State Sen. Mamie Locke has pre-filed online casino
bill SB827 and plans to officially offer the document on Jan. 8.
The bill, if passed, would authorize Internet gaming in the
Commonwealth to be regulated by the Virginia Lottery Board. The bill permits
the board to issue an Internet gaming operator license to casino gaming
operators that meet certain qualifications and pay an application fee of $1
million. The license would be good for five years.
A tax rate of 15% would be placed on the casino operator's
adjusted gross revenue with 2.5 percent allocated to the Problem Gambling
Treatment and Support Fund and the remaining 97.5 percent allocated to the
general fund. The state currently applies a 15% tax rate on online sports
betting revenue that was launched in the Old Dominion in January 2021.
Illegal Online Casino Market
In recent years states have started fighting back against online
casinos operating in the U.S. that are based outside its border. Locke’s new bill
states Internet gaming is “prohibited” except when offered by a licensed gaming
operator.
New Jersey was the first state to legalize online gambling
within its borders. Today, seven states allow online casinos in their
jurisdiction; New Jersey, Michigan, West Virginia, Connecticut, Delaware,
Pennsylvania, Rhode Island, and West Virginia.
In December 2023, Michigan, and a few other states, sent
cease-and-desist letters to sweepstakes casinos available in the U.S. Sweepstakes
operators aren’t regulated, licensed, or subject to gaming taxes. These
websites are operated by companies outside the United States, also referred to
as offshore websites.
Virginia’s First Casinos
Virginia opened its first land-based gambling site, Bristol Casino,
in July 2022. Bristol Casino was a temporary location for Hard Rock Hotel &
Casino Bristol which is now open. Rivers Casino Portsmouth opened in January
2023 followed by Caesars Virginia in December 2024. Two additional casinos are
planned in Norfolk and Petersburg.
Billion Dollar Gambling Market
Virginia’s Joint Subcommittee on Gaming heard testimony from
a series of consulting and industry experts last year on the effects of online
casinos.
According to a recent American Gaming Association study,
Americans have spent nearly $338 billion with “illegal” iGaming operators in
foreign countries.
Michelle MacGregor, a Senior Policy Advisor for the Sports
Betting Alliance, provided an overview of iGaming and how it’s slowly being
introduced in U.S. states with heavy regulations not found with illegal
Internet sites.
“I can’t stress enough that legalized iGaming is among the
highest-regulated industries in America,” MacGregor told the subcommittee. “Any
licensee is required to be compliant with anti-money laundering regulations and
financial solvency requirements. And of course, they incorporate
top-of-the-line geolocation technology, consumer age and verification measures,
and safeguards for responsible gaming. It’s worthwhile looking at it from a
public policy perspective and say hey, maybe consumers want this in a legalized
channel.”
MacGregor highlighted Michigan, Pennsylvania, and New
Jersey, each generating over $1.7 billion in gross gaming revenue in 2023 which
comes out to just over a billion dollars in tax dollars across those three
states.
Since January 2021, Virginia's online sports betting market
has handled over $19 billion from bettors in the state.
A study funded by the Sports Betting Alliance and released
in April 2024 looked at the potential economic impact of legalizing iGaming in
five states, Virginia being one of them.
The Analysis Group, author of the report, said legalized
iGaming in New York, Illinois, Louisiana, Maryland and Virginia could provide a
combined total of over $42 billion between 2025 and 2029. Focusing on the
Commonwealth, the study states iGaming has the potential to generate revenues
of $5.4 billion for Virginia over the same period.
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