A district lawmaker in Washington, D.C., introduced legislation that would legalize online casino gaming, while also implementing a ban on online sweepstakes casinos.
Councilmember Wendell Felder on Thursday introduced Council Bill 260656 as a piece of legislation that aims to authorize online casino gaming and impose a ban on unlicensed gambling operators that use a dual-currency payment system.
The measure, coined the Internet Gaming and Consumer Protection Act, establishes the regulatory framework for online casinos while thwarting the operation of online sweepstakes casinos that fail to offer the same consumer protection standards as licensed entities. The sweepstakes casinos also pull potential tax revenue from DC.
“This bill reflects a practical, data-informed approach to strengthening consumer protections, modernizing our gaming framework, and capturing revenue that is currently flowing outside of the district’s oversight,” Felder said in a letter to the DC Council.
According to data provided by Felder, DC residents wagered approximately $700m with unlicensed and offshore gaming platforms in 2024. The wagering contributes to the “hundreds of billions of dollars” Americans spend annually to wager with unlicensed operators.
“These figures make clear that iGaming is not a new activity—it is already occurring. The policy question is whether the district will regulate it effectively or allow it to remain unregulated,” continued Felder.
The Internet Gaming and Consumer Protection Act has been referred to Committee on Human Services for consideration.
How iGaming would be regulated in DC
Under Felder’s measure, online casino gaming is under the regulatory oversight of the Office of Lottery and Gaming (OLG). The OLG is required to implement a minimum wagering age for online casino gaming of 21. The regulator is also required to impose the bill’s tax revenue structure and licensing requirements for prospective iGaming operators.
The Internet Gaming and Consumer Protection Act allows the OLG to issue operator and supplier licenses for iGaming. It does not cap the number of licenses the OLG can award.
A prospective operator is required to put up $2m for an application fee, with initial licenses set for a five-year term. Renewal fees for iGaming licenses are $500,000.
“Inaction carries real consequences,” said Felder. “Without a legal framework, revenue continues to flow to unregulated operators, consumers remain exposed to risk, and the district falls behind neighboring jurisdictions that are moving forward”.
The renewals are also for a five-year term.
How would DC online casino gaming be taxed?
The Internet Gaming and Consumer Protection Act mandates that licensed iGaming operators be taxed at a 25% rate on adjusted gaming revenue. The act allows negative gaming revenue reported by operators to be carried over from month to month.
“Initial annual tax revenue could reach tens of millions of dollars, with growth expected as the market matures. These funds could support critical priorities, including behavioral health services, responsible gaming programs, and broader community investments,” added Felder.
Under the bill, the first $500,000 of tax revenue generated from online casino gaming is to be allocated toward the Department of Behavioral Health (DBH) “for prevention, education, treatment, referral, and recovery services related to gambling addiction and related behavioral health needs”.
After the first $500,000 is sent to the DBH, the remaining tax revenue from online casino gaming is to be distributed to several departments and offices. The Department of Insurance, Securities and Banking, the Office of Victim Services and Justice Grants and the Department of Employment Services each receive 30% of tax revenue.
Meanwhile, the Department of Health receives 10% of tax revenue from iGaming.
Potential sweepstakes casino ban in DC
The bill also seeks to impose an online sweepstakes casino ban that takes direct aim at dual-currency systems of payment and provides a definition for the offerings.
It defines a dual-currency gaming product as a “game, promotional scheme, or platform that uses 2 or more forms of currency, credits, tokens, entries, points, or similar units, whether purchased or awarded, where one or more such units may be redeemed, converted, transferred, or used directly or indirectly for cash, cash equivalents, prizes, or prize equivalents”.
The measure allows the OLG to send cease-and-desist orders to unlicensed operators that offer online sweepstakes casino gaming in the district.
The measure also provides penalties for operating a dual-currency sweepstakes gaming product, with violators subject to a civil fine of up to $100,000 for each violation. If an entity violates the bill’s sweepstakes ban multiple times, a $500,000 fine is on the table.
The bill also allows DC’s Attorney General to take legal action against sweepstakes casino operators with enforcement actions that include “restitution and disgorgement”.
If the Internet Gaming and Consumer Protection Act is approved, DC would join Indiana and Maine as U.S. jurisdictions to implement a sweepstakes casino ban in 2026. This year, lawmakers in Virginia and Mississippi failed to pass bills to outlaw sweepstakes casinos.
Meanwhile, Maryland lawmakers are considering a measure to ban the products.
Previous gaming expansion in DC
DC lawmakers are considering a bill to legalize online casinos after the nation’s capital established an open market for online sports betting in 2024, ending FanDuel’s brief monopoly.
FanDuel took over exclusive rights to online sports betting in DC, replacing the district’s original sports betting contractor, GambetDC—a platform powered by Intralot.
DC became an open sports betting market through a fiscal budget signed by Mayor Muriel Bowser that allowed multiple operators to enter the jurisdiction’s online gaming market.
DC is now home to six online sports betting operators.
