Virginia iGaming Bill Advances From Subcommittee After Heated Debate Over Lottery Funding, Jobs, and Gambling Risks

House Bill 161, a proposal to legalize regulated online casino gaming (iGaming) in Virginia, advanced out of a General Laws gaming subcommittee of the Virginia House of Delegates on Feb. 3. Supporters said it would regulate illegal gambling. Meanwhile, opponents warned it could undermine lottery funding and brick-and-mortar investment.

After nearly two hours of testimony from casino operators, lottery officials, racing interests, and problem-gambling advocates, House Bill 161 cleared the panel 5–4, sending it to Appropriations.

HB161 Moves Forward After a 5–4 Vote

Bill sponsor Del. Marcus Simon told lawmakers the measure is designed to regulate an already active illegal market.

“Casino-style gaming is happening on people’s phones in the Commonwealth of Virginia already. It’s estimated that iGaming has a $12 billion business in Virginia, and it’s completely unregulated and untaxed.”

“What this bill is really meant to do is to bring the gaming on your phone within a legal framework that’s going to be highly regulated and include consumer protections.”

Simon outlined provisions, including $2 million licensing fees, a 15% tax rate, funding for problem-gaming programs, restrictions on prepaid and credit cards, and requirements for Virginia-based live-dealer studios.

“Virginia would be the first state in the nation to implement such a requirement for iGaming.”

Several industry representatives spoke in favor.

Ken Hutcherson, representing Caesars Entertainment and Caesars Virginia, said simply: “We support this legislation.”

B. Gonzalez of the Sports Betting Alliance argued that iGaming could complement lottery performance: “In Michigan and Pennsylvania, two very strong examples, the lottery’s revenue increased by 62.9% in the four years since launching iGaming.”

Henry Watkins, speaking for Evolution Gaming, pointed to job creation:

“That amendment makes sure that there are jobs and major investment in the Commonwealth between 1500 and 2,000 good-paying jobs.”

Lottery, Casinos Raise Fiscal Concerns

Opponents focused heavily on education funding and potential cannibalization.

Khalid Jones, executive director of the Virginia Lottery, told lawmakers that lottery proceeds are fully dedicated to schools and warned of revenue declines:

“We estimate up to $616 million over the first full five years of the program as currently constructed.”

Mark Stewart, representing Live Casino Virginia, argued the bill would hurt existing gaming:

“Igaming is a loser for the Virginia Lottery, with nearly $220 million lost annually for public education. For Virginia workers, up to 2,000 jobs lost.”

Horse racing and agribusiness groups also opposed the measure, including Aaron Palmer of Churchill Downs and Trey Davis of the Virginia Agribusiness Council, who warned of impacts to planned investments and industry growth.

National advocacy groups echoed those concerns. Oliver Barry of the National Association Against iGaming said online products would “cannibalize existing gaming and lottery revenue,” while citing projected job losses and social harms.

Public Testimony Highlights Addiction Risks

Several speakers shared personal stories of gambling harm.

Stacey Rendon, a Michigan resident, told the panel:

“I lost over $2 million to two casinos in six months.”

David Nangle, a former Massachusetts legislator and national advocate, warned:

“Online gaming is engineered to be addictive.”

He added: “Do you really need to put a casino in everybody’s pocket 24/7?”

Senate iGaming Bill Also Advanced

The House vote comes less than a week after a Senate committee advanced a separate iGaming proposal, meaning both chambers now have competing frameworks moving simultaneously.

On Jan. 28, the Senate General Laws and Technology Committee advanced Sen. Mamie Locke’s SB 118 with a split vote.

Previously, a gaming subcommittee rejected the proposal. However, after significant additions of responsible gaming provisions, the full committee voted to advance SB 118.

What’s next

HB161 now heads to Appropriations, where fiscal modeling — particularly lottery transfers tied to K-12 education — is expected to drive negotiations.

With the measure advancing by just one vote, further amendments to tax structure, consumer safeguards, or revenue allocations remain likely before any floor action.