Virginia Bill to Legalize Internet Gaming Falls Short in 2026 Session

07 November 2026

Virginia's 2026 effort to legalize internet gaming fell short, as HB161 and its Senate counterpart SB118 failed to advance in the regular legislative session. Introduced to authorize online casino gaming under the oversight of the Virginia Lottery Board, the bills represented a significant shift in the Commonwealth's gambling landscape. But a stalemate in conference committee meant Virginia would remain the only state in the Mid-Atlantic without some form of online gaming legalized.

HB161, titled "Virginia Lottery; internet gaming authorized; definitions, penalties, effective clause," laid out a comprehensive regulatory framework for online gaming. The 2026 measure proposed that each casino gaming operator would need to submit a separate notice of intent for each internet gaming platform, paying a sizable $2 million platform fee to the state. In exchange, the Virginia Lottery Board would issue an internet gaming operator license to each qualifying operator, requiring an initial $500,000 licensing fee.

The tax burden under HB161 was set at 20% of adjusted gross internet gaming revenue, with strategic distributions of those funds. 5% would have funded problem gambling treatment, with an additional 6% allocated to the Internet Lottery Hold Harmless Fund until 2037 to offset losses to the traditional lottery. The lion's share, 89% before 2037 and 95% afterwards, would have flowed into the commonwealth's general fund.

A companion Senate bill, SB118, mirrored HB161's key provisions, including the license fee and tax rate. However, the bills took different routes through the legislature and contained minor differences in revenue distribution. While both bills initially progressed, they ultimately failed to reconcile and advance. According to industry coverage, the breakdown in conference means online casinos would not launch in Virginia before 2028 at the earliest.

Supporters of the legislation argued that expanding into regulated internet gaming would help move activity off unregulated offshore sites, providing a safer environment for players. Industry proponents also cited the ability of online gaming to generate millions in new tax revenues for the state. But fair share was behind her push to win over Virginia legislators. Brick-and-mortar casino operators raised concerns, saying that online gambling would divide players and revenue, hurting Virginia's existing land-based gaming hybrids.

The legislative path for the bills included passage in the General Laws Gaming Subcommittee and full General Laws Committee, a critical breakthrough. But as the session closed, industry reports described the broad debate encompassing both online casino regulations and integrated sweepstakes casino provisions. Those watching Virginia's evolving gaming laws will be keeping close tabs on whether similar bills are introduced in 2027, to see if Virginia can advance online gaming laws in the next legislative cycle.

If HB161 had passed, Virginia would have become the 9th state to authorize online casino gaming, after New Jersey, Pennsylvania, Delaware, Nevada, Michigan, New Hampshire, West Virginia, and Connecticut. While some in Virginia saw a path forward on the internet gaming bills, the failed 2026 campaign to legalize online casinos shows how complex the road ahead continues to be, before playing cards and other iGaming hopefuls see a payday in "Old Dominion."