Final Countdown for Virginia iGaming

The clock is ticking in Richmond, where the Senate and House are attempting to hammer out the differences in iGaming bills passed separately by each body. Monday, March 9th, was the last day for committee action on remaining bills, and Thursday, March 12, is the last day to act on any remaining bills. 

Much progress has been made since HB 161 and SB118 passed, much of it on March 4th, when procedural moves sent the two competing bills to a conference committee to be merged. However, it should be noted that both bills now feature a reenactment clause that will require another vote by both the Senate and House in the shortened 2027 legislative session. 

This was seen by many as an out for legislators who would have til at least January 13th of 2027 to gauge their voters' concerns. This matters because all 40 Virginia Senate seats and 100 House of Delegate seats will be up for election in November of 2027. 

For now, three members of the Senate and three members of the House need to come together in less than a week and work out where tax revenue will be spent, with the Senate preferring 95% of funds going to the Modern Public Education fund while the House bill prefers 95% be sent straight to the General fund. Another interesting difference is the House Bill allocates 6% of revenue for the first ten years to a Hold Harmless Fund to offset losses to the Virginia lottery. 

Perhaps the biggest point of contention, and one Governor Abigail Spanberger is no doubt watching closely, is who will oversee online gaming. The original flaw in Virginia’s otherwise successful land-based gaming launch has been that they didn’t authorize a Gaming Commission back in 2020 when they first legalized. 

By allowing the Virginia Lottery Board to have oversight, instead of creating a separate Virginia Gaming Commission, they save some money up front, but they effectively put a competitor in charge of their competition.

Even the lottery board themselves have said the extra workload of monitoring, licensing, and investigating land-based casinos have left them feeling overburdened and in charge of not just lottery and casinos, but also sports betting. But also Historical Horse racing, charitable gaming, and daily fantasy sports in Virginia, which is also home to a large grey market of unlicensed “skill” games.

The Governor has expressed her concern frequently and publicly and has stated that she is not in favor of new forms of gaming until the regulatory oversight is under a single entity.

The Senate would prefer to kick that can down the road a bit further, putting the Lottery board on the hook for also overseeing and licensing new iGaming operators, while at least some in the House, perhaps believing the Governor might veto otherwise, are pushing for the formation of a separate Virginia Gaming Commission.

It remains to be seen whether a week is enough time to bring everyone together to get these bills over the finish line in a merged form agreeable to all sides. But several larger iGaming companies have attempted to sweeten the pot in Districts with the most concern. 

Rivers Casino Portsmouth opened in 2023 in what could charitably be called a disadvantaged neighborhood along the Elizabeth River. Portsmouth was chosen for a casino license exactly because it falls under what the legislature called a distressed city. About 20% of its nearly 100,000 residents live below the poverty line. 

The introduction of 1,200 well-paying and often Union jobs has been a godsend to the local economy. One that fears what the introduction of iGaming might do. So Portsmouth Mayor Shannon Glover has been quite vocal about the bills as they wound their way through both the House and Senate on his rather popular social media feeds 

Evolution Gaming, perhaps seeing him as the key to the opposition, stepped forward and promised to provide the city with 1,200 Live Dealer studio jobs should the bill pass. But Glover has been resolute, insisting that he doesn’t want to trade the bird in his hand for two in the bush. The bird in reference here is about $20 million in direct local gaming tax paid to the city as well as all the other ancillary revenue boosts from sales tax and wages. 

A principled position amongst politicians is always welcome, but the issue here is lurking just three miles downriver, where Boyd is building a new $750 million land-based casino. Some analysts believe that it may draw 30% to 50% of Portsmouth’s casino revenue once the permanent facility opens in the fall of 2027.

That means Mayor Glover is also facing down a ticking clock. While his desire to save land-based dealing jobs is admirable, 1,200 live dealing jobs long term seems more than a fair trade considering the Portsmouth casino will face a huge reduction in force within 18 months from land-based competition in any case. 

This standoff is a microcosm of the statewide debate, a struggle to balance current interests against inevitable market shifts. Regardless of Mayor Glover’s stand on iGaming, Portsmouth will soon face a new market reality; it cannot afford to live in the past anymore now than it can attempt to live in the present. 

The future is coming; Pennsylvania, New Jersey, and West Virginia already have online casinos, and Maryland discusses it every year. The folks in Richmond can legislate based on today’s optics, or they can decide that the commonwealth’s long-term economic survival is on the line.