A divided Virginia Senate has voted to advance legislation that would permit online casino gaming under state regulation, sending Senate Bill 118 to the House of Delegates for further consideration.
The chamber’s approval came only after an earlier failure on the same day. Lawmakers initially rejected the bill 19-20 on Feb. 16 before bringing it back to the floor, where it passed 19-17. The reversal highlighted persistent disagreement over expanding gambling through mobile platforms.
Before final passage, senators amended the proposal to delay implementation until July 1, 2027. Even if the measure clears the House and receives the governor’s signature, online casinos would not begin operating until that date.
Licensing Limits and Oversight Structure
Under SB 118, the Virginia Lottery would regulate online casino activity. Eligibility for licences would remain restricted to the five operators that currently run land-based casinos in the state. Each operator would pay $500,000 for an initial five-year licence, followed by a $250,000 renewal fee.
The bill permits each casino operator to run up to three online platforms. Every platform would require a $2 million fee.
Lawmakers set a 20% tax on adjusted gross iGaming revenue and added a 6% economic development fee. Of the 20% tax, 95% would go to the Modern Public Education Fund. The remaining share would be divided between the Gaming Regulatory Fund and the Problem Gambling Treatment and Support Fund.
Revenue collected through the separate 6% fee would support a Casino Gaming Hold Harmless Fund. That fund would distribute equal payments to casinos in Bristol, Danville, Norfolk, Portsmouth, and Petersburg through July 1, 2032. After that date, operators seeking compensation would need to show revenue losses tied to online gaming.
The legislation directs the Virginia Lottery to finalize regulations by Jan. 1, 2027, setting the stage for a July 1, 2027 effective date. Fiscal year 2028 would mark the first year of anticipated revenue.
Revenue Forecasts and Market Concerns
Financial projections reviewed by lawmakers estimate $343 million in total state revenue during FY28. Annual revenue could exceed $1 billion by FY32, while net iGaming revenue in a mature market could reach $3.56 billion by FY31.
At the same time, analysts expect the expansion to affect the state’s iLottery program. Forecasts indicate iLottery revenue could decline 25.5% in FY28 and fall as much as 53% below projected levels by FY32. The Department of Planning and Budget estimated annual iLottery profit reductions between $77 million and $163 million. Additional personnel costs for the Lottery could approach $1.16 million annually beginning in FY28.
Opponents focused on accessibility and addiction risks linked to mobile devices. Sen. Bill Stanley told colleagues: “We are being asked to take the single most addictive device in human history, the smartphone … and now we’re being asked to put a slot machine on it, let that sink in for a moment.”
The House is reviewing its own proposal, HB 161, which would require passage in two consecutive legislative sessions. Lawmakers in both chambers must resolve differences in timing and procedure before Virginia can determine whether to authorize online casino gaming.
Source:
“Virginia Senate Advances iGaming Bill With 2027 Timeline”, news.worldcasinodirectory.com, February 17, 2026
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