Virginia lawmakers have taken a significant step toward legalizing online casino gaming by advancing two key pieces of legislation. On a second vote, the Senate approved Senate Bill 118 (SB 118) after it previously failed. The House also passed House Bill 161 (HB 161) following a revote. Together, the bills would authorize regulated online casino operations overseen by the Virginia Lottery and allow licensed providers to offer real-money iGaming under state supervision. The measures now move forward in the legislative process as supporters seek final approval before the session adjournment.
Lawmakers approved updated versions of the legislation that would permit the Virginia Lottery to license online casino operations for the state’s five current brick-and-mortar casino companies. Each operator would be required to pay a $500,000 license fee, with the option to run up to three branded platforms by submitting an additional $2 million platform payment.
The proposed framework sets a 20% tax rate on adjusted gross gaming revenue. Budget projections indicate the move could produce roughly $343 million in new state revenue by fiscal year 2028. An additional 6% assessment would be allocated to the Casino Gaming Hold Harmless Fund, aimed at protecting existing retail casinos from potential financial impact tied to online expansion.
Although both measures authorize online casino gaming, they take different approaches on timing. The Senate’s revised SB 118 would move legalization forward this year but postpone implementation until July 1, 2027, with regulators required to complete rulemaking beforehand.
The House version, HB 161, contains a reenactment requirement mandating approval in two consecutive legislative sessions, meaning a full rollout could be delayed until 2028 even if the bill clears this year.
In addition to authorizing regulated iCasino gaming, both SB 118 and HB 161 would effectively ban sweepstakes casinos unless those operators obtain a license under the new online casino framework. The legislation specifies that any sweepstakes offering cash or cash-equivalent prizes in exchange for payment would be considered illegal internet gaming if not conducted by a licensed operator.
Under the proposed structure, the Virginia Lottery Board would have authority to enforce the ban, including issuing cease-and-desist notices and seeking court action against noncompliant or unlicensed platforms.
For players, the biggest change would be the ability to play real-money casino games legally within the state rather than turning to offshore or unregulated websites.
A regulated system provides clearer dispute resolution, verified payout processes, and safeguards around data security. It would also eliminate much of the legal gray area that currently exists for players who use out-of-state or offshore platforms.
