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This week, Virginia’s journey toward legal online gambling took an odd turn. A legislative session was not so much a hearing as it was a suspenseful drama. Initially, a bill to allow iGaming was killed by the Virginia Senate. They brought it back to life a few hours later and narrowly defeated it. The 19-17 triumph is being celebrated by supporters of Senate Bill 118. But there is a huge asterisk attached to the legislation. A major delay is guaranteed by a last-minute change. No digital cards will be available in the Commonwealth until July 1, 2027, if the bill is passed.
The Senate Flip-Flop
Tuesday’s session in Richmond was chaotic. The Senate rejected the proposal by a single vote earlier in the day. This seemingly ended the debate for the year. However, lawmakers reconsidered the measure later that afternoon. The second vote flipped. This allowed the bill to squeak through and head to the House of Delegates. There are strong disagreements about gaming expansion, which is reflected in the caution. Physical casinos and sports betting are already popular in Virginia. However, almost half of the chamber is still opposed to having a casino on every smartphone.
The Long Wait
The timeline is the most significant development. The amendment pushes the effective date to mid-2027. This delay acts as a cooling-off period. It gives the Virginia Lottery more than a year to draft complex rules. Under the current plan, the Lottery won’t finalize regulations until January 2027. This slow approach suggests lawmakers are wary of rushing. They prefer a long runway to address addiction and market stability concerns.
How the Market Would Work
If the bill survives the House, the state will control the market tightly. Licenses are not open to everyone. Only operators of Virginia’s existing land-based casinos can apply. Each operator must pay an initial $500,000 fee for a five-year license. They also pay a $2 million fee for each platform they launch. The state plans to take a significant cut. The legislation sets a 20% tax on adjusted gross revenue. Operators must also pay an additional 6% “economic development fee.” Debate surrounds the money’s destination. The state earmarks most tax revenue for the Modern Public Education Fund. Meanwhile, the extra 6% fee ensures cities hosting physical casinos. These include Bristol, Danville, Norfolk, Portsmouth, and Petersburg. This “Hold Harmless Fund” aims to offset any drop in physical visitors caused by online play.
The Cannibalization Fear
The primary economic argument against the bill is “cannibalization.” Critics fear online casinos will steal customers from the Lottery and physical casinos. A fiscal review by the Joint Legislative Audit and Review Commission (JLARC) painted a mixed picture. A mature iGaming market could generate over $1 billion annually by the early 2030s. This would bring hundreds of millions in tax revenue. However, the same report warned of losses. The Virginia Lottery could see online profits slashed by more than half. The Department of Planning and Budget predicted annual lottery profit losses ranging from $77 million to over $160 million.
The Opposition and the House Hurdle
The Senate floor debate was intense. Critics claimed that iGaming turns any smartphone into a gambling machine that is open around-the-clock. According to public health research, there is a greater chance of addiction while betting online as opposed to in person. SB 118 will have a difficult time in the House, even if it passes the Senate. The House is debating HB 161, its own version. This bill includes a “two-session” requirement. It mandates that the bill pass the legislature in two consecutive years before becoming law.
This two-year process may be insisted upon by the House. If so, the Senate bill’s 2027 debut date coincides with the House’s schedule. It is now time for the two chambers to work out their differences. Virginia’s battle to allow internet casinos is far from over. The velvet rope won’t come down for another two years or more, but the entrance is open.
Source: Gambling Insider
