Virginia lawmakers are considering legislation that would restrict the operation of sweepstakes casinos in the state. House Bill 161 (HB161) proposes banning sweepstakes casinos unless they are operated by a licensed internet gaming provider, as part of a broader effort to regulate online gambling in Virginia.
The bill, filed by Marcus Simon, the delegate for Virginia’s 13th district, would make unlicensed sweepstakes gaming illegal in Virginia and establish significant civil penalties for violations.
Under the proposal, operators could face fines of up to $100,000 for a first offense and $250,000 for subsequent offenses, with each day a violation continues treated as a separate infraction.
HB161 is positioned within a broader legislative effort to legalize and regulate iGaming in the state, tying enforcement against sweepstakes casinos to a more comprehensive regulatory structure for online gambling.
This proposal is the latest development as Virginia continues to move towards legalizing online casinos.
At first glance, the legislation might appear to leave room for current online gaming models to continue operating in Virginia. However, HB161 takes a far more restrictive approach.
Under the bill, eligibility for iGaming licenses would be limited exclusively to the state’s approved land-based casino operators, each of which could operate up to three separate online platforms. Virginia currently has five authorized casino projects, setting a firm ceiling on the number of potential iGaming participants.
The financial requirements outlined in the proposal are substantial. Casino operators would be required to pay a $500,000 application fee, with renewals after five years priced at $250,000.
In addition, each online platform would require a separate notice of intent accompanied by a $2 million platform fee, paid into a dedicated Internet Gaming Platform Fee Holding Fund. Renewal fees for those platforms would be set at $1 million each.
According to the bill, revenue from these fees would be used to cover startup and operational costs tied to the creation and administration of a gaming regulatory body, with funds distributed through the state’s treasury system.
If all five casinos were to launch the maximum number of online platforms, Virginia could collect roughly $32.5 million in upfront fees, before factoring in a proposed 15% tax on adjusted gross iGaming revenue.
Beyond Virginia itself, HB161 could have meaningful ripple effects across the broader sweepstakes casino industry. Virginia represents a sizable and strategically important market due to its population, proximity to other regulated gaming states, and historically permissive gray-area environment for sweepstakes-style platforms.
Losing access to the state would not only reduce player bases and revenue streams for operators but also signal growing regulatory resistance to the sweepstakes model nationwide.
More broadly, the proposal adds momentum to a trend in which states are moving to formally define and restrict sweepstakes casinos through legislation rather than informal enforcement. If Virginia adopts a framework that explicitly excludes sweepstakes operators from participation unless they align with licensed casino entities, other states may follow a similar path.
For the industry as a whole, this raises the prospect of a shrinking U.S. footprint, with a need to pivot toward alternative products and markets to offset the loss of key states like Virginia.
