Virginia Reignites Quest to Pass Online Casino Legislation

Last year, the Virginia state legislature took a swing at passing iGaming legislation. That swing came in the form of SB 118, a bill that sought to lay the framework to allow residents to play online casino games of chance. Indeed, the bill failed to make it out of committee and ended up being put on the shelf for another year. It's another year, and the legislation has been brought back by a vote of 9-6 with amendments by the appropriate Senate committee for all due consideration.

As designed last year, SB 118 sought to do two things: establish the state's iGaming regulatory environment while simultaneously banning resident access to sweepstakes casinos. The attempt to outlaw sweepstakes casinos follows a trend that seems to be crossing the nation. What's at risk? Experts have stated that the Virginia online gambling market could be an estimated $400 million unregulated market. At an estimated tax rate of 15% on gross revenue, that could put as much as $60 million in the state's coffers.

Note: Retail casino gambling is quite robust in the Cavalier state, where retail casinos generated approximately $732.2 million in gross revenue. That came from casinos in Bristol, Danville, Portsmouth, and Norfolk for a portion of the year.

As for what's in HB 118, a lot of focus is placed on showing support for problem gambling initiatives. The core of the bill mentions the inclusion of data checks to spot risky gambling patterns and providing quick access to a proposed three-step intervention process. The bill also mentions the exclusion of debit and credit cards as viable deposit options.

The Proposed Ban on Sweepstakes Casinos

Of course, regulators fully understand the need for them to stem the flow of gambling dollars leaving the state. That starts by cutting off residents from having access to sweepstakes casinos.

Sweepstakes casinos are often referred to as social casinos because play is largely free in a gaming environment that encourages social interactions. As customers join a site, they are given free "gold coins," which can be used for free casino play. If players win, they only get more gold coins, which have no value.

Where some sweepstakes casinos are getting the wrath of state regulators is when they give customers access to "sweep coins." These are coins that can be accumulated and used to participate in gaming tournaments and or sweepstakes drawings. The real issue comes when these coins can be redeemed for real prizes. By definition, that is gambling with access coming from unlicensed casino operators. What kind of prizes?

• Gift cards from major merchandisers


• Electronics - smartphones, PCs, tablets, and big screen TVs


• Vacation and travel vouchers


• Real cash

While Virginia residents seem to favor the passing of this kind of legislation, there is one group that opposes iGaming sites. Obviously, that one group would be retail casino owners/managers who fear having their revenue savaged by online operators.

It remains to be seen if SB 118 will succeed. However, there is pressure to get it passed, with the state losing access to revenue that's going to other online gambling sources.