A proposal to legalize casino gaming in Virginia got the go-ahead at two important committee stages in the House of Delegates this week.
House Bill 161 passed the General Laws Gaming Subcommittee on Feb. 3 and then the full General Laws Committee on Feb. 5, although not without several no votes in both instances. The subcommittee voted 5-4 in favor and the full committee voted 12-8, and the bill now heads to the Appropriations Committee.
However, the revised version of HB 161 states that “the provisions of this act shall not become effective unless reenacted by the 2027 Session of the General Assembly,” seemingly delaying hopes of online casino being legalized in Virginia until next year.
A companion measure in the Senate, SB 118, initially stalled in subcommittee but eventually advanced after the addition of several responsible gaming measures. It cleared a committee by a 9-6 vote last week and awaits review in the Finance Committee. That version does not include the 2027 clause.
Online casino tied to brick-and-mortar gaming
Del. Marcus Simon’s bill would allow the state’s five existing land-based casinos to offer as many as three online casino skins, allowing for a maximum of 15 iGaming platforms. Caesars Entertainment, Rush Street Gaming, Hard Rock International, Boyd Gaming and Cordish Companies’ Live! Casino brand run brick-and-mortar casinos in Virginia.
The Virginia Lottery would regulate the market, which would be taxed at 15% of operators’ adjusted gaming revenue, one of the lowest rates in the country. Companies would be on the hook to pay a $500,000 licensing fee and a platform fee of $2 million.
One notable specific is that 6% of all tax revenue would be dedicated to an Internet Gaming Hold Harmless Fund, to be used solely for the purposes of offsetting any loss of revenue experienced by casino gaming operators that is attributed to online casino. The bill would also mandate the establishment of Virginia-based live dealer studios in a bid to boost the economy. Simon said Virginia would be the first state in the nation to do such a thing, and suggested it would create hundreds of well-paying in-state jobs.
Sweepstakes shut out
While the legislation is primarily about authorizing online casinos, it would also serve as a legislative ban on online sweepstakes gaming.
A provision in the text of the committee substitute that passed on Thursday notes that unless licensed as an iGaming operator, any entity offering a sweeps game would be in violation of the law and subject to penalties. The regulator would be authorized to work with the attorney general’s office and police to issue cease-and-desist orders or subpoenas to ensure compliance.
The bill defines sweepstakes as a promotional, advertising, or marketing event, contest or game in which a prize or equivalent is awarded directly or indirectly “through means such as a dual currency system of payment that allows a participant to exchange the currency for a prize or prize equivalent.”
Banning doesn’t work, argues sponsor
HB 161 was passed in a vote-only hearing on Thursday. Days earlier, it went through rigorous discussion in subcommittee before its narrow approval.
“I’ve seen some of the headlines that say that there’s a delegate who wants to bring casino-style gaming to your phone through this bill,” Simon told the room. “That’s not what this bill does. What this bill is meant to do is to bring the gaming on your phone within a legal framework that’s gonna be highly regulated, include consumer protections.
“We can try banning these things, we tried prohibition with alcoholic beverages, and it just drives into an illicit market. 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.”
Casinos in pockets
Representatives from Caesars and the Sports Betting Alliance spoke in favor of the bill, but opposition came from Cordish’s Live!, racetrack operator Churchill Downs and other racing personnel, the National Association Against iGaming.
“Virginia’s gaming industry is still new, a well-designed, friction-based gaming industry,” said Live! Casino’s Mark Stewart. “Please don’t put a casino on every phone, in every pocket, in every car, even in middle schools.”
Before voting as a reluctant yes, Del. Marcia Price called on legislators to take their time and think it over.
“As we get new bills, I hear ‘It’s happening already, so let’s regulate it.’ When are we going to just slow down and take a breath? You don’t even have to have on pants to gamble with this one! You don’t have to put on pants, you don’t have to take a shower, you don’t have to leave the house.
“I understand that if it is going to happen, I want it to have the strongest bill possible, so if I need to vote in order to keep the conversation going, I will. But please understand where I ultimately stand. This is just a bridge too far.”
