A Virginia legislative committee approved several gaming-related bills at a hearing on Tuesday morning, sending ideas including legalizing online casino and taxing daily fantasy sports (DFS) to the full Senate floor.
Senate Finance and Appropriations Committee members voted on around half a dozen pieces of gambling legislation, most of which have been through other committees already, and some of which have undergone extensive changes.
The meeting moved Virginia a step closer to potentially making significant alterations to its gambling market.
Legalizing online casino
The biggest news was that Senate Bill 118, which would legalize online casino gaming in the state, was approved on Tuesday and will now be sent to the Senate floor for full-chamber discussion and a potential vote.
SB 118 would allow in-state casinos to partner with iCasino operators to offer up to three platforms, if the online operators pay a $2 milion platform fee. One reason that fee is so substantial is that it would help to cover the costs associated with the creation and implementation of a new Virginia Gaming Commission to oversee the industry. Online casino would be taxed at 15% under the proposal, the same as Virginia’s online sports betting tax. Of the tax revenue, 6% would go to an Internet Gaming Hold Harmless Fund aimed at assuaging land-based casino cannibalization concerns.
It also includes language to make online sweepstakes casinos illegal without an iGaming license and to give the gaming regulator the power to issue cease-and-desist orders and seek injunctions against such unlicensed operators.
The bill was initially approved by a 10-5 vote.
One of the senators who voted no, Sen. Ryan McDougle, expressed concerns about the size of the changes the bills would make to Virginia’s gaming industry. “My concern about these bills is they are significant policy changes and impacts, and we should be able to look at the words of the bills before we move them forward to the floor,” he told the room.
A motion to reconsider passed 15-0. At a second vote on whether to adopt the bill, the bill was still approved but by a narrower margin of 8-6.
A House companion bill, HB 161, is moving through that chamber but now includes language that requires the bill to be re-enacted in the 2027 session, delaying the potential legalization until at least next year even if the bill were to pass this year.
During Tuesday’s brief reconsideration discussion, it was clarified that the committee substitute version of SB 118 directs the lottery to promulgate regulations by Jan. 1, 2027.
Making DFS peer-to-peer only
Another bill that passed the General Laws’ Gaming subcommittee and the full committee, SB 129, would require fantasy contest operators to apply to the Department of Agriculture and Consumer Services for a license and tax approved operators at 10% of fantasy contest revenue.
That bill, which also got unanimous approval in General Laws, also changes the definition of authorized fantasy contests to include only peer-to-peer play and exclude contests in which a player “competes against the fantasy contest operator,” effectively outlawing against-the-house DFS.
“We’ve done a lot of work in this space and the industry wants to be taxed,” said Sen. Jeremy McPike at Tuesday’s hearing. “There are still some loopholes and some bad actors.”
The bill was approved with a committee substitute by a 9-5 vote, with one abstention.
New gaming oversight
SB 195, which would have established the Virginia Gaming Commission to regulate various verticals within the gaming industry, was incorporated into another bill, SB 609. SB 195 itself incorporated a similar bill, SB 558, last month and passed the General Laws and Technology Committee by a unanimous 15-0 vote on Jan. 28.
Now, it has been rolled into SB 609, which initially focused on creating a Gaming Proceeds Fund that would collect a proportion of gaming taxes. That bill would now transfer responsibility for overseeing racing, charitable gaming and DFS to the Virginia Lottery and rename the lottery, a committee member clarified.
The incorporation measure passed 12-3, and SB 609 itself was advanced by a 10-5 vote.
Skill machines, casino location ideas also approved
Two other gaming bills also passed on Tuesday. SB 661 would define, regulate, and tax skill game machines, while SB 756 would allow for Fairfax County to host a land-based casino.
Both of those measures also passed 10-5.
