West Virginia lawmakers have begun considering significant changes to how online gambling is taxed, with new legislation proposing higher rates for both sports wagering and internet casino gaming starting in 2026. The measures would represent one of the largest tax shifts the state’s regulated gambling market has seen since launch.
Republican Delegate Adam Burkhammer introduced two separate bills that would apply a 25% tax on operators’ gross gaming revenue. House Bill 4397 focuses on online casino gaming, while House Bill 4398 addresses sports betting. Both proposals were referred to the House Government Organization Committee on Jan. 16.
If enacted, the legislation would sharply raise current rates. West Virginia now taxes online sports betting at 10% and online casino gaming at 15%. Moving both to 25% would amount to a 150% increase for sports wagering and a 66.67% increase for iGaming. Those existing rates have helped position the state as one of the more operator-friendly jurisdictions in the country.
Current Tax Structure And Market Performance
Since legal sports betting launched in late 2018, the state’s 10% tax has generated about $72.5 million in revenue. In November 2025, the most recent reporting month cited, more than $52.7 million in sports wagers produced $1.2 million in tax revenue for the West Virginia Lottery.
Online casino gaming is taxed at a rate lower than any other state with commercial iGaming. Among the seven states that allow online casinos, West Virginia’s 15% rate stands alone at the bottom. New Jersey previously shared that level until lawmakers there approved an increase to 19.75% last year. That change followed a proposal by Gov. Phil Murphy to raise the rate to 25%, which faced opposition from operators and trade groups.
Enforcement Push Against Unregulated Gaming
The proposed tax hikes arrive as state officials continue efforts to restrict unlicensed gambling activity. Attorney General JB McCuskey has pursued a campaign targeting operators that do not hold state licenses or pay taxes. Reports last summer said his office issued nearly 50 subpoenas to various gaming businesses, including sweepstakes casinos and social gaming platforms.
Following that enforcement activity, several sweepstakes operators, including McLuck, Legendz, Modo, and VGW, stopped offering dual-currency play in the state. State officials have argued that unregulated platforms undermine consumer protections and deprive public programs of tax revenue.
Funds collected by the West Virginia Lottery from legal online gambling currently support tourism promotion, education, environmental conservation, and other state services. Burkhammer’s bills do not outline specific reasons for the proposed increases or indicate whether the allocation of gambling tax revenue would change.
Broader Shifts In Gambling Taxation
The West Virginia proposals reflect a wider reassessment of gambling taxes across the United States. In 2025, several states approved higher rates, including Maryland, Louisiana, and Illinois. Illinois also adopted a per-wager tax and shifted to a progressive system that nearly tripled its maximum sportsbook tax rate.
HB 4398 would raise the sports betting tax on adjusted gross revenue rather than total wagering handle. The median tax rate among states with statewide mobile sports betting currently sits at about 15%, meaning West Virginia would move from well below average to among the highest-taxed markets.
Analysts note that higher taxes can affect how sportsbooks operate, potentially influencing odds, promotions, and long-term investment decisions.
The post West Virginia Weighs Sharp Increases to Online Gambling Taxes first appeared on RealMoneyAction.com.