West Virginia Lawmakers Seek to Raise Taxes on Online Gambling

Too much of a good thing might not be good news for online gambling operators in states where related tax revenue has proven beneficial. That might be exactly what is happening in West Virginia.

With the state still struggling to cover revenue shortfalls, lawmakers are looking for ways to pull more revenue into the state's coffers. Far too often, lawmakers are turning up the heat on online sportsbooks and iGaming operators for that extra boost.

West Virginia House Delegate Adam Burkhammer formally introduced two bills that would effectively increase the tax rates charged to operators on online gambling gross revenue. The two bills presented on January 16, 2026, include House Bill 4397 and House Bill 4398. Why two bills?

Both bills call for operators to submit weekly tax reporting and make weekly payments. The difference in the bill relates to a provision directed at carry-forward losses. Bill 4397 would allow operators to carry forward unused losses for one week to the next, with refund provisions remaining at 10% upon license surrender. This effectively allows operators to offset gains in subsequent periods. That provision is not included in Bill 4398.

As for the actual tax rates, the rate would increase from 10% to 25% on sports betting gross revenue, and 15% to 25% on iGaming gross revenue.

While these bills are currently under House review, it's noteworthy that West Virginia’s current tax rates are lower than the rates being charged in many other states. This would seem like an attempt to bring West Virginia's online gambling tax rates closer in alignment to those of other states.

Who Will Really Pay the Price?

U.S. online gambling operators are savvy. If taxes were to be increased on their gross revenue, it's not likely that they would lie down and simply absorb the rates on their own. Those taxes will likely be passed down the line. Whose down the line? That's right, customers.

As for how they can pass these costs down to customers, there are several ways this can be done. That would include:

• Making site-favorable adjustments to sports-betting lines (includes increasing the vig on certain wagers


• Pulling back or lessening bonus promos


• Cutting back on customer service


• Providing access to online casino video slots with lower "return to player" percentages


• Increasing minimum deposit requirements


• Increasing fees on deposits and withdrawals
  

How Operators Would Be Negatively Impacted

If such a move prompted West Virginia online gambling operators to remove customer benefits, they could lose customers to neighboring states and offshore sites that have more to offer. That would hurt the ability to compete.

Additionally, weekly reporting requirements would create more administrative burdens that might increase employment costs. Increased employment costs might eventually translate to layoffs.

If the increased rates would hurt customers and operators, then why do it? When tax revenue is needed, gambling is the first place that regulators like to go.

It's noteworthy that West Virginia is not the only state that is looking at such a move at a time when government costs keep rising.