Virginia’s Joint Subcommittee on Gaming heard testimony from a series of consulting and industry experts on Monday to help the Commonwealth remake its gambling oversight system.
Virginia currently allows online sports betting, bingo, charity gaming, horse racing, lottery, land-based casinos, and Historical Horse Racing. Oversight of these activities is spread among three separate state agencies. The Senate subcommittee is looking at the feasibility of establishing a Virginia Gaming Commission (VGC) so all activities will be under one roof or consider consolidation options.
Virginia Online Gambling
In a study released in October 2022, Virginia’s Joint Legislative Audit and Review Commission (JLARC) provided recommendations that would change the Old Dominion’s gambling environment. A new VGC in place could help support future gaming expansion, like online casinos in Virginia, also known as iGaming.
Neighboring state West Virginia has had both land-based and WV online casinos for some time now. Virginia currently has one permanent casino open, Rivers Casino Portsmouth, and two temporary locations, Hard Rock Bristol Casino and Caesars Virginia Danville Casino. Two additional casinos are planned in Norfolk and Petersburg.
Senator Bryce Reeves (R-Orange County), Chairman of the Joint Subcommittee for Gaming, said the new VGC is needed to get a handle on gaming in Virginia.
“I’m very encouraged,” Reeves said opening the meeting on Monday. “I had a meeting with the governor today and his staff is here as well, to really talk about getting a good handle on gaming in the Commonwealth and setting potentially the VGC up.”
Part of the meeting focused on new forms of gaming for Virginia like Internet gaming (iGaming) and cruise ship casinos operating while passing through Virginia waters.
“I think the theme that you’re going to see emerge is that our regulatory framework needs to be streamlined to prepare for these future possibilities,” said subcommittee Vice Chair Delegate Paul Krizek (D – Fairfax County).
According to a recent American Gaming Association study, Americans have spent nearly $338 billion with “illegal” iGaming operators in foreign countries. The illegal services provide U.S. gamblers access to table games like roulette, poker, blackjack, and online slots, to name a few. However, these Internet sites lack consumer protections demanding this type of entertainment.
Michelle MacGregor, a Senior Policy Advisor for the Sports Betting Alliance, provided an overview of iGaming and how it’s slowly being introduced in U.S. states with heavy regulations not found with illegal Internet sites.
“I can’t stress enough that legalized iGaming is among the highest-regulated industries in America,” MacGregor told the subcommittee. “Any licensee is required to be compliant with anti-money laundering regulations and financial solvency requirements. And of course, they incorporate top-of-the-line geolocation technology, consumer age and verification measures, and safeguards for responsible gaming.
I’m not necessarily saying that because there’s an illegal market, the Commonwealth should legalize it. It’s worthwhile looking at it from a public policy perspective and say hey, maybe consumers want this in a legalized channel.”
Eight jurisdictions in the U.S. have legalized iGaming: Connecticut, New Jersey, Pennsylvania, West Virginia, Michigan, Rhode Island, Delaware, and Nevada (online Poker only). New York, Maine, and Maryland introduced iGaming bills in the past couple of legislative sessions that failed to pass.
To highlight future opportunities for Virginia, MacGregor said Michigan, Pennsylvania, and New Jersey, each generated over $1.7 billion in gross gaming revenue in 2023 which comes out to just over a billion dollars in tax dollars across those three states.
Virginia online sports betting market has handled over $15 billion from bettors in the state since launching the service in January 2021. In that time, the Commonwealth has received over $170 million in tax payments from operators like FanDuel, DraftKings, and BetMGM, just to name a few.
A study funded by the Sports Betting Alliance and released in April looked at the potential economic impact of legalizing iGaming in five states, Virginia being one of them.
The Analysis Group, author of the report, said legalized iGaming in New York, Illinois, Louisiana, Maryland and Virginia could provide a combined total of over $42 billion between 2025 and 2029. Focusing on the Commonwealth, the study states iGaming has the potential to generate revenues of $5.4 billion for Virginia over the same period.
