Virginia lawmakers in the House and Senate have rejected changes made by opposing chambers, as legislators struggle to create a working framework for regulated online casinos.
Last week, it was announced that two iGaming bills – House Bill 161 and Senate Bill 118 – cleared the opposite chamber with modified language. However, both chambers rejected changes made by their peers.
If the chambers had accepted one another's amendments, both Bills would now be on their way to Governor Abigail Spanberger's desk for signing.
But critical disagreements between the House and Senate on financial commitments, taxes and launch timescales are presenting major hurdles for legislators seeking legal online casino gaming by 2027.
A 'conference committee' meeting to settle on a solution stands as the next step in this process but, with numerous adjacent gambling bills also under consideration, Virginia is now against the clock to enact online casino legislation before the current legislative session ends on March 14, 2026.
HB 161 vs SB 118 - What's the difference?
Virginia's iGaming bills originate from the House (HB 161) and the Senate (SB 118). These companion Bills were created to evaluate how both chambers feel about iGaming legislation and comprise a variety of identical and differing regulations.
First, both HB 161 and SB 118 demand a $2m operator annual platform fee and a $500,000 licensing charge. The Bills also require a 20% tax on adjusted gross gaming revenue.
A smaller 'hold harmless' fund designed to support financial losses incurred by retail casinos, charged at 6%, is also present in both proposals.
But neither Bill agrees on how those compensatory funds should be distributed. More pertinently, both Bills assume different launch dates.
SB 118
SB 118 is the Senate's motion to legalize online casinos in Virginia. Under its regulatory setup, the Virginia Lottery Board would oversee all iGaming activities in the state – including issuing licenses and ensuring that operators align with local laws.
The aforementioned support for land-based venues would be calculated on a case-by-case basis, where operators specifically outline how financial losses for a defined period are impacted by iGaming. Meanwhile, tax revenue would be divided as follows:
- Education funding: 95%
- Problem gambling: 2%
- iGaming regulation: 3%
Importantly, the Bill states that iGaming operators must partner with existing retail casinos in order to enter the Old Dominion.
SB 118 initially proposed an effective enactment date of July 1, 2027.
HB 161
HB 161 authorizes the Virginia Lottery Board to regulate and license operators in the state. Existing land-based operators may develop accompanying online products – allowing for up to three skins for each of the state's five retail casinos.
However, HB 161 would evenly distribute economic development fee funds to retail operators until 2032. Beyond that date, the framework would follow SB 118 in using operator losses to determine funding.
Tax revenue distribution also veers away from the Senate's Bill:
- General fund: 89%
- Problem gambling: 5%
Remaining funds may be used to support governmental and administrative duties.
HB 161 carries a 2027 reenactment clause. In effect, the Bill must pass through the General Assembly again next year before being confirmed as law. As such, a 2028 launch is most likely under these regulations.
House and Senate unhappy with one another's changes
House representatives passed SB 118 with a pivotal modification: a 2027 reenactment clause.
This saw SB 118 match the timeline put forth in HB 161 – but the maneuver was not received warmly by the Senate. The chamber rejected the House's changes.
A reenactment clause would have seen a follow-up legislative vote taken in 2027, delaying legal iGaming integration until at least 2028.
While reenactment clauses are not uncommon and allow lawmakers to refine certain framework structures, the Senate had been keen to incorporate online casino gaming within one year of passing any relevant motion.
Changes to HB 161 proposed by the Senate were also turned down by the House, such as revised rules concerning education funding, problem gambling support and regulation commitments. The Senate also moved to align retail casino funding support with SB 118.
Conference committee to determine fate of both Bills
As the House and Senate rejected changes presented by the opposing chamber, the next stage in Virginia's legislative process is to find an agreement via a conference committee hearing.
Six Virginia lawmakers, including HB 161 sponsor Del. Marcus Simon and SB 118 backer Sen. Mamie Locke, will convene to find a compromise that works for both sides.
Specifically, this committee must reconcile key differences stemming from the House and Senate concerning the rollout of iGaming in Virginia.
Timeline: The House and Senate currently disagree on a launch timeline for iGaming – this must be addressed during the meeting.
Compensation fund: Both chambers must agree on a compensatory funding system for retail casinos.
Tax revenue distribution: Officials will need to determine how tax revenue should be distributed among sectors.
A final committee report will be issued once meetings have been held. If discussions prove fruitful, House and Senate legislators will vote on whether to adopt the report's proposals in a Bill.
House and Senate officials cannot amend modifications made during conference committee meetings. Therefore, failure to pass these changes would signal the end of Virginia's latest iGaming push.
Virginia iGaming launch likely in 2028?
Although the Senate rejected the House's 2027 reenactment clause, it is reasonable to anticipate that the committee will agree to a more cautious approach over fast integration, favoring a 2028 launch.
HB 161 sponsor Del. Marcus Simon has championed an extended timeline, arguing that a delay would provide more time for legislators to review problem gambling support and other vital player safety measures.
The conference committee must not only discuss compromises by session adjournment on March 14, 2026, but also send the report for House and Senate approval. If successful in both chambers, it will be submitted to the Governor.
In addition to iGaming legislation, other gambling bills are set to be considered by Virginia conference committees, including:
- Fairfax County casino: SB 756 would require a public referendum on whether to develop a retail casino in Fairfax County – with local financial commitments at the heart of this proposal.
- Games of skill: HB 1272 and SB 661 seek to integrate skill-based gaming terminals.
- Daily Fantasy Sports (DFS): SB 129 and HB 145 could legalize DFS in Virginia this year.
Gambling regulatory: SB 609 and HB 271 propose distinct pathways toward creating a new gaming regulator in Virginia.
