB Interactive.
“Forcing the square peg of sweepstakes games into the round hole of iGaming regulation will mean many longstanding, responsible social plus companies will be unable to continue to operate in Virginia,” said SGLA Managing Director Sean Ostrow.
The SGLA wants lawmakers in Virginia to reconsider SB 118’s provision that requires social gaming brands to apply for an online casino license in the state. The group wants lawmakers to draft a separate piece of legislation that creates a regulatory framework solely for social plus gaming. The SGLA estimates social gaming regulation to generate approximately $27 million in new revenue for Virginia.
Other online casino efforts in Virginia
Earlier this month, Virginia Del. Marcus Simon introduced House Bill 161, a piece of legislation that proposes the authorization of online casino gaming with regulation by the Virginia Lottery Board. The measure provides land-based casino operators with the opportunity to apply for an iGaming license, with an initial licensing fee set at $500,000.
The retail casinos can offer up to three skins behind a $2 million “platform” fee.
Simon’s bill proposes placing a 15% tax rate on adjusted gross revenue for online casino gaming. The tax rate mirrors the lawmaker’s previous effort to legalize iGaming in 2024.
HB 161 also bans unlicensed operators from offering online casino sweepstakes games. The bill has been assigned to the General Laws: ABC/Gaming Committee for consideration.
